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Big write-offs in drainage department

Two rounds of billings in 2020

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The ongoing effort to update accounting practices in Norfolk’s drainage department has resulted in another large write-off.

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An assessment of the drainage department’s accounting practices last year resulted in an $8-million reduction in overall county assets. Further review has produced an additional write-off of $2.4 million.

The numbers were contained in a report and presentation to Norfolk council last week.

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“No staff really wants to bring this type of report before council,” Jason Burgess, Norfolk’s interim general manager of corporate services, said at the Jan. 14 meeting.

“This has been an issue that has gone on for far too long. It would’ve been easy for staff to give up on this and keep it buried or keep it in the closet. This is not a positive report and it doesn’t reflect well.

“You should take as a positive out of this that there have been problems and we are clearing up the problems.”

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Accounting inconsistencies were identified in Norfolk’s audited financial statement for 2018. In that report, the auditor noted that municipal drains under construction or maintenance were defined as county “assets.” Costs paid by third parties were reported as “user charges and provincial government transfers.”

Once these funds were accounted for properly, the sum total of Norfolk’s tangible assets was reduced from $553.6 million to $545.5 million.

In 2019, further review of drainage projects dating back many years produced an additional write-off of $2.4 million. Acting deputy treasurer Denice Williamson says the latest write-off is related to outstanding charges that have been deemed uncollectable.

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Mayor Kristal Chopp says reviews of this sort are helpful because Norfolk County needs to address the shortcomings of the past before it can properly prepare for the future. She sought assurances that the drainage department has its financial house in order and that safeguards are in place to keep it that way.

“I want to stop worrying about what has happened in the past and start looking at how council is preparing things moving forward,” the mayor said. “It’s reports like this that are helping us to move forward and get to that point.

“But what other assurances – seeing that this is the second multi-million dollar write-off that we have; first $8 million and now $2.4 (million) – what assurances does council have that this isn’t going to happen again?”

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Williamson replied that Norfolk’s drainage division and treasury staff have forged a closer relationship and that the two are working together to better understand each other’s responsibilities.

Treasury staff are advising on sound accounting principles while drainage staff have illuminated some of the challenges they face.

Among the latter are complex infrastructure projects involving public and private property that can last many years through a complicated appeals process, complex legislative hurdles involving issues such as wildlife habitat and species-at-risk, a churlish public that often resents paying for work that improves their land, and a province-wide shortage of engineers qualified to oversee drainage projects.

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Reforms along the way include an updated cost-recovery plan that will see two rounds of billings in 2020. Chopp and her council colleagues are bracing for a backlash because many of these invoices will wind up in the hands of property owners who were not around when local drainage petitions were circulated, signed and approved.

“We get calls all too often that the ownership has changed and that (drainage obligations) have not been disclosed,” says Norfolk drainage superintendent Bill Mayes.

“But the assessment is to the land, not the owner of the land at the time.”

A background report says county drains impact 37 per cent of Norfolk’s land mass representing a third of the county’s population. Of the 32,746 properties in Norfolk, 10,800 benefit from municipal drains.

The same report says there are 960 kilometres of drains in Norfolk, which is about half the length of all roads and highways in the county.

“Norfolk County’s agriculture is renowned as Ontario’s greatest producer of many commodities such as asparagus, tart cherries, ginseng, peppers, pumpkins, rye, squash, zucchini, strawberries and other vegetables,” the public works report says.

“Without proper drainage being established over multiple generations, these successes may not have been possible.”

MSonnenberg@postmedia.com

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