Richard G. Ramsay Management Consultants Inc.

The Town of

Organization Study

Final Report

Presented to Town Council March 2007

Town of Pictou – Organization Study ______

The Town of Pictou Organization Study

Table of Contents

1 EXECUTIVE SUMMARY ...... 4 1.1 GENERAL ...... 4 1.2 SPECIFIC RECOMMENDATIONS ...... 4 1.2.1 Options for the Future ...... 4 1.2.2 Accountability ...... 7 1.2.3 Financial ...... 9 1.2.4 General Management ...... 10 1.2.5 Human Resources ...... 11 1.2.6 Organizational Structure ...... 12 1.2.7 Other Issues ...... 12 2 TERMS OF REFERENCE...... 13 3 THE APPROACH TO THE STUDY ...... 13 3.1 GENERAL APPROACH ...... 13 3.2 SPECIFIC APPROACH ...... 14 3.3 SPECIFIC WORK PLAN ...... 15 4 THE TOWN OF PICTOU...... 16 4.1 GENERAL ...... 16 4.2 SERVICES ...... 18 4.3 CONCLUSION ...... 21 5 THE EXISTING COUNCIL AND STAFF STRUCTURES...... 24 5.1 COUNCIL /C OMMITTEE ...... 24 5.2 CONCLUSION ...... 25 5.3 STAFF ...... 26 5.4 CONCLUSION ...... 27 6 POTENTIAL ORGANIZATIONAL STRUCTURES ...... 29 6.1 GENERAL ...... 29 6.2 COUNCIL /S TANDING COMMITTEE SYSTEM ...... 33 6.3 COUNCIL /C OMMITTEE OF THE WHOLE /C HIEF ADMINISTRATIVE OFFICER ...... 34 7 RECOMMENDED STRUCTURES ...... 35 7.1 COUNCIL STRUCTURE ...... 35 7.2 STAFF STRUCTURE ...... 37 7.3 THE COMMITTEE OF COUNCIL ...... 37 7.4 COUNCIL ADVISORY COMMITTEES ...... 37 7.5 THE CHIEF ADMINISTRATIVE OFFICER (CAO) ...... 38 8. INTER-MUNICIPAL AGREEMENTS: ...... 39 8.1 CURRENT AGREEMENTS ...... 39 8.2 CONCLUSION ...... 41 9. MUNICIPAL INDICATORS ...... 41 10. FINANCIAL CONDITION OF THE TOWN...... 47

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10.1 CURRENT FINANCIAL ISSUES ...... 47 10.2 CASH BALANCES , LIQUIDITY & ACCOUNTS RECEIVABLE ...... 47 10.3 RESERVES AND INTER -FUND LOANS ...... 48 10.4 OUTSTANDING LONG TERM DEBT AND DEBT CAPACITY ...... 49 10.5 OPERATING SURPLUS ...... 53 10.6 FINANCIAL MANAGEMENT ISSUES ...... 54 10.7 FUTURE FINANCIAL CAPACITY ~ THREE YEAR OPERATING FORECAST ...... 56 10.8 CONCLUSION ...... 59 11 FUTURE CORPORATE PLANNING ...... 60 12 FINAL REPORT COMMUNICATION PLAN...... 61 13 IMPLEMENTATION PLAN ...... 62 14 APPENDICES ...... 63 14.1 ORGANIZATIONAL FRAMEWORK MODEL ...... 63 14.2 RELEVANT SECTION OF MUNICIPAL GOVERNMENT ACT RE CAO ...... 64 14.3 RECOMMENDED PROCUREMENT OF GOODS AND SERVICES POLICY ...... 68 14.4 RECOMMENDED HUMAN RESOURCE POLICIES ...... 74 14.5 DRAFT COMMITTEE OF COUNCIL POLICY ...... 75 14.6 DRAFT CHIEF ADMINISTRATIVE OFFICER TERMS OF REFERENCE ...... 76 14.7 STUDY TERMS OF REFERENCE ...... 81 14.8 FEEDBACK PUBLIC MEETING ~ MARCH 13, 2007 ...... 84 14.9 IMPLEMENTATION PLAN ...... 86 14.10 MUNICIPAL INDICATORS ...... 94 14.11 THREE YEAR OPERATING FORECAST ...... 95

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1 Executive Summary

1.1 General

As a result of a significant financial deficit for the year ended March 31, 2006, the Council of the Town of Pictou recognized a need to review the organization to ensure that it is operating in an effective and efficient manner and in the best interests of the taxpayers. The Town requested the Provincial Government Department of Service and Municipal Relations (SNSMR) to allow the Town to recover the deficit from taxpayers over the next two years. SNSMR agreed, with the provision that this study would be undertaken.

An Interim Report was presented to Town Council and to the community that identified a number of issues that required the attention and action of the Town Council.

This Final Report to Town Council provides specific and concrete recommendations to address those issues.

1.2 Specific Recommendations

1.2.1 Options for the Future

Based on the three-year financial forecast for the Town of Pictou, the Town cannot be sustained without significant cost savings, increased property tax rates, infusion of new forms of revenues, or a combination of those strategies. One has to keep in mind when determining which strategies to adopt, however, that the forecasts do not include the infrastructure deficit which could easily exceed $1,000,000.

The town cannot sustain the level of services without these capital expenditures. Not being financially capable of looking after this infrastructure deficit could put the

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Town at a serious health and safety risk – such as poor water quality, safety of motorists and pedestrians due to unkempt streets and sidewalks, and the risks to employees operating old equipment. In addition, the maintenance costs of old equipment and the continuous patching of streets and sidewalks, raises the question of cost vs. benefit.

It may be a normal reaction to “just cut costs”. We have heard over the last few months during our interviews that there may be a few areas where costs can be reduced, but, but on the other hand it was also stated that the Town should make a higher investment in tourism and heritage services, rather than cut costs.

The conclusion as to the sustainability of the Town as an entity into the future results in four options for consideration:

1. Status Quo In our opinion the status quo is not an option. Proposed tax rates into the next number of years would not be supported by businesses or residents. The population has decreased an additional 1.9% persons since 2001 census. Residential development is occurring at a low pace in the town. The commercial tax base (only 19% of total assessment) is decreasing due to a lack of new investment and the phase out of the business occupancy assessment. Costs of services are increasing due to normal inflation. The current tax rates do not attract residential or business investments in the Town.

2. Status Quo with Substantial Reduction in Expenditures The second option that we examined is the status quo with substantial reduction in expenditures. Although a number of expenditure reductions could be achieved, some may have a negative impact on the level of services provided by the Town.

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As a result of a thorough review of the Town’s operating expenditures we note the following:

 The tax rate subsidizes the aquatics programs by approximately $86,000.  The tax rates subsidizes the Hector Quay, Visitors Marina, and Ship Hector by approximately $200,000.  The Decoste Centre subsidy totals approximately $110,000.  The Town is faced with a recommendation from the RCMP to increase the resources by one officer. That will cost the town an additional $85,000 per year.  The fire service cost is $$368.000, or approximately $100 per resident. Major reduction in these expenditures may hinder the safety of the citizens.  The Department of Public Works budget totals approximately $900,000 of which 52% is staff wages and benefits. Our interviews indicated that the public appreciate and are satisfied with the level of those services. Included in that budget is approximately $200,000 for maintenance of equipment, streets, and snow clearing. Street lights cost $72,000. Approximately $241,000 of the wage costs are allocated to the water utility and are included in the water rates.  The amount included in property taxes for recreation programs and facilities, including staff salaries, is approximately $214,000.  Fiscal services costs that are non-discretionary total approximately $883,000.

This scenario of significant cost reduction must be examined by the Town immediately in prior to the preparation of the budget for 2007/08. In order to eliminate the 2005/06 deficit and the projected deficit for 2007/08, costs must be reduced by approximately $186,000 in 2007/08. In order to eliminate the deficit for 2008/09 costs must be reduced a further $105,000.

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3. Sharing Services with another Municipality The third option is for the Town to determine the feasibility of sharing services with another municipal unit in . The most logical “partner” would be the Municipality of the County of Pictou, whose offices are currently located within the Town of Pictou. Some services that could be shared would be:

 finance and administration  recreation programs, facilities, and administration  bylaw enforcement  maintenance of water systems and waste water systems

4. Merge with the Municipality of the County of Pictou The final option for consideration is for the Town of Pictou to merge with the Municipality of the County of Pictou. The research of this option was not included in the Terms of Reference for this study, however, due to the significance of the financial deficit and infrastructure deficit, along with the replacement of the Town Clerk, and the proposed joint waste water treatment plant with the County, it may be the appropriate time for a formal study into this scenario. The merger may also give the larger Town/County a more significant position to increase economic development, business growth and more influence when discussing issues with other levels of government.

1.2.2 Accountability

Accountability is one aspect of a good governance system. It is defined as the obligation to answer for an assigned obligation. Therefore, it is recommended:

 Town Council issue a quarterly newsletter to the public to fulfill its mandate of reporting to its electorate. The report should outline the progress to date on

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implementing the recommendations in this report, and other important issues affecting the Town currently and in the future.

 A schedule be prepared that requires key boards and agencies, in particular, those to which the Town makes a financial contribution, to appear before Committee of Council at least yearly to provide information about the organization.

 Town Council prepare a three-five year strategic plan, vision and mission statements, including action plans, to provide guidance to the Council, staff and public.

There are a number of policies that are required to facilitate accountability within the organization. It is recommended:

 A Procurement Policy be developed to indicate publicly the manner in which goods and services are acquired by the Town (see Draft Policy in Appendix 14.3).

 Human Resource Management Policies be developed to guide management and non-union staff as to working relationships (see key Policies in Appendix 14.4).

 A Service Level Policy be developed to clearly outline the level of each service the Town intends to provide. This will facilitate the preparation of the annual operating budget and will provide clarity to the taxpayers of the levels of service which they can expect to receive.

 The Town formally evaluate all services to determine the outcome of these services relative to current expectations and to ensure that services delivered by the Town are relative and efficient. This formal review should be carried out on a rotating basis every three years.

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 The CAO ensures timely and concise financial reports and key performance indicators are provided to Town Council and Department Heads on a monthly basis.

1.2.3 Financial

The Town is not legally permitted to operate with a deficit, according to the Municipal Government Act. Therefore, the 2007/08 and 2008/09 budgets will each include a sum of $105,000 to recover the previous deficits. In addition, Town Council has a fiduciary responsibility to ensure that effective financial management practices and policies are in place. It is recommended:

 A Cash Management Policy be developed to clearly indicate how cash resources are to be managed and maximized.

 A Tax Collection Policy and Tax Sale Procedure Manual be prepared to indicate to all taxpayers the manner in which all overdue taxes will be recovered, and further, that a significant effort be placed immediately on the recovery of all outstanding taxes.

 In order to accurately reflect the reserve account balances, as well as the accurate reporting of interest income and interest expenditures, Town Council, in concert with the auditor, reflect the appropriate balances in the Special Capital Reserve Fund, the Capital Fund, and the General Operating Fund.

 A ten-year Capital Improvement Plan be prepared which should include an inventory of all Town-owned assets, their current condition, and their useful life, to determine when they will need to be replaced, and at what cost. This information will be used to determine the need for additional debt, the use of reserves, operating budget requirements, and the impact on future tax rates.

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 As it becomes financially possible, and in accordance with Council policy, reserves be set up for future capital expenditures.

 The Town increase its operating surplus (working capital) to ensure timely payments to suppliers and for normal regular payments. It is recommended that working capital should be a minimum of three months payables or 20% of the annual operating budget in order to cover expenditures until tax billing occurs.

There are a number of specific recommendations to improve the financial management practices in the Town. It is recommended:

 An overall Financial Management Plan be developed that includes a number of fiscal policies and practices to ensure a financially-healthy Town.

 The preparation of the annual operating and capital budgets be done in a more transparent manner. A formal budget preparation and approval process to include public consultation prior to final approval of the budget must be developed. Under normal circumstances the annual budgets should be prepared within two months following the end of the previous fiscal year.

1.2.4 General Management

True interactivity is not about clicking on icons or downloading files, it's about encouraging communication. Edwin Schlossberg , 2002

Communication is vital to an effective organization. It provides an opportunity to share information and ideas within the entire organization. It is recommended:

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 General staff meetings be held by the CAO on a quarterly basis to exchange ideas and issues in the Town operations. Department meetings should be held at least monthly for the same purpose. The CAO should meet with Department Heads on a bi-weekly basis to exchange ideas, consider future trends in operations, to prepare common approaches to management issues and to plan for effective use of human and financial resources.

 The authority and responsibility of the CAO be clearly stated in policy as directed by the Municipal Government Act. Such a policy guides the CAO and Town Councillors as to who is responsible and who has authority to carry out the necessary day-to-day operations.

 A formal Management Team be formed consisting of the CAO, and Department Heads. There are a number of issues that require a corporate perspective that can be handled by the Team of Managers. The purpose of the Team is to jointly develop recommendations, as required, to Town Council on all aspects of the Town operation, and to develop advice to Town Council on the future of the Town.

1.2.5 Human Resources

In order to attract and retain employees, it is incumbent on the Town to provide a reasonable place in which to work and to manage the human resources consistent with policy and consistent with current human resource management practices. It is recommended:

 A formal Human Resource Management Strategy be developed that outlines the Town’s overall management philosophy. The strategy should include position descriptions, a salary administration plan, a performance management system, and human resource policies that state the working provisions for non-union staff.

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 A formal Employee Training and Professional Development Policy be developed to manage the training and development of the employees of the Town and to ensure a managed succession plan, which includes the requirement for a needs analysis, funding policy, and identification of potential employee retirements.

 Management address the identified personnel issues.

1.2.6 Organizational Structure

It is recommended that Town Council adopt the Council/Committee of Council/CAO structures as outlined in Section 7. Operationally, this provides more responsibility for the CAO in management, leadership, policy direction advice, and future visioning. It also means less day-to-day responsibilities and an increased policy initiative role for Town Councillors. Included in this recommendation is the replacement of the Town Clerk position with the Chief Administrative Officer position. A Terms of Reference for this position is included in Appendix 14.6.

1.2.7 Other Issues

There were a number of operational issues were identified and the following recommendations are made to address these:

 An Information Technology (IT) Strategy be developed to identify current use and future needs to facilitate e-commerce concepts and modern business practices in addition to the efficient sharing of information.

 An assessment of use of energy in Town operations be reviewed to identify possible cost containment practices.

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 A formal Risk Management Policy be developed that identifies current and future risks in Town operations.

2 Terms of Reference

Generally, the Terms of Reference for this study required an examination of the Town of Pictou to:

1. Determine if the Town’s structure is efficient, effective, and appropriate for the delivery of services to the Public, and Town Council, and 2. To recommend strategies that would result in a strong, viable local government for the residents.

The entire Terms of Reference can be found in Appendix 14.7.

3 The Approach to the Study

3.1 General Approach

 Generally, the study proceeded under the supervision of an Advisory Committee, consisting of the Mayor, the Deputy Mayor, the Town Clerk, and the Municipal Advisor. From the Department of Service Nova Scotia and Municipal Relations, Province of Nova Scotia. Other Councillors were invited to attend meetings of the Advisory Committee.

 The study was carried out in a transparent environment. That is, all participants were advised of our role, what their input would be used for, and how they could impact the result. In particular, in order to be aware of the tendency of staff to be anxious of the study, a user-friendly and non-

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threatening approach was used, encouraging input, and attempting to relieve the anxiety.

 Town Councillors and other stakeholders were encouraged to provide feedback and to provide opinions that would assist the study.

3.2 Specific Approach

 Councillors, staff, and other external stakeholders were interviewed to clearly define the issues that would be addressed in the study. The public were encouraged to provide input during the study to assist in issue identification.

 In order to obtain an understanding of the current structures and related challenges, research was carried out to examine relevant reports associated with municipal government structures, financial models, and alternate service delivery models.

 A review was carried out of related studies, financial information, by-laws, policies, minutes and other important information of the Town.

 Financial projections have been included in the report to report on the current and future financial capacity of the Town, as well as the Town’s long-term- debt capacity.

 The current Town Council structure was studied to determine if an effective decision making system is in place.

 The current staff departmental structure was studied to determine if services can be delivered in an efficient manner to the taxpayers.

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 The human resource strategy and systems were reviewed to determine if the culture of the Town administration is based on modern human resource practices.

 The services provided by the Town were reviewed to determine if the Town is meeting its legislated mandate, as well as to determine the level of service being provided in relation to current staff resources.

 An implementation plan is included to facilitate implementation of the recommendations contained in the final report. The implementation plan includes the specific tasks to be carried out, an assignment of resources, as well as a timetable for implementation of the approved recommendations.

3.3 Specific Work Plan

The specific work plan was carried out in five phases:

PHASE 1: Obtained an understanding of the current organizational structures and associated challenges, weaknesses and potential improvements.

PHASE 2: Clarified with Town Council and the Town Clerk, the services for which the Town is responsible, in order to define the most efficient organizational structure for the Town.

PHASE 3: Identified the options for administrative and legislative structures required to effectively carry out the functions of the Town.

PHASE 4: Prepared the Interim Report to Town Council, staff, and public to receive comments and answer any questions. The Interim Report related the consultant’s findings from interviews, records examination, and research. It

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included issues identified, our understanding and assessment of the current structures. This Phase was simply a reporting and feedback phase.

PHASE 5: Prepared and presented a Final Report to Town Council and to the public. The Final Report includes structure options, organizational charts, and recommendations to address the issues identified in previous phases. The Final Report includes a recommended implementation plan to implement the recommendations contained in the report.

4 The Town of Pictou

4.1 General

The Town of Pictou, located in the County of Pictou in northern Nova Scotia was incorporated as the first Town in Nova Scotia in 1873. The Town is located adjacent to five other municipalities, including the Municipality of Pictou, and the Towns of , Westville, New Glasgow and Trenton. Census 2001 states the population was 3,875, a decrease of 147 or 3.7% from the 1996 census. Since the census of 1991, the population has decreased by 6.4%. The town consists of 7.94 sq. km. Based on population, the Town is the 12 th largest of thirty-one towns in Nova Scotia.

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Statistics provides the following relevant 2001 census data :

Statistic Town of Pictou Nova Scotia Change population since 1996 -3.7% -.1% Age 0-19 24.6% 25% Age 20-54 46.6% 50.9% Age 55 and over 28.8 24.1% Average earnings (worked full year 2000) $39,514 $37,872 Employment in resource-base, manufacturing, wholesale/retail 45% 38% Other employment 55% 62%

Development Statistics (Source: Pictou County District Planning Commission)  Municipal development permits issued 2006 – 24 (2005 - 30)  % of total permits issues in Pictou County towns 2006 – 9%  # of new lot approvals 2006 – 1 (2005 – 3)  Value of building permits 2005 - $1,285,600  %Pictou Town of total building permits in Pictou County 2005 – 3.2%  # of dwelling units permits 2005 – 2 (or 1% of total Pictou County)

The Town is governed by an elected council of four Councillors and a Mayor. Elections are held every four years, with the next elections to be held in 2008.

Based on an annual revenue budget (2006-07) of approximately $4.6 million, the Town provides a range of public services to its residents and the businesses located in the Town. These services, listed below, are provided through a combination of municipal staff, inter-municipal agreements, contracting out and the support of volunteers.

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4.2 Services

Protective Services Fire service - provided by the Pictou Fire Department (approximately 30 volunteers) and other fire departments within the municipality, as required, through a mutual aid agreement. The Town provides funds generally to cover the operational costs of the Pictou Fire Department and assists with some major capital acquisitions. Police Services – provided under contract by the Royal Canadian Mounted Police. The Town is charged annually for six members, and provides a stenographer for their office. By-law Enforcement – services provided by one full-time employee include animal control, enforcement of Town by-laws, assists in traffic control, and other general services to Town departments. Emergency Disaster Management – a shared-services agreement among the municipalities in Pictou County (Regional Emergency Measures Organization) provides the response protocol for an emergency within the municipalities.

Transportation Services Streets and sidewalks – maintained by municipal staff, including patching and paving, snow and ice control, as well as street paving and signage. There are 39.4 km of paved streets in the Town. Street Lighting – facilities leased from Nova Scotia Power

Water Utility The Town owns and operates a water utility that is responsible for the provision of water to residents and businesses (approximately 1,300 customers). Water is piped from a production wells where it is treated. Town staff operates and maintain an 800,000 gallon stand pipe, the water treatment plant, and related transmission and distribution mains (34.11km).

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Environmental Services Wastewater Collection and Treatment – the Town collects wastewater that currently is discharged into Pictou Harbour without any prior treatment by the Town.. Town staff carries out operation and maintenance on the sewage collection system. There are 34.85 km of sewage collection pipes. Solid waste/resource management – The collection of waste and recycled materials is managed by the Pictou County District Planning Commission and service is bi-weekly. Waste is transferred to the Guysborough landfill and the Town is charged a tipping fee for the service.

Environmental Development Services Land Use Planning, and Development Administration – The Pictou County District Planning Commission, under a regional agreement, provides planning service, building inspection, civic addressing, development control, technical mapping services, and other special research services. Community Economic Development – provided by the Pictou Regional Development Authority, cost shared by regional municipalities. Public housing – Provided to the Town by the Regional Housing Authority, cost shared by regional municipalities on the basis of the related operating deficit.

Recreation Tourism and Culture Services Parks, playgrounds, and sports fields – provided and maintained by the Town staff. Facilities include four sports fields, three playgrounds, green spaces, and a public trail. Programs include sports, children and adult programs, and other special events. Staff resources for programs are seasonal as required. Aquatics – The Town uses the pool owned by Nova Scotia Community College to provide public swimming, aquatic lessons and courses, water fitness, and other public uses. It is staffed by town employees. Special events –Town-sponsored events are provided by staff of the Town. Volunteers provide many other special community events supported by Town staff.

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Waterfront Development – The Town owns the Ship Hector, a replica of the original ship that carried Scottish settlers to the area. In addition to the Ship Hector, the waterfront area has been converted into an attractive tourist and heritage area that includes the Hector Heritage Quay Interpretive Centre, the Hector Quay Visitor’s Marina, and the Decoste Centre, an entertainment center, all owned by the Town. The Decoste Centre is managed by a society through an agreement with the Town. The Town provides annual financial support to the centre. Seasonal staff manage and operate the interpretive centre, marina, and maintain and complete the replica of Ship Hector.

Legislative and Administrative Services Legislative Services – The Town Council is the legislative branch of the Town and is located in the Town Hall on Water Street. Administrative and financial services – provided by staff in the Town Office. Town staff handles property tax billing and collection, (approximately 1,900 tax accounts – one interim billing and one final billing) water billings and collection, support to Town Council, accounting and day-to-day financial and administrative services. Legal, engineering, and audit services are provided by contract by private professional companies.

Funding Contributions for Provincial Services The following provincially delivered services are funded by the Town’s tax rate:

 Correctional Services  Regional Library Services  Property Assessment Services  Education  Public Housing

The town services are funded by property taxation, grants from other levels of government, own revenue sources, user fees, and sale of services to other agencies.

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4.3 Conclusion

The Town of Pictou provides the type and level of services general to most towns in the Province of Nova Scotia. Each town in the province, however, normally has some anomaly due to its geographic location, demographics, affordability, culture of the organization and leadership, or its history. The Town of Pictou is no different. The level and type of public utilities and works services are normal, as compared to other Towns.

Land use planning is provided through a regional planning commission which has been the model used in Pictou County for many years. We question if this is the most cost effective manner to deliver this service. The Towns pays $56,000 annually in light of the very low level of development and planning activities that are occurring in the Town.

Towns in Nova Scotia provide the typical recreation services such as parks, playgrounds, sports facilities, trails, aquatics, and programs in all of these areas. The method of providing these services differs, however, based on facility availability, level of volunteerism, full-time and part-time staff levels, and the culture of the community need for recreation services. The two major facilities that cause the most concern in municipalities in Nova Scotia are arenas and pools. There are a variety of ways in which Towns use these facilities: outdoor vs. indoor pools, town-owned pools and arenas vs. community-owned pools and arenas, other institution-owned arenas and pools utilized by the Town for programs and sports, and other scenarios.

The most significant issue facing the Town of Pictou, other than the current and future financial viability of the Town, is its ownership of the waterfront assets. The level and nature of the waterfront development in the Town of Pictou, and, in particular, the ownership of such diverse assets, is, due to its heritage, tourism and cultural aspects, a service that is very anomalous and challenging for the Town. There is a definite variety of interests by various parties in the Town in the future development,

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Much of the setting for the waterfront can be traced to 1987 when the Pictou County Tourism Association commissioned a study of tourism potential. In 1988 another study laid the business plan for reconstructing the Ship Hector. That was twenty years ago. Since that time assets have been built and integrated with other previous projects. (Source: Pictou Waterfront Development Plan; SGE Acres Limited; 2004) Changes have been made in the governance and operational committees/agencies/Town departments to provide management, supervision, fund raising, and further restoration of the Ship Hector. The study prepared by SGE Acres, in association with The Tourism Company, for Town of Pictou Recreation, Tourism and Culture, was a “blueprint” for Pictou Waterfront Development, intending to “present a realistic and achievable tourism-focused strategy that builds upon past achievement, current strengths and untapped market opportunities”. It also provided “a strategic direction and a rational purpose for the Town and partners to implement action plans that support the development of the Pictou waterfront and Hector Heritage Quay as a world class tourism destination”.

Recently, a group called “Friends of Ship Hector” proposed to Town Council that the ship should be sailing, as a tourism draw. This is in stark contrast to the original philosophy in 1988 to construct a replica of Ship Hector. Town Council has not made a response to this idea pending further information, such as a formal business plan for that proposed strategy.

There are other interests that wonder if the Town’s current Department of Recreation Tourism and Culture is positioned and qualified to carry out the current management, maintenance and restoration of Ship Hector and associated assets on the waterfront.

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It appears, though, that all of these particular interests have, in their minds, what is in the best interest for the Town.

These assets have become a significant challenge and responsibility for the Town. The Council’s concern about the future of these assets is an extreme issue to be addressed now. Not only is the waterfront development a significant financial asset for the Town, in the opinion of many stakeholders, it is the asset on which the future may be built. The challenge for the Town is to provide a level of service, built on a workable business model, which uses the assets within the financial capacity of the Town. It appears that the current financial condition of the Town into the near future restricts any further major capital expenditures for these assets. In fact, current operating costs may have to be examined as a result of the projected financial deficits of the Town.

There is a variety of literature in Public Administration written about the role and effectiveness of “special purpose bodies” (SPB). The key issues surround the ideologies of the effectiveness of committees, boards, agencies, commissions and other SPB’s in comparison to municipal control over assets, finances, and accountability of SPB’s to a public. It is generally accepted that the devolution of power and authority by municipalities has resulted it seems, that no one ever is directly accountable. These bodies may become very isolated in the requirements for funding, not having an appreciation for the totality of fiscal and services responsibility of the Town Council. Elected Councillors, on the other hand, are directly accountable to the public for their policies, financial management, and decisions.

Due to the importance of the waterfront assets to the community, the financial investment made by taxpayers, and the future financial capacity of the Town, it is critical for Town Council to maintain a high level of control over their future use.

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Services delivered by the administration are typical services provided for effective financial management, human resource management, secretariat services to Town Council and committees, accounting and other general administrative services.

5 The Existing Council and Staff Structures

5.1 Council/Committee

Figure 5.1 “Council/Committee of Council Governance Structure” shows the current relationship between Town Council and its Committees.

The Town Council governs in a Council/Committee of Council system. It consists of a Town Council and a Committee of the Whole (Council) and a few standing committees. In addition to standing committees, Town Councillors’ may be appointed to other community agencies, boards and commissions. The legislated Planning Advisory Committee is in place. However, the legislated Audit Committee is not in place. The Town and RCMP are jointly preparing Terms of Reference for an RCMP Advisory Committee. Committees have not been authorized to expend Town funds.

Figure 5.1 Town of Pictou Council/Committee of Council Governance Structure

Town Council

Planning Pictou Waterfront Recreation Pictou Committee of Advisory Development Tourism & Culture Business Council Committee Comittee Committee Committee

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Council Representation on Council/Community Committees, Boards & Agencies

Standing Committees : Boards and Agencies : • Planning Advisory Committee • Decoste Centre • Committee of Council • Ship Hector Foundation • Recreation Tourism and Culture • Pictou County Tourism Association • Pictou Waterfront Development • Pictou-Antagonism Regional Committee Library • Fisheries Museum Ad Hoc Committees: • Lobster Carnival • Organizational Study Steering • Riverview Home Inc. Committee • Arena Commission • Pictou County District Planning Commission • Pictou Regional Development Commission • Pictou County Chamber of Commerce • Pictou County Genealogy and Heritage Society • Primary Health Care Advisory Board • A.E.F. Advisory Board • Pictou Business Committee • Pictou Source Water Protection Advisory Committee

5.2 Conclusion

This system of governance is generally effective for decision making. Town Council has limited the number of standing committees and is coordinating operational policies through a Committee of Council.

There are two committees that should be put in place to comply with policy direction from the Provincial Government: 1) Audit Committee to work directly with the auditor in planning the audit, consult during the audit and to review the audited financial

Richard G. Ramsay Management Consultants Inc. 25 Town of Pictou – Organization Study ______statements, and to receive the management letter from the auditor. and 2) an RCMP Advisory Committee, made up of citizens to liaise with the RCMP regarding policing and security issues in the Town. We understand that this is currently in the formation stage.

We note the number of outside agencies and organizations on which Councillors are members. Although these may be valuable organizations to the community, Councillors may wish to be cautious when accepting membership because it may require time commitments that could go towards the council planning needs.

Council decision making is perceived by external stakeholders as guarded and at times delayed. The role of Councillors and the Mayor must be clearly defined in policy and in accordance with the Municipal Government Act so that leadership responsibilities are understood by the staff and the public. That structure must be accountable to the public through a formal reporting process.

The agendas of Town Council and Committee of Council do not include formal time to discuss any matter other than the normal operative issues. One of the major issues that was identified in the Interim Report was the lack of a formal vision, mission, and strategic plan. Regular time spent on this would provide some clear and definite direction for Council, staff, and the public to move into the future, in a common direction.

5.3 Staff

Although there is no existing official Organization Chart, Figure 5.2 “Staff Organization Chart” shows our understanding of the number of approved positions and the relationship among the approved staff positions of the Town.

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There are 19 permanent full-time positions approved by the Town Council. In addition, seasonal and casual positions have been regularly approved by the Council to provide seasonal services in public works, recreation, tourism, and culture.

Figure 5.2 Town of Pictou STAFF ORGANIZATION CHART

Council

Town Clerk

Director Adminstrative Recreation, Special Deputy Public Works Assistant Constable Clerk Superintendent Tourism & Culture

Marketing/ Recreation Interpretive Ship Hector/ Administrative Operator/ Aquatic Special Events Summer Centre Marina Assistant Charge Hand Director Coordinator Intern Supervisor Manager

Administrative Water Utility Day Camp Resident Assistant Administrative Operator Leaders Artist Riggers Assistant

Interpretive Mechanic Pool Guides Carpenters Maintenance

Instructors/ Driver Blacksmith Lifeguards/ Day Camp/ Receptionist

Grader Operator

Labourer (Green Area Maintenance)

Operator/ Driver

Winter Operator (Part Time)

5.4 Conclusion

This is a typical organizational structure that is functionally based. One of the criticisms of this structure is that it may create a perception of “silo” mentality, that, if not managed properly, results in departments being seen as uncoordinated and

Richard G. Ramsay Management Consultants Inc. 27 Town of Pictou – Organization Study ______inefficient in the use of staff and financial resources. Therefore, it is practical that offices be located in a manner that common administration requirements can be met to offer effective customer service. Departments are formed on the basis of similar responsibilities and generally accepted cost and activity based formats. It is normal for all departments to have some level of administration services provided.

It does appear, however, that there is little coordination of resources, due mainly to a lack of inter-departmental and intra-departmental staff meetings, or department head meetings. This has a tendency for staff to become entrenched in their own functions and does not promote a corporate culture of coordination of work and task planning.

The responsibility and authority of each position in the organization must be clearly articulated through policies and position descriptions. The role of staff in relation to Town Council must be clarified to ensure management responsibilities are understood by all parties.

The most significant issues in the staff organization are within the Department of Recreation, Tourism and Culture.

There is a concern that the aquatics service net cost (after program revenues have been deducted) may be more than the Town can absorb. For the year ended March 31, 2007 it is forecasted that the net subsidy of these activities by the tax rate will be $86,000.

There appears to be a disconnect among Town Councillors, committees and agencies, management, the business community, and the general public, as to the role of the RTC department, and the costs of each service within the department. As a result of the lack of clear direction, mandate, and expectations of these stakeholders, it is perceived that the budget for the department is excessive, and issues are not being addressed by the staff of the department, which has resulted in a frustrated staff and public.

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There are a variety of committees, boards and agencies, public groups, and the department of RTC, notwithstanding the Town Council, that have some interest in the present and future of the waterfront area of the Town. Some are concerned that the staff structure and resources are not able to manage this asset. Some want to shift the focus of the Ship Hector from a replica status to a sailing status. A group has expressed an interest in management and maintenance and the future of the asset. A committee has requested staff resources from Town Council to carry out their perceived mandate. The Department Head wants clear direction from Town Council as to the role of the department in economic development and marketing. It is clear when Town Council deleted the position of Recreation Coordinator, that it changed the focus and level of recreation service to the taxpayers. The positive side of this issue is that all parties recognize it, and therefore, the solution may become clearer.

6 Potential Organizational Structures

6.1 General

The key components of an organizational framework are found on Appendix 14.1. The organizational framework on that chart will form the basis of recommendations on governance and administration systems. One can see from this chart the clear responsibilities of each structure within the Town and the manner in which both structures (governance and administrative) interact to effectively provide services to the taxpayers. As well, one can see the importance of the shared vision and teamwork required so that the Town is functional in all areas.

The role of the governance structure (Council and Committees) is to provide overall direction in the provision of town services. From a process of business planning, the Council will design the level of services to be provided. Operating under the mandate of the Municipal Government Act, the Council’s role is to be responsible for the direction

Richard G. Ramsay Management Consultants Inc. 29 Town of Pictou – Organization Study ______and actions of the town’s business. The Council can carry out this role by delegating some responsibility to advisory Committees.

An effective local government model must also reflect the basis of any democratic institution – reliance upon the endorsement of the public. The public interest must be served by all decisions of Council and committees. Therefore, an accountability framework must be designed to give the public the maximum access to Council decisions.

A clear understanding of purpose is important, in order for the Council to maintain its relevancy and focus and to be accountable to its goals. Therefore, a strategic planning exercise, that incorporates public opinion, is important for a Council to understand the breadth of the issues.

Given the complexity of municipal government, the governance structure must contribute to the sense of integration. It is possible and preferable in a small town to have a structure that can allow Councillors to be kept informed, to be advised, and to minimize any duplication of resources.

A governance structure must promote and encourage a sound relationship between the Council and its senior appointed official (whatever the position title). There must be a high level of trust and respect in order that the town is successfully meeting its mandate.

Although Council may decide to delegate some of its work to committees, boards and agencies, a successful governance structure must recognize that the Council has the ultimate authority for the Town’s actions. Therefore, the by-laws, policies and resolutions must clearly indicate the roles and responsibilities of the Council, committees and staff. In this role, Council must be able to use independent advisors such as auditors, lawyers and other professional resources in order to receive independent advice about the Town operation.

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A Council must be responsible for succession planning in order to ensure its continuance. Planning for the eventual replacement of staff due to retirements, alternate employment, or other reasons is the responsibility of the governing body.

Finally, the Council is responsible for the regular performance assessment of the Town, both in service effectiveness and staff performance.

Town Council delegates the level of responsibility and role to staff in some measure. What measure that is depends on the capability and quantity of staff resources. What is clear, however, is that staff should be given the responsibility to provide quality information on which Council bases its decisions.

In order for staff to accomplish that, several management processes must be in place in the Town:

 Management control processes  Financial management processes  Human resource management processes  Leadership and accountability processes  Administrative procedures  Management information systems  Strategic or business planning processes

In designing the most appropriate staff structure for the Town, these processes should be in place, or will be in place, so that Town Council will be assured that the operation and management of the Town is effective and provides the level of services that Town Council has identified.

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The final decision on any structure for the Town of Pictou should consider the future of the Town, not only the present staff and Council complement. A concern was raised in the Interim Report that sufficient resources are not being utilized in forming the future of the Town. The structure should champion the goal of the Town – to provide services to the taxpayers at an acceptable and affordable level.

It is a common belief that local government management practices and systems can operate much like the private sector in many ways. The Town Council can act as a Board of Directors, giving direction in the form of by-laws and policies, to management, who in turn look after the day to day affairs of the Town, on behalf of Council.

In return for this delegation of responsibility and authority, management is to provide information to Town Council to demonstrate its accountability to the Council and to the public.

Just as a Board of Directors and staff of a private sector business strive to attain the same goals, Council and staff of the Town of Pictou must strive to attain the same goals. Obviously, the private sector strives to maximize profits for the shareholders. Local government, on the other hand, strives to provide a voice for citizens and an affordable level of public services in an efficient and effective manner.

It is with these concepts in mind that the Town of Pictou should organize its system of governance and its administration functions.

Organizational relationships are vital for efficient delivery of services to the public. There must be an effective relationship among Councillors, among Councillors and management, among managers and staff, and among staff. All of these people are vital to the success of public service in local government. Trust, motivation, and communication are all criteria that will enhance the service to citizens of the Town.

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Town Council has a variety of options from which to choose when selecting the appropriate structure and system for the Town. The most effective options that are available to the town are discussed below:

• Council/Standing Committee system • Council/Committee of the Whole/Chief Administrative Officer system

6.2 Council/Standing Committee System

The Council/Standing Committee system implies that the bulk of decision-making will flow through standing committees of Council members prior to a final decision by Council. Each standing committee of Council is given certain prescribed responsibilities requiring the committee to make recommendations to Council as a whole, as to how certain matters might be discharged.

In this system, Council would normally not appoint a Chief Administrative Officer or Manager, nor delegate many responsibilities to staff. Rather, senior staff would play an advisory role to Committees, with the direct Council linkage being to the committee. Generally, the committee Chairman would present the reports to Council for consideration. Standing Committees would provide direct guidance to staff for the services under their control. A Clerk is employed to provide administrative support to the committees and Council. Figure 6.2 provides a sample organizational chart for this system.

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Figure 6.2 Council/Standing Committee System

Town Council

Town Clerk

Standing Boards & Legislated Committees Agencies Committees

Staff Staff responsible for responsible for Service Service

6.3 Council/Committee of the Whole/Chief Administrative Officer

This is the structure that is in place in the Town of Pictou, with the major exception that the Town Council acts as the CAO. Currently, the most senior staff position in the Town is the Town Clerk. This system is becoming more popular as Councillors have less time to devote to many municipal government issues, and elected officials need to be more informed on all aspects of the town’s operation. Under this system, standing committees are replaced by a committee of the whole Council, known as the Committee of the Whole (or in Pictou, Committee of Council), and all Councillors participate in discussions dealing with the entire town operation. It provides for an effective communication system and engages all Councillors in the debates regarding all policies and by-laws of the Town. Figure 6.3 provides a sample organizational chart for this system.

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Figure 6.3 Council/Committee of Council/Chief Administrative Officer System

Town Council

Chief Committee of Legislated Boards & Administrative Council Committee Agencies Officer

Staff

7 Recommended Structures

7.1 Council Structure

The proposed organizational structure framework included on Appendix 14.1 is based on a clear understanding and separation between the role of staff and the role of Councillors. The structure recognizes Town Council as the Board of Directors of the Town who are responsible to make policy decisions, make legislative decisions, and who are the strategic planners for the Town of Pictou. The provision of services, management of the operation, and the carrying out of the operations is clearly the role of staff, within the policies and bylaws set by the Town Council.

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In order to meet the generally accepted role of Town Council as planners and policy makers, a Council/Committee of Council/CAO structure should be put in place. The two required legislated committees must be put in place. Council Advisory Committees could be put in place to allow Council easy access to public opinion and public input into decisions of the Town Council that relate to consumer services.

Figure 7.1 is the recommended Town Council Structure. Appointments to external Boards, Commissions and Agencies are not included on this chart. In order for Town Councillors to be focused on the future direction of the Town, Council members need not be appointed to every external board that requests such an appointment, unless there is some town role in the appointment.

Figure 7.1 The Town of Pictou Recommended Town Council Structure

Town Council

Planning Police Committee of Audit Adviosry Advisory Council Committee Committee Committee

Pictou Waterfront Pictou Recreation Development Business Tourism & Committee Committee Culture Committee

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7.2 Staff Structure In order to meet the generally accepted role of staff, that is, to implement Council policies and decisions, a staff organizational chart has been recommended to Council in a separate, confidential report due to the sensitive nature of this recommendation.

7.3 The Committee of Council

The Terms of Reference of the Committee of Council should be: (for more clarity see Appendix 14.5)

 To act as a forum for presentation of reports and recommendations from department heads.

 To discuss and assess reports and make recommendations to Town Council about all public services.

 To act as the budget committee, recommending the final budget to Council.

The Committee should meet at least once per month and at least two weeks prior to the monthly Council meeting. Staff resources would be the CAO and other staff as delegated by the CAO.

7.4 Council Advisory Committees

It is intended that Council may have advisory committees operating at different times, depending on the issues confronting the Council. Such committees would have the following terms of reference:

• To study any issue delegated formally by Council to the committees and present recommendations regarding the issue to Council.

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• The committees should meet as required, or at the call of the Chair. Staff resources would be delegated by the CAO.

• The committees, with the exception of the legislated advisory committee for Planning, Police Services and Audit, will have a stated life expectancy and will end when the specific work allocated to it is completed.

7.5 The Chief Administrative Officer (CAO)

The role of the CAO is one of the keys to an efficient town operation. Notwithstanding the power of council to make decisions, the ability of a CAO to provide guidance to the council and to manage the affairs of the town is critical to the success of the Town.

The relevant sections of the Municipal Government Act as it pertains to the role of a Chief Administrative Officer are Sections 28 – 41 (see Appendix 14.2).

The CAO provides two important functions within a town:

 The CAO plays a policy advisory role to council and committees. If council is to have all the information it needs to make a decision, the CAO should be charged with providing the information and should be authorized to use the necessary resources to obtain the advice.

 It is a management, or administrative function where staff receives their direction from a person schooled in management and public administration. CAO decisions are made on a professional basis, and are not biased by the political arena. The day- to-day functions are covered in a council-approved Terms of Reference for the CAO.

A CAO structure can be expected to produce the following benefits for the Town:

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 Strong policy advice to assist Council in decision making

 A staff team mindset that can produce a culture of teamwork, use of common tools, and an atmosphere of working toward common goals.

 Strong fiscal management to ensure that council and departments are receiving efficient financial information on which to make decisions.

 Positive human resource management, as a result of professional training, so that staff are motivated and trained, and so that effective human resource policies are designed for the operation.

 An unfragmented organization which should provide a high level of confidence for Council and the public.

The CAO, as a key representative of Town Council, must have a positive relationship with a number of stakeholders, including the Mayor and Council, staff, the public and other governments with which the Town associates. (See Appendix 14.6 for Terms of Reference for CAO.)

8. Inter-municipal Agreements:

8.1 Current Agreements

There are a number of initiatives and municipal services in which the Town of Pictou participates with the adjacent municipalities:

Regional Emergency Measures Organization This agreement includes all municipal units in Pictou County and provides an excellent example of regional cooperation. The agreement lays out the protocol in responding and managing an emergency defined by the municipal units.

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Solid waste/resource management This agreement of all municipalities gives the responsibility of solid waste/resource recycling/collection/disposal to the Pictou County District Planning Commission.

Fire Inspection Service The Towns of Trenton, Stellarton, Pictou and the Municipality of Pictou have a joint services agreement to provide this service with a contractor.

Planning and Development Services The Pictou County District Planning Commission provides land use planning and development administration services to all municipalities in Pictou County. The County is not a member of the Commission.

Fire service: The volunteer fire departments in Pictou County provide reciprocal fire service to all areas within the County through a formal mutual aid agreement.

Library Services: The Town is a member of the Pictou-Guysborough Regional Library Board that provides library services to the Town.

Pictou Regional Development Authority The Town is a member of the Authority which coordinates the economic development for Pictou County, providing services to the Town such as development of strategic plans and other special projects relating to regional economic development.

Other informal cost-sharing arrangement The Municipality of Pictou provides financial assistance to the arena, and other recreation services provided in the Town.

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8.2 Conclusion

The Town has been very successful in developing a number of regional inter- municipal agreements for some significant services. Agreements for services such as solid waste/resource management, land use planning, fire service mutual aid, and the latest regional cooperation initiative, emergency disaster planning, are very significant success stories, as compared to other areas of Nova Scotia.

It would be appropriate for senior staff of all six municipal units in Pictou County to develop an inventory of all services delivered by the units that have some potential for “sharing”. It is not recommended to undertake this review unless managers and elected officials of all units express the sincere wish that more services will be shared in some way.

Some typical services that could warrant investigation are: accounting, payroll, tax and water billing and collections, by-law enforcement, water utility, waste water operations (especially with the current discussions with the Municipality of Pictou re a new treatment plant), and recreation programs/facilities.

9. Municipal Indicators

Municipal indicators are useful measures to determine how a municipal unit compares with other municipalities in Nova Scotia on various aspects of municipal operations and financial status. The following indicators were calculated for the Town of Pictou and compared with the five Towns of , Springhill, Stellarton, Trenton, Windsor and who are of comparable size in population (see Appendix 14.10). All indicators are based on 2005/06 data. The 2005/06 taxation data for the Town’s of Trenton and Stellarton were not available for the calculation of Residential taxes per dwelling unit.

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Population Indicator - 2001

6,000

5,000 4,809

4,091 3,875 4,000 3,778 3,658 3,701

3,000 2,798 Population

2,000

1,000

- Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

Percentage Change in Population 1991 – 2001

6.0% 5.3%

4.2% 4.0%

2.0%

0.0% Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton

-2.0% % Change %

-4.0%

-5.4% -6.0%

-6.3% -6.4%

-7.3% -8.0% -8.2%

-10.0% Municipal Unit

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Residential Tax Rates for 2006/07

2.50

$2.22 $2.12

$1.99 $2.00 2.00

$1.80 $1.82

$1.49 1.50

1.00 Residential Tax Rate Tax Residential

0.50

0.00 Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

The Town has the second highest tax rate of all Towns in Nova Scotia. Only the Town of Canso, with a residential tax rate of $2.30 is higher. Commercial Tax Rates for 2006/07

6

$5.49

$5.09 5

$4.28

4 $3.74 $3.59 $3.55 $3.26

3 Commercial Tax Rate Tax Commercial

2

1

0 Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

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The Town of Pictou has the fourth highest commercial tax rate of all Towns in Nova Scotia. Only the Towns of Trenton ($5.49), Springhill (5.09) and ($4.53) have higher commercial tax rates.

Total 2005/06 Operating Budget Per Capita

6,000

$4,809 5,000

$4,091 $3,778 4,000 $3,658 $3,701

3,000

2,000 Operating Budget Capita per $1,439 $1,182

1,000

- Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

This municipal indicator calculates the cost per person of delivering municipal services on an annual basis. The Town of Pictou has the lowest operating costs per person of the seven towns surveyed.

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Residential Taxes per Dwelling Unit

2005/06

1600

$1,394 1400

$1,253 $1,158 $1,142 1200

$988 1000 $937 $851

800

600 Residential Taxes per DwellingperTaxes Unit Residential 400

200

0 Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

The Residential Tax Burden indicator shows the average cost, to each dwelling unit, of the municipal government services being provided. When comparing municipalities, it is a more accurate reflection of residential property taxes than the individual tax rates. A high residential tax burden may indicate that a municipality is reaching a ceiling on tax rates. A low residential tax burden may indicate that a municipality has a relatively large commercial tax base to share the tax burden. While this indicator provides information on the cost of municipal government services per dwelling unit, care must be taken in that municipalities with user charges for some municipal services (ie. garbage collection, sewer services, etc.) will tend to have lower ratios than municipalities that fund all services through tax revenue.

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Uniform Assessment per Dwelling Unit 2005/06

140,000

$115,567 120,000 $109,509

100,000 $92,840

$84,841 $76,263 80,000

$68,219 $63,627

60,000 UA per Dwellingper UAUnit

40,000

20,000

- Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Unit

This indicator provides broad information on a municipality’s ability to fund municipal services. A high Uniform Assessment per Dwelling Unit may indicate that the municipality is relatively well off compared to other municipalities to fund the municipal services. The Town of Pictou has the second lowest UA per Dwelling Unit ratio of the five Towns included in this comparative analysis.

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10. Financial Condition of the Town

10.1 Current Financial Issues

There are a number of key indicators that are considered when measuring a municipality’s financial health. Upon reviewing the Town’s Financial Statements for the past number of years the following indicators are presented as part of this report:

 Cash Balances, Liquidity and Accounts Receivable Balances  Reserves and Inter-fund Loans  Outstanding Long Term Debt and Debt Capacity  Operating Surplus  Financial Management Issues

10.2 Cash Balances, Liquidity & Accounts Receivable

The Town’s General Operating Fund and Water Utility combined bank indebtedness at March 31, 2006 was $943,739, which is an increase of $386,506 from March 31, 2004. This significant cash shortfall is due primarily to the 2005/06 operating deficit of the Town that has yet to be funded, an increase in the amount of actual Taxes Receivable (see below) and the need for increased water rates which have been approved for a phased-in implementation effective October 1, 2005, April 1, 2006 and April 1, 2007.

Due to the lack of cash resources the Town is experiencing a higher than normal level of short term borrowing costs and is withholding payments of accounts payable.

The liquidity ratio is used to measure a municipality’s short term ability to meet its current obligations. It is calculated by dividing short-term operating assets by short- term operating liabilities. As of March 31, 2006 the Town’s liquidity was 0.76 which indicates the Town is not able to fund its current obligations. At the very minimum a

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municipality’s liquidity ratio should be no less than 1.0. The average liquidity ratio for all Towns in Nova Scotia in 2003 was 1.28. It is important to ensure collections of money owing to the Town are done in a timely manner to ensure good cash management and the ability to pay accounts payable to take advantage of available supplier discounts and to prevent late-payment penalty charges. As of March 31, 2006 the Town had collected 86% of taxes owing in that year. The average for all Towns in Nova Scotia in 2003 was 92%.

Of special note is the change in the Valuation Allowance for Uncollectible Taxes. While the net amount of Taxes Receivable has decreased from 2005 to 2006, it is not due to increased collections but rather an increase in the amount of taxes deemed uncollectible. The Valuation Allowance for Uncollectible Taxes increased by over $42,000 from 2004 to 2006. The amount of actual Taxes Receivable before the Valuation Allowance is taken into consideration increased by 42% from $307,376 in 2004 to $449,875 in 2006.

10.3 Reserves and Inter-fund Loans

Municipalities are mandated, through provincial Financial Accounting and Reporting regulations, to apply the accounting principles and practices of Fund Accounting. This means that municipalities are required to maintain a number of independent and self-balancing funds for various aspects of their operations. The most common funds are a General Operating Fund for day-to-day operations, a Capital Fund for the acquisition and disposal of capital assets and several Special Reserve Funds (Operating Reserve, Capital Reserve, Equipment Reserve, etc.) for saving money for special purposes. The Town of Pictou utilizes a Capital Reserve Fund in addition to its General Operating Fund and Capital Fund.

A municipality is permitted to make transfers to and from its reserves for permitted uses. The Town currently has $1,012,793 in outstanding inter-fund loans between its Special Capital Reserve, Capital Fund and General Operating Fund. The vast

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majority of these loans are one to twelve years overdue. We understand there is no intention to repay these loans which impacts on the annual operating budget and year end Financial Statements by overstating the Town’s actual operating revenues and expenses. Further, the Town’s Capital Reserve Fund Balance at March 31, 2006 is overstated and instead of having $1,021,485 in Reserves the Town actually only has $87,011.

Reserves are an effective tool to fund future capital expenditures. Through the development and implementation of a Capital Improvement Plan, discussed more fully later in the report, municipalities are able to financially plan long term to maximize investment interest and minimize debt costs. The provincial average in 2003 of Reserve Balances as a percentage of total Operating Expenditures for Towns in Nova Scotia was 23%. The ratio for the Town of Pictou at March 31, 2006 was less than 1%. It is .02%.

10.4 Outstanding Long Term Debt and Debt Capacity

The Town of Pictou has capital assets of $16.7 million and long term debt commitments of $1.2 million.

The indicator used by the Province of Nova Scotia in approving requests for long term funding for capital assets is the Debt Service Ratio. This is calculated by dividing the municipality’s annual debt charges by its own source revenue (revenue based on the taxes and rates set by the municipality). Any requests for borrowing that do not increase a municipality’s debt service ratio above 10% will be approved by the Minister of Service Nova Scotia and Municipal Relations. Borrowing requests that will result in a debt service ratio between 10% and 15% will require a debt affordability analysis be carried out by the municipality. The debt service ratio for the Town of Pictou as of March 31, 2007 is 5.83% which indicates the Town is well within the desired range set by the Province.

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The Town currently has three major capital acquisitions that are proposed to be funded by borrowings from the Municipal Finance Corporation. They include $100,000 for the DeCoste Centre upgrades; $225,000 for a new Fire Truck and $2.1 million for the construction of a sewage treatment plant. When the debt charges associated with these borrowings are factored in, the Town’s debt service ratio will increase to 10.9% in 2008/09.

A preliminary inventory of all the Town’s buildings and equipment was carried out by senior managers as part of the financial analysis of the Town. The need for replacements or upgrades is $765,350 is required over the next three years. The funding for these capital expenditures was not factored into the debt service ratio projections noted above. An inventory and assessment of the Town’s street, sidewalk and sewer infrastructure was not done but indications are that there are deficiencies in these that will require capital investments in the near future.

The following graphs provide a comparison of the Debt Service Ratio and Ration of Debt Outstanding to Uniform Assessment for the Town of Pictou against the other municipal units included in the Comparative Data Analysis. (See Appendix 14.10 for more detail).

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2002/03 Debt Service Ratio

14.0% 13.0%

12.0%

10.0% 9.5%

8.0% 6.8%

5.8% 6.0% 5.1% Debt Service Ratio DebtService 4.8%

4.0% 3.2%

2.0%

0.0% Pictou Trenton Wolfville Port Windsor Springhill Stellarton Hawkesbury Municipal Unit

The Debt Service Ratio indicates the amount of the current operating expenditures incurred for debt servicing and therefore not available for other services. Caution must be exercised when evaluating this financial indicator. A high debt service ratio may indicate a municipality that has taken on too much debt, or it may also indicate that the municipality has taken an aggressive approach to debt repayment and is paying down their debt quickly to avoid interest costs. Similarly, a low debt service ratio could indicate a municipality is strong financially and can finance most capital projects through their operating budget. It may also indicate that a municipality is financially weaker and has deferred capital projects allowing important infrastructure to deteriorate.

The fact that the Town has a good debt service ratio and is within the province’s acceptable range does not negate the need and importance for long term capital and debt management plans and policies. The importance of planning financially for

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capital projects and municipal infrastructure is critical to maintaining an affordable tax rate.

The following graph shows the impact on the Town’s debt service ratio of the three borrowings to be made from the Municipal Finance Corporation notes above for the DeCoste Centre, Fire Truck and Sewage Treatment Plant.

Committed and Proposed Debt Service Ratio 2007 - 2017

12.00%

10.00% Proposed Debt Service Ratio

8.00%

6.00% Current Debt Service Ratio Debt Service Ratio Service Debt 4.00%

2.00%

0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year

The additional debt charges associated with these three long term borrowings will increase the Town’s debt service ratio above 10% in the years 2009 to 2011.

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Ratio of Outstanding Debt to Uniform Assessment (2002/03)

2.5%

2.2%

2.0% 2.0%

1.5%

1.3%

1.0% Outstanding toDebt UA

0.6% 0.6% 0.5% 0.5% 0.4%

0.0% Pictou Trenton Wolfville Port Hawkesbury Windsor Springhill Stellarton Municipal Units

The Ratio of Outstanding Debt to Uniform Assessment indicator measures the level of total outstanding long term debt as a percentage of a municipality’s ability to pay. The Town of Pictou has the highest percentage of outstanding debt to Uniform Assessment indicating a limitation on the Town’s ability to fund any more debt costs without increases to the tax rate or identifying additional sources of revenue.

10.5 Operating Surplus

In each of the last two fiscal years the Town of Pictou has experienced an operating deficit. The operating deficit as of March 31, 2005 was cushioned by an $11,000 transfer from Operating Surplus. The operating deficit for the year ended March 31, 2006 totaling $210,616 was not included in the 2006/07 Operating Budget with special permission from the Minister of Service Nova Scotia and Municipal Relations that it be deferred and funded 50% per year in 2007/08 and 50% in 2008/09.

A financially healthy municipality will maintain a level of Operating Surplus to ensure cash is available for timely payment of payables. In other words, Operating

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Surplus is the municipality’s working capital. There is not any specific industry standard on what the appropriate level of Operating Surplus should be, however we would recommend a minimum of three month’s payables or 20% to 25% of the annual operating budget. Based on the Town’s 2006/07 Operating Budget of $4.7 million, working capital of $950,000 would be appropriate.

10.6 Financial Management Issues

There are a series of financial management policies and practices that should be in place in the Town to ensure Council’s fiduciary responsibilities are being met. At the very minimum these would include:  Timely and transparent processes for the preparation of the annual Operating and Capital budgets  Accurate and timely interim financial reporting to Council and Departments  Cash management policies to ensure effective use of the Town’s cash resources  Timely Taxes Receivable collection system  Capital Improvement Planning  Debt Management Policies  Current and effective financial systems for day-to-day operations

Based on discussions with Town officials there does not appear to be a formal budget process in place that is open and transparent to the public. Rather, the annual operating budget is prepared by the Town Clerk with some input from department heads and then taken to Council for approval. The public only become part of the process at the final approval stage. Further, the annual operating budget typically is not approved until July or August which is four or five months into the fiscal year.

The Capital Budget is prepared for only one year at a time and is based on what is affordable to be funded by the tax rate. There is no long term planning for the Town’s capital needs. This is discussed further under the topic of Capital Improvement Planning.

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Interim financial reporting to Council and Department Heads is very weak. When any reporting is done, it is simply a printout of the revenue and expenditures from the accounting system used by the Town lacking any analysis or year end projections. The Departmental budgets are not jointly reviewed by the Town Clerk and respective Department Heads on a monthly basis. Further, the accounting required to keep all Town General Ledger accounts up-to-date is not being done on a monthly basis. This results in meaningless financial reports, when they are produced, and the requirement for a significant amount of work at year end in preparation for the audit.

The Town does not have any formal cash management policies. Due to the cash shortfalls being experienced by the Town and its Water Utility, the only real cash management practice is staff may withhold vender payments in an effort to minimize bank indebtedness costs.

The Municipal Government Act states that any real property tax account that is two years in arrears must be put up for Tax Sale to recover the overdue taxes. The Town lacks a written Tax Sale Procedure to enable compliance with this legislative requirement which has resulted in inconsistent efforts toward the collection of taxes that are more than two years in arrears. This is partially reflected by the Town’s large increase of 42% in outstanding taxes.

The Town of Pictou does not have a Capital Improvement Planning process, nor does it prepare a three-year capital budget on an annual basis as part of its financial management practices. This type of planning is an absolute necessity to ensuring the long-term management and affordability of the Town’s assets and infrastructure.

A Capital Improvement Plan includes an inventory of all the Town’s assets and infrastructure ranging form streets to dump trucks to office computers to park and playground equipment. Every asset is asses as to its current condition and useful life

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to determine when it will need to be replaced and at what cost. As well, expansion of Town assets is considered noting the year and cost the expansion is anticipated to be required.

With this information, an eight to ten year plan is prepared which identifies the capital costs expected in each year of the plan. Through the use of debt financing, transfers to and from Reserves and Operating Revenues, the annual capital costs are funded in a manner that ensures an equal contribution in each year. This minimizes fluctuations in the tax rate and ensures the financial resources are available when needed. As previously noted, the Town has approximately $765,350 in capital equipment upgrades and acquisitions in the next three years for which no financial plan is in place.

Discussions with senior managers about the Town’s financial systems indicate these are very informal and based on practices that have not evolved over the years. This has limited the appreciation and identification of the need for more current systems and technologies. As a result, workloads tend to become “bottle-necked” and more than necessary time and effort is required to perform day-to-day operations. There is a need to review the Town’s financial systems to find opportunities to streamline tasks, identify technologies that will enable more efficiency and free up staff time for important tasks that are currently not being performed.

10.7 Future Financial Capacity ~ Three Year Operating Forecast

In assessing the future financial capacity of the Town of Pictou, a three-year operating forecast was prepared (see Appendix 14.11). The forecast for 2007 was based on actual to date expenditures at January 31, 2007 and interviews with senior managers. The forecasts for the next two years were prepared based on the following general assumptions.

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Taxation Revenue In 2008 the Maritime Oddfellows Home, which has had tax exempt status under provincial legislation, and which paid a grant in lieu of taxes of $10,000 for the past 25 years, will become taxable. At the same time, the Town’s taxable assessment is being impacted by a 20% per year decrease in Business Occupancy assessments. For the purposes of preparing the three year operating forecast, the assessment of the Maritime Oddfellows Home has been added as taxable beginning in 2008, the remaining residential, resource and commercial taxable assessments have been increased by 2% per year and the lost revenue from the decrease in Business Occupancy assessments is recovered through the commercial tax rate.

Further under taxation revenue, it has been assumed all new costs associated with the construction and operation of the proposed sewer treatment facility will be recovered 100% through a sewer levy. Finally, it has been assumed there will be no increase in non-taxable assessments for Aliant, Nova Scotia Power or the HST Rebate.

Equalization Grant The addition of the Maritime Oddfellows Home as taxable assessment on the Town’s assessment roll will increase Town’s uniform assessment. Since the Equalization Grant formula used to calculate payments to municipalities in the province is based on the total uniform assessment of all municipalities, it is not possible to calculate the direct impact on Pictou of the Maritime Oddfellows Home becoming taxable as it relates to the Equalization Grant. For the purposes of the operating forecast for this study it has been assumed the Equalization Grant will increase by 1% in 2008 and not all in 2009.

Other Operating Revenues It has been assumed that all other operating revenues will increase by 2% per year.

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Operating Expenditures For the most part it has been assumed there will be no increase in the level of services provided to taxpayers, nor changes in the way these services are delivered, over the next two years with the exception of a new sewer treatment facility in 2009. It has been assumed that day-to-day operating costs will increase by 3% per year for 2008 and 2009. As mentioned above, the 2007 forecast for operating expenditures was based on actual to date expenditures at January 31, 2007 and interviews with senior managers. The forecast for Environmental Health Services for 2009 includes the projected operating costs of the new sewer treatment plant.

Fiscal Services Fiscal Services is the section of the Operating Budget that deals with debt charges, capital purchases paid out of tax revenue, transfers to reserves and mandatory contributions to other governments (i.e. Education, Corrections, Public Housing, Assessment Services, Regional Library, etc.) For the purposes of the three-year operating forecast, debt charges have been included based on actual current debt outstanding plus proposed debt charges associated with the Municipal Finance Corporation borrowings for the DeCoste Centre, Fire Truck and sewer treatment plant. The debt charges for the fire truck have been offset by annual contributions from the Fire Department and the community through donations.

Further, the amount of the Town’s $210,616 operating deficit has been included under the forecast for Fiscal Services at a rate of 50% per year, or $105,308, in each year for 2008 and 2009.

The amount of Capital expenditures out of Revenue in each of the last two years of the forecast do not include any increase over the amount budgeted for 2007. The forecast for the three years for capital expenditures totals $406,200 compared to the need of $765,350 identified by senior management.

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The results of the operating forecast indicate the Town will experience a deficit in the current year of $30,000. The forecasts for 2008 and 2009 also predict deficits of $185,886 and $394,006 respectively.

To eliminate the forecasted deficits in 2007/08 and 2008/09, the Town’s Residential and Commercial tax rates would have to increase as follows:

2006/07 2007/08 2008/09 Current Tax % Tax % Tax Rate Rate Increase Rate Increase Residential $2.22 $2.38 7.2% $2.56 7.6% Commercial $4.28 $4.47 4.4% $4.675 4.6%

10.8 Conclusion

Based on the three-year financial forecast contained in Appendix 14.11, the Town of Pictou is not financially viable in the future unless 1) taxpayers are prepared to absorb tax rates required on above, or 2) drastic expenditure reductions can be achieved, or 3) new sources of revenue can be found, or 4) a combination of these three initiatives.

Forecasted residential tax rates will have to increase by approximately 15% over the next two years. For example, on a house assessed at $80,000, taxes will increase by approximately $128 in 2007/08 and $144 in 2008/09 for a total increase of $272 over the two year period.

Forecasted taxes paid by businesses will have to increase by approximately 9% over the next two years. For example, a business assessed at $250,000 will see taxes increase by approximately $475 in 2007/08 and $513 in 2008/09 for a total increase of $988 over the two year period.

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Just as drastic as the impact of these projected tax rates, is the cash deficit of the Town. Simply, from a cash point of view, the Town cannot withstand such a deficit that would result from these forecasts.

Based on the forecast, the Town could not afford to expend funds for capital improvements or further capital infrastructure. Although the debt ratios would be within the rate deemed to be acceptable by Service Nova Scotia and Municipal Relations, the repayment would not be possible.

In addition, the Town would not be able to set aside reserves for future capital and operating needs of the Town.

11 Future Corporate Planning

There are appropriate times when an organization has the opportunity to begin a process of identifying and taking control of its future. In the Town of Pictou the need to determine a future, the financial deficits in 2005/06 coupled with projected deficits in 2007-2009, the development of major waste water treatment facilities, and the retirement of a long-time experienced Town Clerk, are indications of the need for longer term business planning for the town corporation. Changes in the fiscal relationship between the municipal and provincial governments in Nova Scotia support the need for the Town to be pro active in planning for the future for its citizens. It is recommended that Town Council begin a process of identifying the future position of the Town, and specific actions to achieve that position.

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Council and staff must be working towards the same goals and objectives. However, “if you do not know where you are goin g, how you get there does not matter.” These changes are sufficient for Council to consider undertaking a long range

planning exercise for the corporation, and the Town as a whole.

12 Final Report Communication Plan

The recommendations contained in this report are of interest to several stakeholders, including the taxpayer, staff, and Service Nova Scotia and Municipal Relations. A communication plan is required to provide the contents of the report to those stakeholders.

A communication plan should include the following components:

A description of the audience The parties to whom the Town wishes to communicate should include staff, the public, and Service Nova Scotia and Municipal Relations.

The objective of the communication : The Town, as a public body representing the interests of the community, wants to communicate a message to this audience to inform the parties of the reason and the results of the external organization study in the Town of Pictou.

What message does the Town want to provide to the audience : The Town should indicate that an organization study has been completed by an independent consultant, resulting in recommended improvements to assist Town Council in preparing for the future and to enhance its decision making practices. The study also

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A contact person for inquiries The stakeholders and other persons may wish to gather further information about the message, or may wish to comment on the message. It is important that the message and information be consistent. Therefore, it is recommended that a single elected person such as the Mayor be the contact person for this report.

13 Implementation Plan Appendix 14.9 includes an implementation plan to implement the recommendations contained in this report in a reason timeframe.

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14.1 Organizational Framework Model

TOWN OF ABC

ORGANIZATIONAL STRUCTURE FRAMEWORK

Management Information Systems Management Control Service Levels Decision Making

Strategic Planning

Financial Systems

ADMINISTRATIVE STRUCTURE GOVERNANCE STRUCTURE TEAM

Leadership

Legislation

Human Resource Systems Administrative Procedures Policy/By-Laws Committees Town of Pictou – Organization Study ______

14.2 Relevant Section of Municipal Government Act re CAO

MUNICIPAL GOVERNMENT ACT

EXCERPTS RE CHIEF ADMINISTRATIVE OFFICER

28 (1) Subject to subsection (2), the council may employ a person to be the chief administrative officer for the municipality.

(2) The council of a regional municipality shall employ a person to be the chief administrative officer for the regional municipality.

29 Where the council does not appoint a chief administrative officer, the council (a) shall fulfil the responsibilities, and may exercise the powers, given to the chief administrative officer by this Act; and (b) may delegate any of the responsibilities and powers of the chief administrative officer to an employee of the municipality.

30 (1) The chief administrative officer is the head of the administrative branch of the government of the municipality and is responsible to the council for the proper administration of the affairs of the municipality in accordance with the by-laws of the municipality and the policies adopted by the council.

(2) The council shall communicate with the employees of the municipality solely through the chief administrative officer, except that the council may communicate directly with employees of the municipality to obtain or provide information.

(3) The council shall provide direction on the administration, plans, policies and programs of the municipality to the chief administrative officer.

(4) No council member, committee or member of a committee established by the council shall instruct or give direction to, either publicly or privately, an employee of the municipality.

31 (1) The chief administrative officer shall (a) coordinate and direct the preparation of plans and programs to be submitted to the council for the construction, rehabilitation and maintenance of all municipal property and facilities; (b) ensure that the annual budget is prepared and submitted to the council; © be responsible for the administration of the budget after adoption; (d) study the drafts of all proposed by-laws and policies and make recommendations to the council with respect to them; (e) carry out such additional duties and exercise such additional responsibilities as the council may, from time to time, direct.

(2) The chief administrative officer may (a) attend all meetings of the council and any board, committee, commission or corporation of the municipality and make observations and suggestions on any subject under discussion; (b) appoint, suspend and remove all employees of the municipality, with power to further delegate this authority; (c) act, or appoint a person to act, as bargaining agent for the municipality in the negotiation of contracts between the municipality and any trade union or employee association and recommend to the council agreements with respect to them; (d) subject to policies adopted by the council (i) make or authorize expenditures, and enter into contracts on behalf of the municipality, for anything required for the municipality where the amount of the expenditure is budgeted or within the amount determined by the council by policy, and may delegate this authority to employees of the municipality,

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(ii) sell personal property belonging to the municipality that, in the opinion of the chief administrative officer, is obsolete, unsuitable for use, surplus to requirements of, or no longer needed by, the municipality, and may delegate this authority to employees of the municipality, (iii) personally, or by an agent, negotiate and execute leases of real property owned by the municipality that are for a term not exceeding one year, including renewals, (iv) establish departments of the municipal administration, (v) adopt a system of classification of positions of municipal officers and employees and specify offices that may not be filled by the same person, (vi) determine the salaries, wages and emoluments to be paid to municipal officers and employees, including payment pursuant to a classification system, (vii) where not otherwise provided for, fix the amount in which security is to be given by municipal officers and employees, the form of security, the manner in which security is to be given and approved and the nature of the security to be given; (e) authorize, in the name of the municipality, the commencement or defense of a legal action or proceedings before a court, board or tribunal, including reporting the commencement of the legal action, defense or proceeding to the council at the next meeting and may, if the council so provides by policy, delegate this authority to employees of the municipality; (f) where the council so provides by policy, settle a legal action or proceeding in accordance with the policy.

(3) A lease executed by the chief administrative officer is as binding on the municipality as if it had been specifically authorized by the council and executed by the mayor or warden and clerk on behalf of the municipality.

(4) Notwithstanding subsections 33(1), 37(1), 39(1) and Section 41, the chief administrative officer may, with the consent of council, perform the duties of the clerk, treasurer, engineer and administrator, or any of them, pursuant to this Act.

(5) The chief administrative officer may from time to time appoint an employee of the municipality to act in the place of the chief administrative officer when the chief administrative officer is absent or unable to act.

32 (1) The directors of departments of the municipality (a ) are accountable to the chief administrative officer for the performance of their duties; and (b) shall submit the reports and recommendations required of them to, and through, the chief administrative officer.

(2) A report or recommendation from the solicitor of the municipality shall be presented to the council by the solicitor and the chief administrative officer shall be informed of the contents in advance of the presentation to council, unless the report or recommendation is with respect to the chief administrative officer.

(3) Where a director of a department of the municipality disagrees with a recommendation of the chief administrative officer, the objections may be provided to the chief administrative officer who shall present them to the council.

33 (1) The chief administrative officer shall designate an employee of the municipality to perform the duties of the clerk of the municipality.

(2) The clerk shall (a) record in a minute book all the proceedings of the council; (b) account for the attendance of each council member at every meeting of the council; (c) keep the by-laws and policies of the municipality; and (d) perform such other duties as are prescribed by the chief administrative officer, the council or an enactment.

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34 (1) The council may adopt a policy for the management and destruction of records.

(2) Records that are required by an enactment to be kept and minutes, by-laws, policies and resolutions of the council shall not be destroyed.

(3) The council may, by policy, specify further classes of records that are not to be destroyed or that are to be kept for specified time periods.

(4) Where (a) a municipal record is destroyed; or (b) an original municipal record is not produced in court, and © the clerk certifies that a reproduction is part of the records of the municipality and is a true reproduction of the original municipal record, a photographic, photostatic or electronic reproduction of the record is admissible in evidence to the same extent as the original municipal record and is, in the absence of proof to the contrary, proof of the record.

35 Where, in an action or proceeding it is necessary to prove the authority of an employee of a municipality, a certificate under the hand of the clerk and the seal of the municipality stating that the employee has the authority is sufficient proof, without proof of the signature of the clerk or of the seal.

36 A clerk who willfully gives a false certificate is liable, on conviction, to a penalty not exceeding ten thousand dollars and, in default of payment, to imprisonment for a period of not more than one hundred and eighty days.

37 (1) The chief administrative officer shall designate an employee of the municipality to perform the duties of the treasurer of the municipality.

(2) The treasurer may delegate any of the powers or duties of the treasurer pursuant to this or any other Act of the Legislature to an employee of the municipality.

38 The treasurer shall promptly advise the council of (a) all moneys due to the municipality that the treasurer considers cannot reasonably be collected after pursuing all reasonable avenues of collection; and (b) the reasons for the belief that such moneys cannot be collected, and the council may write off the amounts determined to be uncollectible.

39 (1) The chief administrative officer shall designate an employee of the municipality to be the engineer for the municipality.

(2) Where the engineer has authority to require that action be taken by a person, the engineer may direct that the action be taken.

(3) A person shall not refuse or fail to take action when directed to do so by the engineer.

(4) Where the engineer directs that action be taken and no action is taken, the engineer may cause the necessary work to be done.

(5) The engineer may enter in or upon a property at (a) a reasonable hour upon reasonable notice to the owner and any occupier of the property; or (b) any time in the event of an emergency, for the purpose of inspection, observation, measurement, sampling, testing or work to be done in accordance with this Act or a by-law made pursuant to this Act. 40 (1) Where approval or permission by the engineer is required pursuant to this Act, the engineers decision to refuse the approval or permission may be appealed to the (a) council; or

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(b) where there is a committee designated by the council, by policy, to hear appeals, that committee.

(2) On an appeal pursuant to subsection (1), the council or the designated committee, as the case may be, shall (a) direct the engineer to grant the approval or permission; or (b) uphold the decision of the engineer.

(3) The right of appeal pursuant to this Section expires fourteen days after the engineer serves a written decision regarding the approval or permission on the owner.

41 The chief administrative officer shall designate an employee of the municipality to be the administrator responsible for the dangerous and unsightly premises provisions of this Act.

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14.3 Recommended Procurement of Goods and Services Policy

Effective Date:

POLICY

It is the policy of The Town of Pictou to acquire goods and services on a competitive basis and to ensure uniformity of rules and procedures in the purchasing of goods and services.

PURCHASING AUTHORITY

♦ The CAO, Accountant, Director of Community Development Services, and the Superintendent of Public Works and Utilities of The Town of Pictou shall be the responsible authorities for the purchase of goods and services for The Town of Pictou subject to the policy and procedure herein.

♦ It shall be the responsibility of the CAO to ensure that purchases of goods and services are carried out in accordance with this policy.

♦ Approval of the Town Council will be required to purchase goods and services that exceed a value of $5,000.

♦ The CAO is authorized to make contracts for the acquisition of goods and services for the purpose of carrying on the business of the Town, where the amount of the expenditure does not exceed $5,000, in any one case, and where such expenditure is included in the approved budget allocation.

♦ The Accountant, Director of Community Development Services, and Superintendent of Public Works and Utilities are authorized to make contracts for the acquisition of goods and services for the purpose of carrying on the business of the Departments, where the amount of the expenditure does not exceed the sum of $2,500, in any one case, and where such expenditure has been included in the approved budget allocation.

♦ Where it is operationally feasible, those persons may identify other employees who should have purchasing authority. In those cases, the Department Head shall forward a written request to the CAO identifying the employee and the recommended amount of the authority. The CAO shall respond to the request and provide a copy for the accounting staff.

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GENERAL

♦ Procurement of goods and services shall generally be undertaken through a competitive bid process in either of two ways, depending on the dollar value:

1) Bid by invitation 2) Public tender

♦ The CAO shall encourage the consolidation and standardization of items used within the departments.

♦ Under the direction of the CAO, purchasing authorities shall endeavor to combine the purchasing of common goods and services to achieve the most economical financial benefit to the Town. This may include cooperative purchases with other public sector agencies when it is deemed to be the most cost-efficient method of procurement.

♦ The Authority shall ensure that, wherever possible and economical, specifications are prepared to provide for the expanded use of products and services that contain the maximum level of post-consumer recyclable waste and/or recyclable content, without significantly affecting the intended use of the products or service.

♦ The Purchasing Authorities shall maintain a file system that records proof of verbal and written quotations and bids.

PURCHASE TOOLS

13.1.1 Purchase Order – The purchase order is the tool used to finalize the bid process for goods and services. The purchasing procedure begins with a Purchase Order being completed. It describes the items or service to be ordered, delivery date and the account to which the purchase will be allocated in the financial records.

The Department Heads shall then proceed to purchase the items, following the bid process as required in the policy. The Department Head shall sign the Purchase order.

THE BID PROCESS

1) Purchase Orders not required : There are a number of purchases of low value items made at local businesses that accumulate the purchases and submit a monthly statement to the Town for payment. A purchase order shall not be required for individual purchases less than $50 in value. However, the Department Heads shall study the monthly statements from the suppliers to verify price and receipt of goods.

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2) Informal purchasing Where the value of goods and services to be purchased is less than $500, in any one case, formal price comparisons are not required, although from time to time, some comparisons should be done to ensure that the Town is getting the best value for the dollar. Where the value of goods and services to be purchased is between $501 and $1,499, three verbal quotations will be sought.

3) Bid by Invitation Where the value of goods and services to be purchased exceeds $1,500 and less than $5,000, in any one case, bids will be solicited by invitation in written form.

4) Public Tender Where the value of goods and services to be purchased exceeds $5,000., in any one case, public tenders shall be solicited through public advertisement, in accordance with the “Procurement of Goods and Services” section of this Policy.

5) Emergency Acquisition Not withstanding the above, in the case of a pressing emergency, where the delay resulting from inviting tenders or bids would be injurious to the public interest and/or the Town’s assets, the CAO may approve the purchase and report it to the Council at the earliest date thereafter.

6) Purchase by auction : Where it has been identified by the Town that it may be feasible to purchase goods or services by auction, the prior approval of the Council is required.

PUBLIC TENDER PROCESS

1) SPECIFICATIONS : The Department Heads shall prepare specifications for the goods and services to be acquired by tender.

2) TENDER DOCUMENTS : Tender documents shall include the following: a) Form of “Instructions to bidders”, b) Form of “Tender”, c) Form of “Contract Agreement”, d) Form of “General Conditions”. e) Project drawings and/or specifications where required

The above documents shall include, at least, the closing date and time, the fact that all tenders must be in sealed envelopes clearly marked with the purpose of the tender.

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3) PRIVILEGE CLAUSE A statement shall be included in the advertisement that ”The Town reserves the right to reject any or all tenders, not necessarily accept the lowest tender, or to accept any tender which it may consider to be in its best interest. The Town also reserves the right to waive formality, informality or technicality in any tender.”

4) TENDER OPENINGS : All tenders solicited by the Town shall close on Thursday at 2:00 PM. All tenders shall be received by the Receptionist in the Town Hall, who shall stamp the time and date received on the envelope and place the tender in a Tender Box. No tenders shall be received by Fax. However, amendments to tenders will be accepted if the tendered price is not revealed in the fax. At the appointed time for opening, the Department Head, member of Town Council, and one other person selected by the Department Head, shall meet in the Town offices. The Department Head will bring the Tender Box (which has been sealed by the Receptionist at the hour of closing) to a selected room for public opening. The public is permitted to view the tender opening in that room.

The Department Head shall ensure that a recorder records the proceeds at the opening, including the names of those persons in attendance and the amounts of the bids.

Tenders received after the closing shall be returned unopened to the bidder.

5) TENDER AWARDING : It shall be customary to award the tender to the bidder of the lowest price meeting the specifications. The Town reserves the right to make an award for reasons deemed to be in its best interest. An award shall not be made in any circumstances to a firm that did not submit a bid on the original tender call.

All tenders valued at less than $5,000 shall be approved in accordance with the purchasing authorities stated in this policy (“Purchasing Authorities”.) A report to the CAO from the Department Head is required for all public tenders, recording the proceedings of the tender opening and the resulting awarding of the tender.

All tenders valued in excess of $5000 shall require a report from the Department Head, including a recommendation, to the Council. The Council shall consider the recommendation of the Department Head in making its decision.

In the event that all of the bids received exceed the budgeted appropriation, the Purchasing Authority shall do one of the following:

a) Cancel the project

b) Make an award to the lowest acceptable bidder based on the budget overrun, and the significance and priority of the proposed project.

c) Undertake negotiations in the scope of the work with the bidder submitting the lowest acceptable tender to reduce or alter the scope.

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6) PURCHASE ORDER/CONTRACT : After approval, a formal contract or a Purchase Order shall be prepared for the total amount of the goods and services which is to be signed by the appropriate authority, and the successful bidder.

CALL FOR PROPOSALS

1) When seeking professional services or goods that cannot be rigidly defined under Tender specifications, the purchasing authority shall prepare a Request for Proposal (RFP). The RFP shall generally describe the scope of work or goods entailed, and would invite written proposals from prospective suppliers which details the methodology to be utilized, the time frame for completion, and an estimated cost for completion of the outlined work. The purchasing authority may stipulate an amount for the services to enable a more fair evaluation of the proposals.

2) The selection of the successful bidder shall be based on consideration of a number of relative factors, and shall not be selected on the basis of price alone. The authority is then authorized to negotiate a final contract with the selected bidder. All final contracts valued in excess of $5,000 require the approval of Town Council.

SURPLUS MATERIAL

1) Goods, supplies and assets which are declared surplus by the Department Head shall be offered to other departments of the Town, or sold in the most effective manner to obtain the highest return, by Tender, auction, negotiation or quotation, in accordance with this Policy.

3) Employees and Councillors of the Town, or their agents, shall not be permitted to bid on the purchase of surplus material, unless it is a sealed bid process.

PROFESSIONAL SERVICES

Professional services include insurance, auditing, banking, legal, and engineering services.

Generally these services will be subject to a Request for Proposal process on a three-year basis. The CAO and the Council, or a Committee appointed by Council, are responsible to carry out that process and file a recommendation with the Town Council for the three year appointment.

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The Council, or Committee and CAO, or his designate, shall prepare the specifications for these services, call for proposals, carry out the necessary interviews, and prepare a recommendation for Council approval.

RECEIPT OF GOODS AND SERVICES

Immediately upon the receipt of goods, authorized staff shall ascertain that the goods are received as ordered, relating to quantity and condition. Rejection of delivery shall be reported to the purchasing authority.

A receiving report shall be prepared and signed by the authorized person, and it shall be forwarded to the Accounting Staff to be attached to the purchase order.

Services received may not have a receiving report, and in those cases the purchasing authority’s signature on the invoice shall signify that the service has been provided in an acceptable manner.

If goods are received in an unacceptable condition, the purchasing authority and the Accounting Staff shall be notified by the receiver. The supplier and the carrier shall be notified of the situation.

PAYMENT FOR GOODS AND SERVICES

Payment may be made by the CAO to the supplier if the supplier invoice is accompanied by a receiving report, a purchase order and approval of the purchasing authority. The Accounting Staff, or a designate, shall verify that all appropriate steps and approvals for the acquisition of the goods and services are in place.

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14.4 Recommended Human Resource Policies

The following are the critical human resource policies for non-union staff should be drafted to provide consistent treatment of staff and to reduce the risks associated with the lack of these policies:

• Definition of types of employee • Staffing and recruitment • New employee orientation • Attendance • Overtime/call out • Promotions • Statutory holidays • Vacation • Sick leave • Group benefits • Training and professional development • Leaves of absence • Suggestions and complaints • Grievance procedure • Sexual harassment and discrimination • Exit interview • Control of personnel files

Other policies which are required:

• Procurement of Goods and Services • Formalized tax sale and tax collection • Public access to information • Travel expense reimbursement

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14.5 Draft Committee of Council Policy

Committee of Council Policy

1. This Policy shall be known and may be cited as the “Committee of Council Policy”.

2. The Council hereby establishes a Committee of Council, consisting of all members of Council, to meet at least once per month and at least two weeks prior to the regular meeting of Town Council.

3. The Committee of Council will be responsible for all matters which would be of concern to the Town Council other than those matters which are the responsibility of the Planning Advisory Committee.

4. Meetings of the Committee of Council shall be open to the public, unless the Committee is dealing with an issue that is confidential in nature as outlined in Section 22 of the Municipal Government Act , The public may address the Committee on an informal basis in any open meeting.

5. Staff reports shall be presented to the Committee of Council.

6. The Committee of Council will meet for the purposes of discussion and possible recommendation to Council and no formal decisions will be made when councillors meet as a Committee of Council.

7. Committee of Council may, in its discretion, decide not to refer a staff recommendation to Council if the Committee feels that the recommendation would not be appropriate.

8. (1) The Mayor shall act as Chairperson and presiding officer at the meetings of Committee of Council.

(2) In the absence of the Mayor, the Deputy Mayor shall act as Chairperson.

(3) In the absence of both the Mayor and Deputy Mayor, the Committee of Council shall appoint a Chair from the members present.

9. The CAO shall designate a staff person to keep the minutes of the discussions and recommendations of the Committee of Council.

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14.6 Draft Chief Administrative Officer Terms of Reference

QUALIFICATIONS: EDUCATION: Relevant University Degree, preferably in Municipal Administration, with five years experience in a senior management capacity. Knowledge of local government management or equivalent formal education and experience .

PERSONAL: Strong leadership and management skills are required to lead a team of town staff. Must have ability to communicate with the public and Council in presenting advice and recommendations on all matters affecting local government. Research and computer skills are required.

POSITION OVERVIEW: Reporting to the Town Council, the CAO generally manages the day to day affairs of the town within the applicable legislation, and within the policies and by laws approved by Town Council. Supervises all staff, ensuring that appropriate human resource polices are in place. Provides concise advice to Council. Ensures that the annual operating and capital budgets are prepared for the Town.

The following represents a model Terms of Reference for the CAO:

1. The Town of Pictou will employ a CAO.

2. The CAO is the head of the administrative branch of the Town Government for the Town of Pictou.

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3. The CAO is responsible to the Council of the Town of Pictou for the proper administration of all the affairs of the town in accordance with the policies and plans approved and established by the Council.

4. The Council of the Town of Pictou shall, except for obtaining or providing information, deal with the administrative service of the town solely through the CAO.

5. The Council shall provide direction on the administration, plans, policies and programs of the town to the CAO. No individual member of the Council shall give orders, either publicly or privately, to any employee of the town.

6. The CAO shall communicate with the Mayor on policy issues and relevant information that arise between Council and Committee of Council meetings, and the CAO shall advise Council on a regular basis.

7. The CAO shall:

(a) administer the day to day business affairs of all departments of the town, in accordance with the policies and plans approved by Council.

(b) co-ordinate and direct the preparation of plans and programs to be submitted to Council for the construction, rehabilitation and maintenance of all town property and facilities;

(c) ensure that the annual budgets are prepared and submitted to Council;

(d) be responsible for the administration, accountability and control of the budget adopted by Council;

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(e) present to Council for its consideration recommendations from the staff, along with appropriate commentary from the CAO, concerning any aspect of internal operations, along with proposed By-Laws and Resolutions to give effect to such recommendations as may be adopted by Council;

(f) meet with staff regularly, for discussion of matters of policy and for co-ordination of all town activities;

(g) attend, or be adequately represented at, all meetings of Council and any other meetings that Council may establish, and with the permission of the presiding officer make such observations and suggestions as the CAO may deem expedient on the topic under discussion;

(h) make written recommendations to Council, when the CAO or the Council deems it necessary, with respect to a chosen topic and those recommendations shall be recorded as part of the minutes of the proceedings;

(i) have power to regularly study the Town’s administrative organization structure and operations and recommend any changes that would, in the opinion of the CAO, improve the effectiveness or efficiency of the internal operations;

(j) recommend to Council the appointment, employment, suspension or dismissal of the Department Heads.

(k) appoint, employ, suspend, or dismiss all other employees in accordance with procedures laid down in the Town’s Human Resource Policies, with power to further delegate this authority;

(l) subject to policies adopted by Council, make or authorize the making of expenditures for the purchase of equipment, supplies or other items required

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for carrying on the business of the Town, and enter into contracts therefore on behalf of the Town where the amount of such expenditure does not exceed, in any one case, the sum of five thousand Dollars ($5,000) provided it is a budgeted item;

(m) submit a recommendation to Council respecting any proposed expenditure, for any purpose, in excess of five thousand Dollars ($5,000), and respecting any contract involved therein, however, notwithstanding the above, the CAO is empowered to make emergency expenditures in excess of five thousand Dollars ($5,000) and must report the expenditure immediately to Council for ratification at the next meeting;

(n) subject to policies adopted by Council, sell any personal property belonging to the Town not exceeding a value of five thousand Dollars ($5,000) which, in the opinion of the CAO, is no longer needed by the Town or which is obsolete or unsuitable for use.

(0) subject to policies adopted by Council, personally or by an agent, negotiate and execute leases of real property owned by the Town that are for a term not exceeding one year, including renewals.

(p) supervise the performance of all contracts or agreements entered into by the Town and ensure that all the conditions relating thereto have been fulfilled in accordance with the provisions of such contracts or agreements and the CAO shall report to the Council respecting such contracts;

(q) obtain information regarding all boards and commissions which affect the interests of the Town and report to Council regarding same when, in the opinion of the CAO or Council, such reports are deemed necessary;

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(r) carry out such additional duties and exercise such additional responsibilities as Council may assign.

8. (a ) in the event of the temporary absence or disability of the CAO, the CAO may designate by letter to be filed with the Mayor, a qualified person to perform the duties of the CAO during that absence;

(b) If the absence or disability of the CAO will be lengthy, the Council shall appoint a qualified person to perform the duties of the CAO until the CAO returns.

9. The CAO, to assist in performing the duties of that office, may use the services of any and all staff of the Town.

10. The CAO may attend all meetings of the Council and any board, committee, commission or corporation of the Town and make observations and suggestions on any object under discussion.

11. Acts as Human Resource Manager for the Town, ensuring adequate polices are in place.

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14.7 Study Terms Of Reference

The Town of Pictou, “ the Birthplace of New Scotland ”, located in Pictou County, Nova Scotia, has requested a proposal to carry out an Organizational Study of the Town, to evaluate the current ability of the Town departments to provide effective public services to its residents and businesses, and to determine strategies that would result in a strong, viable local government for the Town.

The consultant recognizes that the study will be managed by an Advisory Committee as outlined in the Call for Proposals, to which the consultant is ultimately responsible. It is recognized that the Department of Service Nova Scotia and Municipal Relations will have joint oversight responsibility with the Town of Pictou.

Specifically the Request for Proposals requests the consultant to:

• Review all pertinent background and study information including, but not limited to, prior municipal reform reports/studies and current municipal legislation.

• Familiarize themselves with local government initiatives that have occurred outside Nova Scotia.

• Clarify the expectations and job responsibilities for each position within the organization, including a review of recent staff position descriptions for completeness, gaps and overlaps between positions;

• Determine if the current level of staff (full time and part time) is appropriate and qualified to ensure the financial and administrative tasks are carried out efficiently;

 Review the current administrative structure (Council as CAO) and determine whether it is appropriate (with recommendations for improvement) or whether the CAO system should be implemented;

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 Determine whether the workflow organizationally and administratively between Council, clerk, supervisors and staff is appropriate in terms of completing work in a timely fashion, tasking and work priority assignment;

 Assess the information flow between Council, Clerk, staff, and public and determine appropriate strategies;

 Review the accountability for work delivery of individuals and departments;

 Review the department structure of the municipality;

 Determine if the building structures for staff is adequate for the Town of Pictou in terms of office layout, space requirements and whether renovations to the existing building or other facilities should be considered;

 Assess alternative forms of providing service delivery;

 Develop an implementation plan with associated recommendations, including but not limited to:  Staffing options  review of salaries as a result of any changes in job duties  preparation in draft of any necessary by-laws or resolutions necessary to carry out the proposed plan  Alternative methods of service delivery  timetable for accomplishing these recommendations

 Determine human resource matters concerning management practices, leadership abilities of management, staff moral, performance assessment, conduct, leadership, policy documents and procedures, succession planning;

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 View the roles, responsibilities and relationships between Council, various Committees of Council and surrounding area (eg. PRDC).

• Review the current and future financial ability of the Town of Pictou to provide these services using a debt affordability model for long-range financial planning and the municipal indicators data.

• Consult during the process with elected officials of the Town of Pictou, Town staff, and other appropriate community groups.

• Obtain the view and opinions of the citizens of the Town of Pictou through a series of education and feedback meetings.

• Examine current existing shared service agreements between the Town of Pictou and neighbouring municipalities and the potential for revision of these agreements, or new service agreements among governments.

• Examine the potential impact that the proposed modifications of these agreements would have on the Town of Pictou.

• Provide recommendations on improving the staff structure of the Town of Pictou.

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14.8 Feedback Public Meeting ~ March 13, 2007

The following is a summary of the comments from the public meeting held on March 13 th

 Concern about the capability of Town to implement the recommendations.

 Are we aware of the new property taxes and were they used in the projections?

 Why aren’t taxpayers forced to pay their taxes?

 What will we do if there is a major emergency requiring financial resources?

 Examine the services that can be shared with other municipalities in Pictou County.

 Develop a long-term strategic plan and determine what we can do and cannot do.

 Examine the impact of amalgamation.

 Examine other options other than increase taxes.

 Develop milestones to measure the success of Town Council in implementing the recommendations.

 Concern about lack of development in the Town.

 Does the staff structure need to be adjusted?

 There is a need for all citizens to be involved in the solutions to these issues.

 Need to market the Town more effectively.

 Sell the DeCoste Centre.

 Concern about the level of subsidy of the aquatics programs.

 Concern for need of businesses in Town, rather than having to go to the County or other Towns.

 Examine the delivery of all services in recreation and waterfront.

 Examine the management of the Town and services that are a financial drain.

 Are there best practices that we can learn for the Town of Windsor, whose downtown seems to be active.

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 How accurate are the assessments for 2007?

 Lost seven businesses in last 12 months. Need to look urgently at Tourism.

 Based on the forecasted demographic data, are we doomed?

 Loss of commercial tax base puts pressure on residential tax rate. Is there land in Town that could be used for residential development, perhaps in partnership with developers?

 Concern about the demographics and how to get residents to become involved.

 Use the 2004 Strategic Plan as a kick start to developing a revised plan.

 Announced that a new marketing $750,000 international fund raising campaign for the Ship Hector Foundation.

 DeCoste Centre and Ship Hector should be financially self sufficient.

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14.9 Implementation Plan

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14.10 Municipal Indicators

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14.11 Three Year Operating Forecast

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