Half a pound of tuppeny rice..Half a pound of treacle

Anonymous has left a new comment on your post "Restraint Is Not The MOJO":
It is my understanding that the town spent $700,000, being funds that were charged out, only to have this amount reversed by an OMB ruling. Apparently there will be an additional amount that will be back-charged.
It must be nice to spend money that one does not have in hand, on the assumption that one day it will come in.Accrual accounting, including provisions for development fees to come at a later date, is a dangerous tool.
Some of the provisional or reserve funds are really not worth anything until the cold, hard cash is received.
Yet Council keeps dipping into these reserves that do not yet exist.
And if the reserves are not large enough an accrual is made for a future year or two when development fee monies will be received.
Council should NOT spend what is not in the till.
It would be better to offer debt obligations for sale, bonds, to be retired after a fixed period of time from future revenues.
And the town's fee structure is a joke. Fees, according to the draft document for 2013 have generally not increased at all from 2012. But costs have gone up
.Why are fees not a reflection of actual cost? User fees should be in force and if there has to be an increase of 10% or 20%, so be it.
Why should the majority of residents, who do not make use of town facilities, have to pay for those who do
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Several points are raised in the comment.
The $700,000 that has to be returned to developers  came about as follows:
Municipalities  have to update development charges every five years.  Master Plans, forecasting  needs, to justify  development charges must be prepared to support the amount of the fees.
The last  D.C.Bylaw  was challenged by the development industry. We knew it would be. We collected  the fees established by the  bylaw anyway. And used them.
Orangeville  had  the first OMB hearing on the issue. The OMB . found in favour of the development industry, to an extent. In our case, we have to pay back  $700,000 to the development industry.  Part of the  fees  are  allocated to  parks and recreation .
Some projects have been approved and are  under construction in anticipation of fees being received. So, the reserve is in the red. That's not normally a risk. 
Fees are paid with building permits applications. .No fee, no permit. 
I think development fees have skewed municipal finance.
New facilities are approved without reference to the community or  future cost of operation; i.e.  the proposed youth centre.
Ninety per cent of the cost is paid by new home buyers. Who are not always made aware  how much tax is hidden in the price of a home. Market value assessment  means tax  is paid on tax  forever and a day. 
Development charges are a  golden goose for municipalities.
Funds  to repay $700,000  to  developers will have to come from somewhere. 
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Normally, a municipality has new development during the year.
The property is not immediately assessed. It means, during the year, supplementary assessment is entered in  the books. It becomes a surplus to be carried forward to the  next year's budget. .
Until the last term,Aurora  never budgeted to include 
supplementary assessment in a current budget. 
In the last term, council instructed staff to  calculate  half the anticipated supplementary assessment to make the budget look better.  We are probably still doing that.
It's not a good policy. The money should not be spent until it's in the can. 
Municipal law does not permit a municipality to budget for a deficit.  If we don't have it we can't include it. 
But we did.
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User fees are supposed to pay the cost of providing the service.
It's clear they do not.  
Some groups pay.   Some don't.
Others apply for a waiver  and receive it  in the form of a grant. 
Municipalities do not make charitable donations . But a  grant to cover  user fees  is exactly that. 
There is no consistency. 
There is no equity. 
There is little  inclination towards either.
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