LETTERS TO COUNCIL BUT NOT READ #1 and #2
At the LSAC Public Hearings of May 1, 2019 letters sent to Council were received as information only and when asked if these letters would be read aloud, the Reeve indicated that they would not. We will publish the letters over the next few days each addressing the concerns of LSAC Legacy Municipal Land Corporation Municipally Controlled Corporation and the ORMC Municipally Controlled Corporation.
Letter #1
No reply from LSAC to this letter was provided to the author.
29 April 2019
County of Lac Ste Anne
Box 219
Sangudo AB T0E 2A0
RE:
SUBMISSION TO PUBLIC HEARING MUNICIPALITY CONTROLLED CORPORATION LEGACY
MLC
The Notice of Public Hearings in the Lac Ste Anne
Bulletin dated 8 April, 2019 noted that written comments may be provided prior
to 4:30 pm on 30 April, 2019. This
letter is in response to that Notice.
Since I am unable to personally attend the hearing to present these
comments, will these comments be read into the public record or the
hearing? I anticipate that will be the
case.
A review of the business plan for the Legacy MLC, and
review of the borrowing bylaws in this regard, raises many questions and concerns
regarding the actual viability of projects, forecasted timelines and
contradictions in the document itself.
·
The business plan states that the
MLC will be involved in commercial and residential real estate development,
industrial land development, internet, and telecommunication projects. All of those noted projects are potentially
high risk and in a number of cases are projects that private enterprise is
immersed in currently. How does it make
sense for we the rate payers in the county to risk the financial viability of
the county, which is already at risk, on these types of projects in which
private enterprise is involved. If the
county is trying to enhance economic development in the county, then perhaps a
far better way would be to provide some tax incentives to private enterprise
for such development. At least in that
scenario the cost of tax incentives would be known over a period of time,
versus, an unknown liability being assumed by the county. The document further states that controlling
the Legacy MLC is not expected to impact LSAC financial viability, but in fact
it certainly will!
·
In the executive summary a
statement is made that the medical clinic in Onoway has been operating
successfully without subsidy. That
statement is not accurate because the initial investment of county dollars, tax
payer dollars, is ignored. In 2017 the
clinic had a loss of $64,200! Further in
the revenue risk section on page 8, it states that the six municipalities that
operate the ORMC have made a financial commitment to the continued operation of
a medical facility in Onoway.
Interesting what is that financial commitment amount? Isn’t that a potential liability to the
county and others? There is no
indication of the financial commitment elsewhere in either business plan for
the MLC or the ORMC.
·
The Board Structure notes that
the elected member of LSAC Council will be the Directors of the Legacy
MLC. That fact seems to indicate that
the county will be directly responsible for the activities of the MLC and
therefore, totally liable for those activates as well. There is no indication in the budget that the
board members or administration will be paid any fee for the services to the
MLC. It is wonderful that the council
members will be performing this function without fee. Perhaps a better solution to this direct
control of the MLC by council is appointment of community members to the
board. There are many community members
who have business experience who could bring that expertise to these proposed
enterprises. As well it is noted that
the CAO of the county or designate will fill the role of Executive
Director. With the anticipated workload
of this MLC, how can either of those current positions assume this role without
added hours and or compensation? A cost
to the county!
·
The 5 year budget for the MLC
has no increases noted over that time period for any cost center. That is not a realistic projection, putting
into question the entire strategy and bottom line.
·
The borrowing bylaw note that
the County will borrow the $1M at an interest rate not to exceed 4.5%. The loan to the MLC bylaw notes that the rate
will not exceed 4% interest. Does that
mean that the county may be liable for up to 0.5% cost? It would seem like that may be the case, but
the business case states that there will be no added cost to the county.
·
The forecasted timelines in the
business case relate in large part to the ORMC building. It notes that an architect will be selected
by between 11 and 18 March, 2019. Has an
architect been engaged? It further notes
building design completed by between 10 May and 17 June. For the building design to be completed, a
service delivery plan must have been completed already for the architect to use
in design. What consultation has
occurred with Alberta Health Services and the physicians and potentially other
interested parties in this regard?
This must mean as well that a site has been selected for the location of
the building. Site location will
determine design requirements as well.
Building design dictates building construction cost. What process was followed to determine the
building budgeted cost of $1M?
·
The proposed construction
period ranges from 6 months to 1 year.
If it is longer than 6 months then the budget for the ORMC is at
risk.
As a rate payer in the LSAC for 19 years, I would hope
and trust that the county council will take a serious second look at this
proposal and not rush into action that will ultimately, in my opinion and many
others, result in an increased tax load to each and every one of us.
Council, please reconsider this proposal and the
borrowing bylaw!
Clifford B Cottingham
Letter #2
No reply from LSAC to this letter was provided to the author.
29 April 2019
County
of Lac Ste Anne
Box
219
Sangudo
AB T0E 2A0
RE: SUBMISSION TO PUBLIC HEARING MCC ONOWAY
REGIONAL MEDICAL CLINIC
The
Notice of Public Hearings in the Lac Ste Anne Bulletin dated 8 April, 2019
noted that written comments may be provided prior to 4:30 pm on 30 April,
2019. This letter is in response to that
Notice. Since I am unable to personally
attend the hearing to present these comments, will these comments be read into
the public record at the hearing? I
anticipate that will be the case.
A
review of the business plan for the ORMC, and review of the borrowing bylaws in
this regard, raises many questions and concerns regarding the assumptions made
in the business plan and its projected success.
The plan, although proposing no cost to the taxpayers of the county, is
upon critical review certain to do just that, ultimately costing the taxpayers
of the county.
·
The
business plan states that in the past a cash subsidy of $76,000 was provided to
the clinic operators. In the 2017 actual
financial statement, it notes an opening reserve balance of $135,000. It is presumed that this balance comes from
previous subsidies that were paid by the taxpayers of the county and other
communities. There is a statement that
the results of the trial 2 year period was nothing short of remarkable, but in
fact the first year showed a deficit of $64,200 and a small profit of $8,400 in
2018, that doesn’t seem remarkable to me!
The closing reserve balance shows a positive figure, but not when
including the opening reserve balance of $135,000 that came from
taxpayers. This positive reserve balance
flows through to the 2019-2023 budgets with a positive balance, but if one
takes out the initial reserve balance there is a net negative closing reserve
balance of -$42,100.
·
In
the Business Case document, it states that there will be a growing variety of
medical services available, at least seven times throughout, but nowhere does
it state what those growing variety of services might be. Health services in the province are governed
by Alberta Health Services and funded by the Provincial Government. In discussion that I had with AHS, no one
from the county council or administration, as of 1 week ago, had talked to AHS
about these growth of services or funding of same. This brings into question the viability of
the business case.
·
The
ORMC budget revenue stream is based solely upon physician overhead. Although it isn’t stated, it is presumed that
this is either a percentage of physician fee for service income, or a fixed fee
amount per physician. The 2020 budget shows this number increasing by 61% over
2019 budget. That is a huge increase in
one year, and although again not stated, either must be an increase in the
number of practising physicians using the clinic, and/or an increase in the
fees charged per physician. A question arises
as to whether there has been any discussion with the current physicians in this
regard and whether they support either of these options. It is presumed that this increase is largely
based upon an increase in physicians practising in the clinic. Again in discussion with AHS, no contact has
been made with them as to recruitment of more physicians, again one of the
roles of AHS is to be involved in that task.
That is to ensure that physician are properly credentialed to practise
in Alberta, and that credentialing is in the hands of the College of Physicians
and Surgeons of Alberta. The current
provincial ratio of general practitioners to population served is approximately
1 physician to 1,200 population. A
clinic with 4 practitioners would then rely on a population of just under 5,000
to make their practise viable. That
translates to one half the population of the county using the medical
clinic. That assumption again puts the
viability of the clinic into question.
In that past week, I have spoken to 38 individuals who reside in the
county and asked them if they had ever used or would anticipate ever using a
clinic in Onoway, only 2 said they had ever used it, and no others stated they
would consider transferring their physician serve to that clinic as they had
family practitioners that they currently used elsewhere. That is anecdotal evidence, but worth considering
in the viability of an expanded clinic in Onoway.
·
The
business case financial statements do not mention any cost relating to the
house that the county purchased as a physician residence. What is that cost, yearly and accumulated,
and why is it not a valid expense to be shown in the business case?
·
The
budget shows a line for equipment loan repayment. What equipment is anticipated in that loan
repayment as this is a new expense not noted in the 2 year results financial statement? It is a substantial amount and if one of the
service increases noted include a radiology service, in my discussion with AHS,
this is not supported.
·
The
Board Structure notes that there will be three directors appointed, one by the
LSAC and that the LSAC CAO or designate will serve as the Executive
Director. Voting will be by
shareholdings of the member municipalities which with LSAC having 82.5%
shareholdings, which basically makes it a monopoly board of one. Will that appointee be a county councillor or
will the county take the opportunity to appoint a resident with some health
care experience, of which there are numerous, to this board? As noted in my previous letter of 21 April,
2019, will the executive director be paid, and further will the appointee to
the board be paid for time spent on this board’s activities. Where in the ORMC budget are these costs
noted?
As
a rate payer in the LSAC for 19 years, I would hope and trust that the county
council will take a serious second look at this proposal and not rush into
action that will ultimately, in my opinion and many others, result in an
increased tax load to each and every one of us.
No one is in disagreement about physician services in Onoway and area,
but this business case does not stand up to critical review.
Council,
please reconsider this proposal!
Clifford B Cottingham
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