Port Hopers for Fair Taxes Report related to MPH’s Accounting dated October 27, 2016
On June 30, 2016, Mr. Justice McCarthy ordered the Municipality of Port Hope (MPH) to prepare an accounting of the Ward 2 Low Level Radioactive Waste (LLRW) Fund from 2001 to present, and to provide that accounting to all ratepayers.
The Court Order was simple and straightforward: MPH was to account for the income earned on the Fund and all payments made out of the Fund. MPH produced an accounting dated October 27, 2016. There appear to be a number of mistaken assumptions and misleading conclusions.
As an example, in the MPH Accounting for each year from 2001 to 2015, their numbers differ from the actual amount of money in the Fund, as evidenced by the Fund Managers’ bank statements. These yearly differences range from minus $242,000 to plus $1,850,000 and are listed in Table A. Download the PDF report with Tables A, B, C and Notes.
To address the issues and confusion created by the MPH Accounting, Port Hopers for Fair Taxes (PHFFT) has prepared explanatory Tables B and C. (Download the PDF report with Tables A, B, C and Notes). Rather than attempt to explain the false assumptions used by MPH as the basis for their calculations, we have compared the Fund’s bank statements produced by the Fund Managers, with the MPH tax-rating by-laws.
These sources are noted at the bottom of Table C and in the set of Notes explaining the correcting adjustments.
In round numbers, the Ward 2 LLRW Trust Fund earned $5 million over the past 15+ years. Of this, $1 million was withdrawn from the Fund and used properly according to the terms of the Fund. $4 million was withdrawn but not used properly and this amount “borrowed” from the Fund needs to be repaid. Past interest on the amount borrowed comes to three quarters of a million dollars, and this amount also needs to be put into the Fund.
Of $5,065,797 withdrawn from the Fund by MPH, virtually every dollar of what the Fund earned between 2001 and 2016, only $1,080,250 or 21.3% was actually used for the exclusive benefit of Ward 2 ratepayers (please refer to Table B).
The total owing by MPH, as at July 1, 2016, is just under $4.75 million as shown in Table C. This includes $550,589.19 that MPH withdrew from the Fund in March, 2015 with no justification at that time or since.
The MPH Accounting shows no attempt to include interest on the $2.2 million that they acknowledge and show is owing to the Fund. As illustrated in Tables B and C, MPH withdrew $3,985,547 that was not used properly, and this amount needs to be treated like any other loan and repaid, together with interest, to those from whom it was “borrowed” (as shown in Table C).
The rate of interest needs to be at least equal to the rate of interest earned by the Fund in any given year. If MPH had not withdrawn the money, it would have been earning interest along with the rest of the money in the Fund.
Some of the many apparent irregularities identified in MPH’s Table 1 of its accounting include:
in 2002, and for the next three years, MPH claims that almost the entire amount of interest earned was used to reduce the levy at the time the levy was established in each of those years, despite the fact that the actual amount of those interest monies would not be known until year-end;
MPH claims that $516,500 was used to decrease the Ward 2 levy in 2012, when in fact almost that entire amount of money was used to decrease the Ward 1 levy;
Port Hopers for Fair Taxes is most disturbed by the timing of Municipality of Port Hope’s removal of the additional $550,589.19 from the Fund in March 2015, as noted above. An MPH document dated February 2, 2015 acknowledges that they owed more than $1 million to the Fund, regardless of whether the Fund was a trust or not. By March 31st of 2015 they had quietly withdrawn an additional $550,589.19 without disclosure, right in the middle of the Court proceedings. As recently as February 7, 2017, the Mayor stated at a Council meeting that during the course of this council, none of the funds were used for anything except for tax relief.
Port Hopers for Fair Taxes expects the Municipality of Port Hope to repay the $4.75 million immediately including interest which has continued to accrue from mid-2016 to the present. The ongoing delay has impaired relations within the community since 2012, and continues to erode trust in Council and the Municipality.
PLEASE NOTE: It is very important to read Table C and the Notes together – they are interrelated. We recommend reading from printed copies, not on a computer, tablet, or phone screen.
A separate PDF of Tables D and E with 9 additional tables associated with the Set of Notes is available. Download here. The PDF includes: Table D-2001, Table D-2002, Tables D-2004 and E-2004, Tables D-2005 and E-2005, Tables D-2012 and E-2012, Table D-2013.