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Final Report October 21, 2020 Central Temiskaming MMP Project Final Report October 21, 2020 Contents Page Chapter I: Executive Summary 3 Chapter II: Background to the Study 8 Chapter III: Municipal Overview 13 Chapter IV: Shared Services 31 Chapter V: Potential Shared Services Opportunities 36 Chapter VI: Considerations for Implementation 59 Appendix A: Sample Shared Services Agreements Appendix B: Critical Path for Implementation Appendix C: Municipal Service Profiles © 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 2 © 2017 KPMG(“KPMG LLP, a International”),Canadian limited a Swiss liability entity. partnership All rights and reserved. a member The firm KPMG of the name KPMG and network logo are of registered independent trademarks member orfirms trademarks affiliated owithf KPMG KPMG International. International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Central Temiskaming MMP Project Chapter I: Executive Summary Central Temiskaming MMP Project Executive Summary A. Background to the Study The terms of reference for our engagement were established in KPMG’s engagement letter dated March 5, 2020, the intention of our review was to provide the the Municipality of Charlton and Dack, the Township of Chamberlain, the Township of Evanturel, and the Town of Englehart (the “Group”) with an objective evaluation of the its operations, resources and service offerings currently provided by each municipality, with the view of identifying potential opportunities to share services intended to maximize value-for-money, minimize pressure on taxes and contribute towards the long-term sustainability of the member municipalities of the Group. With respect to this engagement, KPMG’s specific role includes: • Assisting the Group with the establishment of a methodology for the municipal shared services study; • In conjunction with each municipality’s staff, undertaking analysis of services, service and equipment levels and associated costs and funding; and • Summarizing the results of our analysis and presenting potential opportunities in the form of business cases to the Group. B. Shared Services The shared services study explored all aspects of the Group’s operations with each service given consideration for its potential suitability for sharing among the four participating municipalities. Based on our analysis of the Group’s current complement of services and associated service delivery models, the Group appears to demonstrate a high degree of participation in shared services including commonly shared services such as building controls as well as the sharing of other resources. Regardless, there still exist additional opportunities to pursue the benefits contained within the report which include: • Shared service arrangements have proven successful elsewhere, with 368 of Ontario’s 444 indicating that they participate in some form of shared service arrangement. • Municipalities are facing financial challenges with operating grant levels either declining or remaining constant while operating expenditures are continue to increase on an annual basis which is then resulting in a greater reliance on municipal taxation as each municipality’s main revenue source. This financial pressure is placing a greater emphasis on the realization of operating efficiencies and effectiveness. • With the formal adoption of asset management plans and a heightened emphasis on managing capital, municipalities are seeking out ways to address their respective infrastructure needs and any cost savings identified and realized have the potential of being re-invested in an attempt to begin to address this challenge. © 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 4 (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Central Temiskaming MMP Project Executive Summary C. Potential Shared Services Opportunities The following seven opportunities for potential implementation are: • Shared bylaw enforcement and animal control • Formalization of shared recreational and cultural services • Group purchasing • Regional training • Regional tourism • Solid waste management – the potential of one contract for services • Water and wastewater management – the potential of one contract for services With respect to these opportunities, it is important to note that: • The current staffing levels of the Group reflect the nature of smaller municipalities in Northern Ontario and as such, there exists a multi-functional approach to job responsibilities and the overall efficiency of municipal operations reflecting a focus on fiscal control. Given this, we do not believe that shared service arrangements will result in significant, if any, reductions in staffing levels without a corresponding impact on service levels and therefore, the ability to achieve major cost reductions is likely limited to non-personnel expenditure items. • In certain instances, consideration could be given to reinvesting a portion of any potential savings in order to enhance service levels and municipal capabilities. • Ultimately, the pursuit and implementation of any of the following opportunities will most likely result in greater operating efficiency rather than substantive cost savings. © 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 5 (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Central Temiskaming MMP Project Executive Summary C. Potential Shared Services Opportunities Short Medium Long (<1 Year) (1 to 2 Year) (2+ Years) High 1 2 Bylaw Enforcement and Formalize Recreation and Animal Control Cultural Shared Services 3 Group Purchasing Med Priority 6 4 Solid Waste Management Regional Training 7 Low Water/Wastewater 5 Operations Regional Tourism Timeframe © 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 6 (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Central Temiskaming MMP Project Executive Summary D. Acknowledgement We would like to take the opportunity to acknowledge the assistance and cooperation provided by staff of the Group that participated in the study. We appreciate that studies such as this require a substantial contribution of time and effort on the part of the Group’s employees and we would be remiss if we did not express our appreciation for the cooperation afforded to us. © 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 7 (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Central Temiskaming MMP Project Chapter II: Background to the Study Central Temiskaming MMP Project Background to the Study A. Terms of Reference The terms of reference for our engagement were established in KPMG’s engagement letter dated March 5, 2020, the intention of our review was to provide the the Municipality of Charlton and Dack, the Township of Chamberlain, the Township of Evanturel, and the Town of Englehart (the “Group”) with an objective evaluation of the its operations, resources and service offerings currently provided by each municipality, with the view of identifying potential opportunities to share services intended to maximize value-for-money, minimize pressure on taxes and contribute towards the long-term sustainability of the member Municipalities of the Group. With respect to this engagement, KPMG’s specific role includes: • Assisting the Group with the establishment of a methodology for the municipal shared services study; • In conjunction with each municipality’s staff, undertaking analysis of services,service and equipment levels and associated costs and funding; and • Summarizing the results of our analysis and presenting potential opportunities in the form of business cases to the Group. B. Study Methodology The methodology for the review involved the following major work steps: Project Initiation • An initial meeting was held with the Clerk for the Township of Evanturel to confirm the terms of the review including the objectives, deliverables, methodology and timeframes. • A Project Team was established consisting of the Clerk for the Township of Evanturel, the Clerk-Treasurer/Chief Administrative Officer for the Township of Chamberlain and the Municipality of Charlton and Dack, and the Chief Administrative Officer/Deputy Clerk/Treasurer for the Town of Englehart for the purposes of all project related matters. • KPMG provided all participating Councils with a presentation on May 6, 2020 to provide an overview of the project including the objectives, deliverables, methodology and timeframes. Current State Assessment • Information concerning the Group’s operations, staffing and financial performance were reviewed and summarized in order
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