Civic Alert: Hitting back at $22 million megacity abuse

The amount — $21.8 million — was publicly unveiled for the first time this week when the financial results for 2006 were presented to Council (and Westmounters at large) at the monthly meeting on Monday evening.

The precise claim will be $21,798,000 — or approximately $1,000 for every resident adult and child. It is in addition to the approximately $40 million in loans incurred on Westmounters’ behalf by the megacity, a large part of which had little public benefit.

Meantime, Montreal is claiming that Westmount owes $2.4 million.

Central to Westmount’s claim is the pay-as-you-go issue. Prior to the annexation, Westmount spent about $4 million each year on routine capital maintenance, and this was a major element of the property tax bill so that the work could be paid for in cash.

During the forced merger, Westmounters were taxed each year at the same level as though they were funding the pay-as-you-go cost. The work done, however, was paid from term loans.

In effect we received no benefit from those taxes and were then charged again for the expenses Montreal incurred on Westmount work.

After the four merger years these charges total just over $16 million. The City holds that Westmount property owners should not have been taxed for what was originally part of the annual operational budget.

The work actually done was about $13 million, and this forms part of the loans for approximately $40 million that Westmount was forced to incur by Montreal during the four megacity years.

Loans: $40 million

These have been repaid with new loans obtained by Westmount, which will take many years to pay off.

The amount of the claim emerged this week because Westmount is near the deadline to submit a balance sheet to the provincial government for the 2006 financial year.

It meant that the opening balance had to be established for January 1, 2006, when the city was reconstituted following the forced merger with Montreal.

There was an initial balance set by the Transition Committee’s auditors, Harel Drouin.

As more details emerged of the multiple, and often confusing, government decrees concerning the forced annexation and its ending, Westmount’s own auditors, Raymond, Chabot, Grant, Thornton, drew up a new financial situation.

They presented it to the City in a report dated June 13. Since then it has been “painstakingly reviewed” by the business law firm, Cain, Lamarre, Casgrain, Wells, which the city has retained to advise on the legislation and decrees relating to the forced mergers and demergers, as well as the principles of law involved.

Complies with spirit

Explaining the situation at Monday’s meeting, Mayor Karin Marks said the legal counsel contended that Westmount’s claim was in full compliance with “both the text and the spirit” of various demerger laws enacted by the Quebec government.

“It is a strictly administrative process and the issues were known to Montreal’s Finance Department. But it is not a straightforward situation with many decrees open to interpretation, one result being the significantly divergent conclusion of the amount owing.”

The balance of the claim ($5.6 million) relates to “a considerable number of items”, said Marks, for which Montreal should compensate Westmount. These include pension and CSST contributions as well as underfunding many operational budget items.

“We have fought to receive compensation for these items since 2002,” said the mayor. “We have continually tried to resolve them, but it is our responsibility to ensure that our citizens are not taxed inappropriately and that all surpluses owed to the City of Westmount are used for the benefit of residents.”

This is one of the final steps in the demerger process. Although large for Westmount, it is a minor item for Montreal of budgets totaling more than $15 billion over four years.

“We have documentation to validate every dollar,” Marks told Monday’s council. “Montreal has a different slant. Council will try to resolve the impasse, but should the approach not succeed, Council has an obligation to defend the legitimate rights of taxpayers.”

Landmark achievement

With the $22 million claim, the challenge to the former megacity could well be seen as the landmark action of the Marks administration. In those forced merger years, the mayor was joined by the two-person council (John de Castell and Cynthia Lulham) in preparing the way for this challenge after reconstitution.

Key staff support from Director-General Bruce St. Louis and Alan Kulaga, then Director of the Borough Office, included meticulous documentation of errant megacity decisions.

These are now the foundation of the legal evidence to support the claims being made.

Rejuvenated council

Monday’s council meeting itself had none of the momentous air that the claim represents. There was an energetic “back-to-class” mood after the extra long summer break.

It began with a joyous celebration by the Dolphin Swim team and their parents following their hosting the regional swim meet and winning the championship. The Lawn Bowling Club also was acclaimed for hosting the National Championships.

Five-year deal

The Council confirmed the appointment on a five-year contract of Mario Gerbeau as City Clerk and Director of Legal Services, following a welcoming introduction by Cllr. Tom Thompson.

In thanking Nancy Gagnon for filling in for the last year as Assistant City Clerk, Thompson linked Council’s appreciation to Alan Kulaga as Interim Clerk.

He pointed out that during recent vacation weeks, Kulaga, the Director of Human Resources, had also been Interim D-G as well as Interim Clerk.

“If he took lunch alone, he held a staff meeting,” Thompson quipped.

Current situation

In addition to what may well be regarded as a historic 2006 Financial Report, City Treasurer Claude Lachance presented another first: public interim operating results for the current year. It is a further opening of the window of municipal information.

Last spring, WMA President Henry Olders saw a year-to-date presentation at a special meeting of St Lambert Council involving citizens, and asked Westmount Council for something similar.

There was no response, but last fall the Quebec government legislated that municipalities present at least two interim results annually.

In Westmount’s case, the situation at the end of April was the best that could be provided, although Lachance expects to deliver more up-to-date information in future.

Less spending

It revealed an under spending of about $100,000 on the expense budget of $9.6 million. Allowing that most tax bills had been paid by April 30, revenue was up $2.6 million, or 10.3 per cent, over the budgeted $27.4 million.

The new law also requires overall projections for the year to be published. Revenues of $36.2 million are expected for 2007, a more modest $1.6 million improvement on the budget compared with the first third of the year.

No public copies

Although the 2006 report was available at the meeting, it was only in French and difficult to follow in any language. The WMA’s Olders thought that more should be done to make the information accessible to those interested.

“It should have been on the web site, and once again I offer to do it for the City and also run such documents on the WMA site,” Olders said afterwards.

Turf friction

The plaudits that come to Marks and her team for their stand on Montreal’s financial abuse could be somewhat dimmed over the Artificial Turf issue.

Five Save the Park activists, all of them residents of Melville Ave., stepped forward at Question Time and gained an unequivocal statement from Mayor Marks that an artificial surface was not contemplated at this time.

However, Patrick Barnard’s unusually mildly phrased request that the interested public be somehow involved in further discussion over the choice of alternative solutions was greeted with cold water.

“We don’t want a repeat of recent history,” was about the most aggressive remark Barnard made. Mayor Marks replied that the decision was Council’s to make and there would be no more formal public consultation.



- Community activist Don Wedge can be reached at calert@web.net. His columns are archived at www.westmountexaminer.com, go to Opinion.