South Frontenac Council - Oct 15/13

Wilma Kenny | Oct 17, 2013

2012 Year End Audit

Breanne Bradshaw of the accounting firm KPMP reported on her firm’s audit of the township’s 2012 financial statements. She said taxes receivable were down slightly as a percentage of total revenue (a good thing), although overall property taxes had risen, largely as a result of increased assessment. Township assets of $6.6 million were offset by $6.3 million in amortization.

Roads expenses had gone down slightly, due to a mild winter, and the township had received more gas tax money than had been budgeted for. “Luckily there is not much to report: no control deficiencies, illegality, fraud, or abnormal transactions,” Bradshaw said.

She thanked treasurer Louise Fragnito and the staff for their full cooperation during the review process.

Found Money

Fire Chief Rick Chesebrough reported that in September he and CAO Wayne Orr had met with a company called Fire Marque, which is in the business of recovering costs from insurance companies for fire services provided by the municipality.

The business is based on the fact that each insurance company includes a clause in its policy for “peril” coverage: either $1,000 or $5,000 for residential properties or $25,000 for commercial. Evidently this portion of insurance is rarely collected, for the amount is small, and the regulations and procedures for doing so vary from company to company. Fire Marque would invoice the insurance company on behalf of the township, based on the standard incident report. They would then retain 30% of the amount, and pay the township the remaining 70%.

The company has been in business for 20 months, and currently is serving 19 fire departments. Chesebrough emphasized that collecting against the peril clause has no effect on the homeowner’s coverage: it does not affect their policy, reduce their coverage or increase their premiums.

Based on 2012 township fire statistics, last year’s revenue would have been $9374. The Public Services Committee reviewed the proposal and recommended that Council pass a by-law to enter into a contract agreement with Fire Marque for this service. Chesebrough also suggested that any revenue from this be placed in the fire department's capital reserve fund.

Councillor Vandewal said that although he liked the proposal, he did not agree with the revenue going into capital reserve, which already received 1% from taxes: he would prefer it be used to offset operating costs of the fire department.

Councillor York asked whether the fund would be locked in to facilities. Wayne Orr replied that his main concern was that the actual amount in any given year would be unpredictable; it was important not to come to depend on it.

Councillor Bill Robinson said it felt like council was ‘losing control’ and asked why an outside agency needed to be involved in the process.

Orr replied that township staff did not have the resources or in-depth knowledge of the various insurance companies to be able to access the peril funds. Council voted to proceed with a contract with Fire Marque, although Councillors Vandewal and Robinson voted against the proposal.

Council then went into camera to discuss a litigation issue.