Council Continues Compliance with Supervisor’s Report

by Dan Davidson

It might have been called Bylaw Night or Carrel Compliance Night at Dawson City council on February 3, as first and second reading was given to ten items needed to begin complying with the recommendations in the Carrel Report.

Even thought these items were required by the YTG supervisor's report, they did not make it past the council table without some degree of discussion.

The changes to the Proceedings Bylaw (#04-01) had the council tabling all of the accounts payable at each public meeting, and posting the results publicly.

André Carrel at a public meeting in Dawson. Carrel was once the town manager in Dawson, during which one of his duties as animal control. At one point he quipped, “Why get the dog killer to come back and do his thing?”

The amendments to the Indemnity Bylaw (#04-02) cut the mayor's salary in half to $24,500, and his travel benefit from $4,000 to $2,000.

The Public Service Amendment No. 4 bylaw and the Management Employment Amendment No. 3 bylaw also cut employees' travel benefits by half to $2,000.

Changes to the Water and Sewer Amendment #4 bylaw eliminated the raise in rates that council had passed in its provisional budget last December as well as the 35% increase in subsidy to residents which would have offset. The main beneficiary of this cancellation will be the territorial government, whose properties did not receive the subsidy.

In an effort to come closer to recovering costs for Waste Management expenses in the town, rates were raised in a variety of areas annually, with the basic residential rate rising from $75 to $100.

Costs also increased in the operation of the cable television / internet system, as reported in December. The rate goes up $3 a month in order to finance fine tuning and additions to the television system.

More complex were changes to the Grant Bylaw governing the town's home owners' grants to residents, which will be reduced from $250 to $100 this year. This got first reading only, pending the tabling of a detailed spreadsheet showing the impacts.

A Real Estate Disposal bylaw takes a first step towards selling two items of city property, the building known as the Youth Centre and the city maintained doctor's residence. Carrel recommended disposing of surplus city property. Other venues will be found for the programs currently operated out of the Youth Centre.

One other building that the city is selling is the former Klondike Centennial Building, now known as the Legion Hall. The transfer has not yet been made final but will probably be for a nominal fee.

In addition, resolutions were passed requesting the town's accountants to move the town's financial reporting to Public Service Accounting Standards. Mayor Everitt indicated that the firm of BDO Dunwoody had told him the town was already very close to these standards, though not under that name, closer than any other municipality in the Yukon or YTG itself.

A side issue to this was a request by the town to have the accounting firm develop a system for True Cost Accounting as instructed by Carrel.

The meeting, which ran out the clock until 10:59 p.m, ending just under the wire for maximum time, clearly went on too long, with councillors expressing the frustration over the situation in which they find themselves by nitpicking at each other’s presentations. Tempers flared, but did settle before the end of the evening.

Supervisor Recommends Public Inquiry

by Dan Davidson

"I’m André Carrel. I’ll be your waiter tonight."

With those words the territorial government’s appointed supervisor of Dawson’s finances opened the public meeting he had decided to call and presented his menu - the almost final version (draft 3) of his report on what the government has termed Dawson’s “financial crisis”. An earlier draft presented to the local chamber of commerce should now be considered obsolete.

He explained to the audience in the YOOP Hall, which grew to over 70 people at one point in the 2 hour presentation, that he had been appointed by the YTG to “help the City of Dawson develop a financial plan.”

He indicated that this third draft of the plan had been arrived at after much discussion and consultation with the council and that most of the detailed decisions on how to reach his stated objective had been theirs, not his.

In brief, he summarized the situation in which he felt the town found itself at the present time. As his outline, he used the 20 recommendations which he is making, ten to the town and ten to the territorial government, as a result of his studies since the beginning of October.

He said several times, particularly when it looked like questions were edging that way during the Q&A session after his main presentation, that there was no point in trying to assign blame for the situation as it is now. Decisions were made by a series of councils, and the actions they took were not checked by a series of governments. In his view, although the YTG does not have a contractual obligation to assist the town out of the mess, it probably could be argued that it has a moral one.

The supervisor said he wasn’t particularly interested in the history of how this mess came to be, and hadn’t seen any need to acquaint himself with it. For this reason he had not consulted with his predecessor in the position.

The town, he said, had simply gotten into a state where it had more money going out than it had coming in.

“Wishing it were otherwise ain’t gonna work. Blaming won’t work either.”

Carrel said his main objective as a supervisor was to set aside a $1.2 million contingency fund to safeguard against a negative finding in the TSL/City of Dawson arbitration case (concerning the recreation centre) currently being studied by the arbitrator, whose report can be expected by March. He said it was quite possible for the town to find an additional $150,000 to cover a damaging award, so he would not recommend that the council be replaced unless the damages exceeded $1.35 million.

At that point he said that the YTG should appoint a trustee and dissolve the council, or the council should move to dissolve itself. He also indicated that this might not happen, and the YTG could decide to keep the council in place and help the town.

Additionally, the town might actually win the arbitration, in which case, “you won’t need a supervisor to tell you how to spend the money.”

In his view, any award would go to servicing the debt on what has grown to a $4.2 million level by the end of 2003, resulting in debt payments of $466,000 being budgeted for the 2004 fiscal year.

There were, he said, two ways to change the fiscal picture. One was to increase revenues, by raising taxes and utility fees. Some of this, as previously reported, has already been announced for this year. The other, and the primary method, said, Carrel, was to reduce expenses.

Here, he made a clear distinction between what he called “hard” and “soft” services. Hard services are the responsibilities generally outlined the municipal act, those having to do with provision of sewer and water, street maintenance, and protective services.

Soft services include “recreation, community development and grants to organizations.”

“It is in this area,” Carrel said several times, “ that council has the greatest flexibility to reduce expenditures.”

In all, just under a quarter of a million dollars came out of this area of the budget, community development taking a major hit and dropping from “$219,000 in 2003 to $100,400.”

One of the other major reductions occurred in the area of government services (council and administration), with $87,000 in savings taken from cutting the mayor’s salaried time in half, and “the virtual elimination of travel, hosting, meeting and similar expenditures from all members of council and management staff, and from a reduction in employee benefits.”

With January gone already, Carrel said, this means that a 7% reduction in the 2003 expenses of the city in all these areas will come out of the period from March to December.

Carrel acknowledged the existence of a prior financial plan, but characterized it as too “fluid” a document in his report. It was too imprecise and too subject to alteration when circumstances changed.

“In consideration of the weaknesses in the Financial Plan in effect at the time of my appointment, I concluded,” he wrote, “ that the interests of the municipality would best be served by developing a new Financial Plan.”

Many of his criticisms dealt with the handling of the Capital Funding Agreement. He said he did not know why such an agreement was arrived at by either side when it appeared to have been obvious at an early date that the sums involved would be insufficient for either the recreation or the sewer & water project. The CFA should, he said, have been renegotiated and rewritten to reflect reality.

While he criticized the City for what he felt was lax accounting of its expenditures related to the CFA, he was equally critical of the YTG for apparently not objecting to this or requiring a higher standard.

Here, his recommendations go beyond the present situation to apply to the entire territory.

• Public Sector Accounting Standards should be adopted for use by YTG and all municipalities, since the Yukon currently has no standard at all.

• Multiple capital construction projects should not be bundled into single CFAs as was done in Dawson.

• A new format for CFAs should be developed which would set improved standards for “performance and accountability”

Tied in with all of this was a recommendation for a full public inquiry to determine what happened to the three projects (under CFA #99-0727) in Dawson and how the money was spent.

There were a number of questions from the audience, but many of them dealt with amplification of things Carrel had already said. Those in the audience who were sympathetic to the council, or defending certain types of expenses made their points, while those who wanted to see “a hanging” (as one comment was made before the meeting began) were probably disappointed that there was not more blood on the floor.

Carrel repeated over and over that he wasn’t here for that. He was here to fix a specific problem.

“The chickens have come home to roost,” he said at one point, but added that the electorate itself had to bear some of the responsibility.

“Once every three years ‘Me make X’ - it’s not enough,” he said. Citizens need to ask the tough questions earlier, attend meetings, find out information and persuade their elected officials to act responsibly.