Joint Report

CAO/Director of Finance

Recommendation Re: 2004 ADSAB Budget

Background

At the February Board meeting, it was decided that the Board should levy additional amounts including and Adjustment for First Nation funding for EMS – 2001 to 2004.

The Ministry of Health & Long Term Care determined that a portion of the First Nation funding for EMS received by this Board since 2001 should have been flowed to the City of Sault Ste Marie. The Ministry indicated that they would be making this adjustment in 2004 and the total impact would be $300,000 cumulative.

The issue of First Nation funding was brought to the attention of Management only one day prior to the Board meeting and any details were vague and unsubstantiated. The issue was brought forward to the Board as information and was subsequently added to the 2004 budget through the budget discussions.

As previously reported, the Ministry based their calculation on call volume. We are arguing that call volume is not a reasonable basis for determining First Nation costs as the tracking of First Nation calls cannot be accurate as the CCAC tracks calls based on where the call originated. Therefore, First Nation calls that originate outside of a First Nation are not counted, including transfers from a District Hospital to another Hospital that has required services available. In addition, it has not been determined whether this change will be implemented retroactively as originally indicated or from 2004 on. There are rumors (originating from within the Ministry) that it will not be retroactive.

Recommendation

We recommend that the Board treat the ongoing amount (2004 on) and the retroactive amount (2001 to 2003) as separate issues and adjust the 2004 budget to reflect only the ongoing amount as it will have a consistent annual impact on the Board’s budget.

The potential one-time adjustment for the years 2001 to 2003 can come out of reserves should the Ministry decide to apply their calculation retroactively. The Board’s reserves are intended to address these types of situations and shield the member municipalities from such occurrences. Should the adjustment not be retroactively applied, the Board will not be in a position of having to refund the one-time amount at the end of the year. In addition, the 2005 budget will not be skewed by the one-time levy when compared to the 2004 budget.

The municipal levies would be adjusted to reflect the removal of $225,000 from the 2004 budget. The 2004 increase would be $595,859 or 5.3%. In addition, the 2003 surplus of $423,021 would be refunded (as previously approved by Board resolution) for a total reduction of $648,021 from the 2004 levy. The net 2004 increase would then be $172,838 or 1.5%.