A local mayor says he has lost confidence in Essex County's reserve system.
Leamington Mayor John Paterson raised an objection to the system after a report on the county's corporate reserve strategy was presented to Essex County Council, during a meeting Wednesday night.
Paterson told council that the system is outdated and the county should look at another method of tracking reserves so that it's fair to all municipalities.
"Times have really changed, not just at the county level, but at the municipal level as well," said Paterson. "I think it's time we take a good look at this strategy of looking at our corporate reserves here."
To back up his point, Paterson handed out a table chart to council members outlining the total long-term debt each Essex County municipality has, versus the county itself, followed by actual reserve balances. The report shows that the county has over $143-million in reserve balances, while the other communities' balances range from $1-million to $45-million.
The table also shows that when reserves are compared to each municipality's tangible capital assets, the county has the highest ratio at 47%. In comparison, ratios range from 4% to 17%. The figures are based on the 2016 Financial Information Return (FIR) reports that are required to be filed at year's end by each municipality.
Paterson said he thought something was amiss a couple of weeks ago when he e-mailed his council colleagues, suggesting that the county administration pull money from each municipality's reserves to fund CWATS projects for 2018.
"Why are we pitting our towns against each other for the funding that we want, for the items that we want, when the funding is all of our money in the first place?" asked Paterson.
He also believes the reserve system is creating first-class and second-class communities. He added that it would be hard for him to explain to Leamington residents why the county is having financial success, while the municipality is struggling to balance the books.
"On one hand you have the county, which as I see, it is a 'have' municipality with no debt and copious amounts of cash in reserves," said Paterson. "Then we have the rest... 'have not' municipalities, carrying debt and adding new debt."
Paterson introduced a motion to defer the acceptance of the county corporate reserve strategy report to the upcoming budget deliberations, so that council members can take a look and see how the reserves can be better used. The motion carried with just one "no" vote from county Warden Tom Bain.
This table chart, presented to Essex County Council on September 6, 2017, shows the amounts of debt, reserve balances and reserve-to-asset ratio for each Essex County community. Photo by Mark Brown/Blackburn News.
