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HomeMy WebLinkAboutTR-74-89 ADDENDUM UNFINISHED BUSINESS TOWN OF NEWCASTLE REPORT File # � ' Res. # By-Law # METING: COUNCIL MEETING DATE: September 25, 1989 REPORT #ADDENDUM TO TR-74-89 FILE #: SLB,JECT: COMMUNITY & RECREATION BOARDS RECOMMENDATIONS: It is respectfully recommended to Council the following: 1. That Addendum to report TR-74-89 be received; 2. That Report TR-74-89 be lifted from the table; 3. That the recommendations contained in Report TR-74-89 be approved; 4. That the parties indicated hereto be advised of Council's decision. 1. BACKGROUND 1.1 At the Council meeting of September 11, 1989, Council recommended via resolution #pC-606-89 that Report TR-74-89 (copy attached) be tabled for two weeks to allow for the Treasury Department to contact the Chairpersons of the various Community and Recreation Boards to define the contents of the report. . . .2 ADDENDUM TO REPORT TR-74-89 Page 2 1.2 The Chairpersons of the following Recreation and Community Boards affected have been contacted and their comments have been noted as favourable. 1. Baseline Community Centre 6. Newtonville Community Board Hall Board 2. Brownsdale Community Centre 7. Orono Town Hall Board Board' 3. Burketon Community Park 8. Solina Community Centre Board Board 4. Hampton Community Hall 9. Tyrone Community Centre Board Board 5. Haydon Community Hall 10. Zion Park Board Board 1.3 Staff recommend that Report TR-74-89 be approved. Respectfully submitted, Recommended for presentation to the Committee John Rzesfut, Lawrence/ . Rotseff, Deputy Treasurer. Chief Administrative Officer. JR/PP ATTACH: TOWN OF NEWCASTLE ,_c ; REPORT File # 5"��, D Res. # By-Law # METING: GENERAL PURPOSE & ADMINISTRATION COMMITTEE DATE: September 5, 1989 REPORT #: TR-74-89 FILE #: SUBJECT: _ COMMUNITY AND RECREATION BOARDS RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-74-89 be received; and 2. That, in accordance with the Auditor's recommendations, and in compliance with the Municipal Act, Sections 81 & 82, the local Recreation and Community Boards (with the exception of the Orono Arena, Newcastle Arena and the Newcastle Community Hall) be dissolved as established Boards of Council; 3. That these Community and Recreation Boards be allowed to operate in similar fashion to the way they have historically, with the exception that they would not be required to submit their records for consolidation with those of the Town, and that there would be a mutual agreement established whereby the Town would lease the currently occupied premesis.for a nominal fee of $2.00 per year; and 4. That the local Recreation and Community Boards affected be notified that this procedure will be effective for the year ending December 31, 1989, and that they will be contacted prior to that date regarding. an appropriate agreement. BACKGROUND & COMMENTS: In 1986 a joint advisement_ was issued from the Ministry of Tourism and Recreation and the Ministry of Municipal Affairs which stated that if the local recreation boards were conducting their financial affairs without direct supervision and control of the Municipal Treasurer, they were operating in contradiction of the Municipal Act, Sections 81 & 82. (A copy of this memeo is attached for- reference.) 718 . . ./2 Page 2 TR-74-89 COMMUNITY AND RECREATION BOARDS Subsequently, in the annual audit management letters representing the years ended 1987 and again in 1988, the recommendation from the Town's external auditors, Deloitte, Haskins & Sells, was to dissolve these local recreation affiliate boards from their status of "commissions or boards of Council". If Council sanction this recommendation, the effect on the local recreation boards would be minimal. The boards would operate just as they have in the past, with the exception that they would not have to present their records annually for review and audit and subsequent consolidation into the Town's financial statements. There would be an agreement drawn up to state that the operations of the community service boards would be under their direct control, and they would be renting the facilities from the Town for a nominal fee. The Town would continue to maintain insurance on the property since in all cases these groups are operating on Town owned properties, and they could continue to apply for operating and/or capital grants as community service groups that are non-affiliated. This would be recognized as a welcome change for many of the boards who annually express their desire to maintain their own records and find it inconvenient to bring the books in twice a year for reveiw. It would also translate into substantial savings in terms of staff time to audit, review, prepare and type the financial statements for the semi-annual and year end reviews. There is also external audit time to factor into the cost analysis. in terms of Council representation, there would not be mandatory representation 'in consideration of the dissolution of these boards as "commissions of Council". Staff strongly recommend consideration to be given to this change in order to aleviate concerns expressed by the Province and the auditors. As well it would generate compliance with the Municipal Act, Sections 81 & 82, and rule out further unforeseen legal complications with regard to the operations of local recreation and community boards who are not under the direct control of the Municipality while being recognized as established "boards or commissions of Council". Respectfully. submitted, Recommended for presentation to the Committee rie Marano, wren EA Kotseff, Treasurer. Chief m- 'strative Officer. MM/lb 719 AQ5 14 ' 89, 11 : 29 MUM AFFAIRS OSHAWA F02 ., V �� 1 Ontario d�Isaomlm j Ministry of Ministbre du. Ministry of Ministi�re des Tourism and tourisme et des Municipal AEfaires Recreation loisirs Affairs municipates March 14, 1sse f I { J i TO : MUNICIPAL ADMINISTRATORS , CLERKS , TRTeASURERS AND RECREATION DIRECTORS i iWe would like to draw your attention to an . area of concern to both the .Ministry of Municipal Affairs and the Ministry of Tourism and Recreation. It has come to light that in a number of municipalities across the Province, municipal recreation and. community centre operations are maintaining bank accounts for 'fin- ancial transactions outside the control of the municipal. treasurer. This practice is in direct contravention of " Sections 81 and 82 of the 'Munici2al Act ., Legal. opinions have been sought by both Ministries , - which has resulted in the following policy b.y the Ministry of 'Tourdsm and Recreation : "It is Ministry poZic.y not to sanction or condone a clear contravention of the Municipal Act ar any other Provincial legislation.. The Min.istry' would attempt to resolve any such* matter by - negotiation, but if such methods fail, an applicant would be refused a grant" . This would clearly affect legislated grant programs directly aimed at municipal recreation, namely Programs of Recreation (Regulation 517) and the Community Recreation Centres Act , but it also may apply to any grant which is applied for by a municipality to support recreation activity such as lottery assisted or Provincial Incentive Programs . The enclosed pamphlet has been prepared jointly by both Ministries to assist municipalities in reviewing their recreation financing and to identify methods of operating Cont ' d.. . . . . 2 AUS 14 ' 89 11 : 29 MUN AFFAIRS OSHAWA P03 I within the Municipal Act , but still maintaining as much flexibility as possible. In addition, the local staff of both Ministries are willing and , able to provide direct assistance to municipalities* and their recreation committees j that find themselves in the position described. It should be made clear that this is by no means a universal Practice , although one which exists in a number' of communi- ties throughout the Province. Ii -is also not a practice I which has created a. great deal of operational difficulties , although the possibilities are there. The Ministries are Just trying to bring all operations within the legal frame- work of the Municipal Act and on ' a more .madern, �professional financial base. Your co-operation would be greatly appreciated in assessing your local operations and contacting your. local representa- tive of either Ministry where a contravention exists . We look forward to assisting in the orderly resolution of this problem. i Peter Jackson Bill Kriesei Manager Recreation Coordinator Field Services . Branch Operations Division Ministry of Municipal Affairs Ministry of Tourism &Recreation Enclosure f AUG 14 ' 89 11 : 30 MUN AFFAIRS OSHAWA F04 SOME EXAMPLES OF MODIFICATIONS TO COMMUNITY CENTRE FINANCIAL OPERATIONS TO CONFORM TO TEE,MUN CIPA hCT_—REQUIHEMENTS _._ --- Most municipal community centre and recreation committees operate within the requirements of the Municipal Act . In. instances where they do not , the most frequently cited reason is a concern over offending the many volunteers , without whose efforts , the centres and programs would certainly be less effective . The following examples are set forth to show some ways to correct improper financial procedures , reduce the risks to councillors and committee members•, and allow the volunteers to focus their efforts in the area where their .interests lie. ( 1 ) Municipality A owned a curling facility built with a Combination of local funds , municipal funds , and Provincial Grant . The municipality had established a Committee of Mana ement to oversee the operations and maintenance of the facility. The Club was effectively run by the Committee , with the assistance of interested curCers who looked. after most of the operations . The Committee members established their ow r. bank account , appointed .one of their members as secretary-treasurer , and only dealt with Council when capital improvement funds were required, or in those rare instances when they ended the year with a deficit and asked Council for an operating grant . When Council , Committee , and the curlers realized they were operating outside the statutory limits on financial matters , they rectified the situation by executing a rental agreement between the Curling Club and the ~Municipality. The Committee of Management was dis - solved . The main elements of the agreement were as follows : The Club paid the municipality an annual rent equivalent to the cyst of. fire insurance on the structure , fixed cost utilities , and. a sum to be set aside in a capital improve- ment reserve fund; Both were to purchase appropriate liability insurance ; The Club was to provide specified access Opportunities for the general ratepayers ; The Club was responsible for repairs under a certain dollar level ; Cont ' d. . . . . 2 AU G 14 189 11 : 30 P1UN AFFAIRS OS.HAWA P05 2 Plus other terms , such as agreement duration , right of inspection, terms of cancellation, conditions for capital improvements , etc. (2) Municipality B owned a large Community Centre/Arena,/Ball Park Complex. The facility was the focus of most recrea- tion activity in the municipality. The facility also served ratepayers of neighbouring municaipalities . By agreement , the neighbouring municipalities agreed to pay a portion of the annual operating deficit . The Committee of Management was dominated by members of the local Booster Club , which had raised all of the local funds on the municipality' s behalf, needed to match the Wintario and other Grants for Construction of the complex . From opening day, : Council had allowed the .Committee to handle the Centre ' s funds . The Booster Club kept its funds separate and donated its profits from dances , bingoes , banquets , etc . to the . Committee , mostly for capital improvements and for some operating costs . The Council and Committee had often been advised that the financial operations were outside the statutory limits and inadequate by reasonable standards of internal control . They were willing to accept the risks , and any extra cost , for fear o.f offending the volunteers on the Booster Club , until the other mu:Iicipalities started to question the deficit funding agreement under which they were contributing. To address the issue , the municipality enlisted the assistance of its auditor . to make detailed recommenda- tions . The main components of the auditor' s report _were: That the Booster. Club funds and the municipal funds be kept completely separate ; That the Committee recommend a budget to Council each year by March ist for both capital and operating . purposes ; That the Committee be allowed to authorize Payment of expenditures approved by Council Ln the annuaz budget , without further refer- ence to Council except for information purposes ; Cont ' d. . . .'. 3 AUG 14 ?. 11 :-31 MUN AFFIL I RS OSHAWA F06 3 — • That all Committee receipts be deposited to an. account in the municipality's name; That all cheques be Signed* by the Municipal Treasurer and one of two designated Committee Members ; That an appropriate petty cash fund be established for use by the - appropriate Committee Members where limited size cash Payments were required; That monthly operating statements be prepared by the Municipal Treasurer for the Committee and for Council ; That if the Club wished to donate to either operating or capital , purposes , the Committee would review the proposal 'and. stake a recommenda- tion to Council which would make the final decision; and That the Club be charged an appropriate rent for use of the facilities for recrea.tiona:l or fund—raising events . (3) Township C had purchased a ,surplus ' school to' be. used as a Community Centre in the , $amlet of D. Its primary uses were for Boy Scout meetings- abd Senior Citizens functions . The Council paid expenses such as insurance; and snow clearing for the parking lot . A Committee of Management had been appointed, composed mainly of members of Hamlet D ' s Senior Citizens Club . The Club and Committee ran a variety of Social events , and also occasionally rented Out . the facility for other events . No one was .sure how it had happened, but all funds ended up in one bank. account , handled by the Committee Chairman and a Secretary—Treasurer, who was also oa the Club executive. The Club used its profits for improvements to the facility, such as painting, renovations , and a new heating system. The Councillors appointed to the Committee of Management attended meetings infrequently, Cout2 about Cil. tisuslly heard improvements after they were done. Council was not unhappy with the arrangement , but its auditors pointed out that Council was in effect for the audit of the Club ' s financial transactio paying had also allowed munici ns and pal funds to be held outside the Municipal Treasurer' s control and to be expended Municipal Council approval , without Cont ' d. . . . . 4 AL!G 14 ' 89 11 : 32 MUN AFFAIRS OSHAWA P07 4 To solve the problem , Council , with the assistance of its solicitor, drew up an agreement , which was executed with the Club for a nominal annual sum. The Club took over complete responsibility for maintenance; Capital improve- ments , in consultation with Council ; and for .programming and use of the facility. The Council agreed, in the agr"eement , the term of which was concurrent with that of Council , to provide an annual operating grant equivalent to the cost of services it had previously been The Committee of Management was retained to maintaindang link between Council and the Club . No two situations are alike, and solutions or systems that work in one should not be automatically imposed on another . The following checklist may prove useful to you in assessing the adequacy of the financial systems) for you facilities . ur recreation /- � Has your auditor suggested changes which have not been made? Are all Council/Committee revenues deposite.d in an account requiring the Municipal, Treasurer ' s signature for disbursement? Are municipal and "booster/service club " funds Properly segregated? Dues the Committee present a complete budget to Council showing gross .revenues and expendi- tures for both operating and capital purposes ? i Are periodic operating statements presented to Council and Committee? Are all parties properly insured'? e. g. fire, liability ( for staff, volunteers , committee L- f.1,, ;"- members , etc. ) an Does ---- y lease/Joint agreement that you have or are contemplating tweet the requirements of the Ministry of Tourism and Recreation for grant. grant purposes . Staff of both the Ministry of Municipal Affairs and the Mzaistry of Tourism and Recreation Field Offices are available to discuss the above. For assistance, please contact the appropriate Field Office for your area.