West Island cities land improved quota deal
Hawa says she’s proud of town’s role as adjustment means millions in savings
It all began with Ste-Anne-de-Bellevue administration realizing, to its horror, that the transfer of the St-Anne Hospital from federal to provincial jurisdiction would land the small town with a whopping Montreal Agglomeration bill it wouldn’t be able to pay.
The town was already aware that it would experience a dip in revenues as a result of the transfer last year because the province calculates its “in lieu of tax” provision at a lower rate than the federal government. That was troubling enough. But when the town used the government-approved formula in place since 2008 to calculate what it owed the agglo as a result of the property transfer, it showed an increase in payment of $716,000.
“We couldn’t pay that,” Ste-Anne Mayor Paola Hawa said. “There was clearly something wrong with the formula.”
All municipalities submit a percentage of their budgets to the agglomeration to pay for services, including law enforcement, fire departments, water management and transportation.
The formula used to decide the percentage is based on theoretical monies to be made from taxable properties.
The formula also employs a series of complex “corrective coefficients” for estimated tax revenues from residential and non-residential properties.
The heft of the agglo payments has long been a thorn in the side of de-merged West Island municipalities. Certain municipalities, including Ste-Anne and Baie-d’Urfé, hand over as much as 60 per cent of their budgets to the agglo.
This latest spike in agglo payments was untenable for Ste-Anne — a small town with a population of around 5,000. So Hawa, general manager Martin Bonhomme and Jacques-Cartier MNA Geoffrey Kelley met with Pierre Moreau, the provincial municipal affairs minister at the time.
Moreau agreed there was a problem. He went on sick leave soon after the meeting and was replaced by the current municipal affairs minister, Martin Coiteux, the Nelligan MNA, who was briefed on the file and agreed that some tweaking was necessary.
Senior managers from six suburban municipalities, including Bonhomme, brought in an outside auditor and began working with Montreal’s Service des finances to analyze the formula. It became clear that adjustments were needed to better reflect the realities of each town and city.
“Ste-Anne-de-Bellevue’s situation triggered an analysis of the formula,” Association of Suburban Municipalities (ASM) chair and Baie-d’Urfé Mayor Maria Tutino said.
“And that analysis did identify a problem.”
A bit of background: As part of the hospital-transfer deal, Ste-Anne asked the Quebec government to include a piece of hospital-adjacent land, which could become a residential development down the road and generate tax revenue.
The town is in the final stages of negotiations with the Quebec regional health authority for the transfer of that land.
It was the way the old formula calculated the theoretical commercial land wealth of a municipality, which was deemed distortional by the managers and auditor.
“The new formula is not the endall of formulas, but now it is more equitable,” Tutino said.
The new formula will be rolled out over three years. In the case of Ste-Anne, the town will save $1.148 million in 2017, $2.296 million in 2018 and $3.44 million in 2019.
Hawa said she was proud of the role the town played in bringing the formula’s flaws to the attention of the Quebec government, Montreal and the ASM.
“This (new formula) shows that just because you’re small doesn’t mean you can’t bring about change,” Hawa said.
Tutino said not every municipality is benefiting from the new formula, but that the new formula is a temporary measure and will be re-evaluated in 2020.
Beaconsfield general manager Patrice Boileau said the percentage-share formula began to distort as early as 2009. He said the new formula is helping put things back on track.
The new formula will see Beaconsfield save $263,000 is 2017, $527,000 in 2018 and $790,000 in 2019.
The Quebec government’s ruling on the formula adjustment, called the Projet d’arrêté ministériel Loi sur l’exercice de certaines compétences municipales dans certaines agglomérations (chapitre E-20.001), will come into force mid-July.
This (new formula) shows that just because you’re small doesn’t mean you can’t bring about change.