Pelham cleared: Augustyn
Opponents of the town’s mayor say no way
With an audit of the town’s finances in his rearview mirror, Pelham Mayor Dave Augustyn is driving forward into the new year with a full agenda.
And that agenda doesn’t include rehashing questions about Pelham’s finances and the east Fonthill project, a 180- hectare ( 450- acre) parcel of land that extends from Highway 20 along Rice Road to the area south of Merritt Road.
The ambitious mixed- use development has the potential to bring 5,000 new residents to the town and includes a $ 36- million community centre with twin- pad arena and Wellspring Niagara’s regional cancer support centre.
“At the end of the day, council has said we have answered all these questions, and it is over and done with,” Augustyn said. “We have been addressing concerns and allegations since the end of March. It’s been nearly 10 months. They wanted more detail. We answered the questions in greater detail. The staff has answered them. Our lawyer has answered them. Now our auditor has answered them.
“It’s time to move on. We have a lot to do in 2018 to make sure we keep moving the community forward. We are going to concentrate on those type of things.”
The accounting firm the town used for the third- party audit, KPMG, presented its findings in two separate public meetings before Christmas. The first meeting featured the presentation of KPMG’s audit of the town’s finances. The second dealt with questions submitted by residents.
Augustyn acknowledged the anxiety in the community about the town’s finances but said the town’s financials will improve as the development unfolds.
Infrastructure already in the ground includes improvements to the road network as well as water, sewers and storm sewers.
“One of the things we have done is activate the money in the reserves, and use them for projects that will be paid back by the development community,” Augustyn said. “There is $ 7.8 million owing from development as we move forward.
“The reserves have been capitalized and are being used in the community for infrastructure. As the development occurs, whether it’s parkland dedication, whether it’s development charges, the cash will be used to replenish those reserves.”
If you go by statistics given out early this year by Rino Mostacci, Niagara Region’s planning commissioner, a bet on development in Niagara is a good one. Mostacci said a population boom that started in Toronto and spread around the lake to Burlington and Hamilton is arriving in Niagara.
Mostacci’s figures from the most recent census show that after years of growth in tiny increments, Niagara’s rate has soared by more than 300 per cent since 2011.
That’s put pressure on housing stocks. The average price of a Niagara home jumped 29 per cent in the first half of 2017 compared to the first six months of 2016. Also, housing starts were up six per cent in the first half of this year compared to 2016.
However, Augustyn’s optimism isn’t shared by everyone in Pelham. In some quarters, the town’s financial health and the land purchases that have been part of the development have been met with alarm.
The concern coalesced in the formation of a grass- roots group, Pelham DEBT, that has doggedly delved more deeply into the town’s finances and demanded answers. It also took its concerns to regional council and found a receptive ear, as did Niagara- on- the- Lake developer Rainer Hummel, who owns land in east Fonthill and has voiced concerns over the same issues.
Pelham DEBT, which stands for stands for Dave’ s Excessive Borrowing and Taxation, has also struck a nerve in the community. Residents packed the public meeting sat E. L. Crossley Secondary School.
Bernie Law is among those worried about the town’s financial health. He has decades of accounting experience, from having worked as secretarytreasurer for a Welland car dealership, and said the KMPG audit didn’t alleviate any of his concerns.
“Look, I am friends with the mayor and the town councillors,” he said. “I have known many of them for years, but my concern for the taxpayers of Pelham comes first. It’s sad to see the way it has worked out.
“I’m not involved in the politics of this. I only worry about the dollars and cents. Fourteen years ago, when Ralph Beamer was the mayor, there was not one penny in debt in Pelham. Not a dime.
“Here we are 14 years later, and we have all this debt. And what do we have to show for it — a partially built twin- pad? I feel like the residents are being kept in the dark, and the town administration is not being completely honest with the taxpayers. The audit didn’t change that.”
Law starts with the community centre when asked about his concerns.
“As taxpayers, we aren’t against a twin- pad arena,” he said. “What we are against is the method they have used to get it built. There is no provincial or federal funding. We didn’t get a dime from either level of government. We should have put it on hold until the other level of government opened up their purses. We already own the land. We could have waited. Other communities received millions. We didn’t get five cents. So why do it?
“Millions of dollars of changed hands in the past few years, but we don’t have anything to show for it.
“The people of Pelham will have to pay back this huge debt. I am afraid these developers have taken to them to the cleaners, and I think Pelham’s taxes are going to skyrocket. The interest on the debt alone is going to be problem.”
Augustyn acknowledged the concern but said it was vital the development link directly with downtown Fonthill.
“The last scenario we wanted to see was this develop piecemeal and end up as a thumb sticking out of the town — more connected to Welland or Thorold than Pelham.
“We already see some of the benefits. You see a resurgence in downtown Fonthill because of the linkages. We have put the community centre right in the middle of it. This mixeduse development with higher density housing will help stimulate the right type of growth in Pelham. It will generate jobs. It will move the community forward.”
Augustyn said the town is in the process of increasing development charges based on a formulation provided by provincial experts.
“For those that are concerned with property taxes, we have matched inflation over the past five years,” Augustyn said. “We’ve done very well in comparison to other communities. At the same time, we have increased the dollars that have been set aside for capital works.
“Aside from some rural areas, our infrastructure is very, very good. We think the plan is resilient enough that it is achievable. We have to focus on the sale of lands. The fundraising is going exceptionally well. All the pieces are falling into place.”
The KMPG audit noted that three Niagara municipalities — St. Catharines, Port Colborne and Pelham — are in a net- debt situation. Net debt is total financial assets minus total liabilities. The latest numbers available for all communities have St. Catharines in the red at $ 11.7 million, Pelham at $ 9.26 million and Port Colborne in the red at $ 6.4 million.
Augustyn pointed out that Pelham is the only municipality among the three that is growing.
Therefore, he said, it is able to collect significant amounts in development charges.
St. Catharines — tightly bound by the lake, the escarpment, the canal and the greenbelt — is out of tracts of developable land. Port Colborne is the only municipality in Niagara that saw its population decline in the most recent census.
Niagara Falls is in a league of its own when it comes to net debt. It is in the black at $ 103.1 million, more than three times better than the next best municipality, Grimsby. Grimsby’s net debt account is $ 34,606,28 in the black.
Augustyn believes time will prove him right. He also believes he has the support of the silent majority.
“When I see people in the community, when I see business owners, when I see donors to the community centre — they are all saying ‘ Good for you,’” Augustyn said. “It’s all been verified by KPMG.
“It is time to move on. That’s what the community wants. That’s what the community needs.”