Elliot Lake City Council will hold a special meeting Tuesday night, only one day after council's regular Monday meeting.
The second meeting has been set up to bring councillors up to speed on the city's insurance program, which saw a 13 per cent premium increase this year.
The exercise, arranged in cooperation with the city's insurance consultant, BFL Canada of Toronto, is ongoing, and designed to mitigate Elliot Lake's future exposure to risk.
City staff have been taking part in a number of seminars and instructional sessions to inform them about the 2021-2022 insurance market place. There are many more to come.
The training sessions stress the importance of developing a city risk management culture.
In BFL's written presentation to the Tuesday meeting the company explains that the insurance industry has soft and hard market cycles.
Unfortunately, we are currently experiencing a hard market, which has produced increased premiums, increased deductibles, restricted terms and limited capacity.
That creates plenty of stress for policy holders, including the city, who find they are paying a lot more just to maintain the coverage they need.
Since June of 2021, Elliot Lake staff has been working to establish and strengthen risk mitigation involving insurable city activities.
Elliot Lake has faced increasing premiums since 2021 and last year's insurance premiums went up nearly 44 per cent, up $256,774 over 2020.
In 2022, another increase of 13.52 per cent was delivered, with another increase of $112,851.
A day before the special meetìng on Monday night, council will hold its regular meeting.
Up for discussion Monday are Item 7.2 Volunteer Policy and Item 7.4 : 2022 Property Tax Policy, Rates and Levy.
Treasurer Amy Sonnenberg is recommending council adopt Ontario Regulation 284/09 which permits municipalities to exclude certain expenses from their estimated expenditures when setting budgets and tax rates.
These exceptions includes amortization expense, post-employment benefits expense and landfill closure and post-closure expenses but if the budget does not include these expenses, a report to council is required.
That report would include an estimate of the change in the accumulated surplus of the municipality resulting from the exclusion, as well as an analysis of the estimated impact of the exclusion of any of the expenses on future capital asset funding needs.
Sonnenburg explains that the city’s average annual amortization expense is about $2M.
The average investment in capital (transfers to capital reserves) is approximately $3.5M.
The average difference between these is approximately $1.45 million.
Sonnenburg wrote, "If the city were to fully fund amortization as a current expense, the tax levy would have to be increased by $1.45M per year.
"The water and sewer plant's average annual amortization expense is approximately $550,000. The average investment in plants capital is approximately $377,000 and the difference is approximately $33,000."
Since the city provides health and dental benefits to retirees, every three years, a consultant reviews the benefits package along with the workforce demographics, and forecasts future benefit obligations and the impacts on post employment benefits expenses.
Amortization is an accounting entry that is recorded based on the historical cost of an asset when it was purchased or originally constructed, and is expensed in the city's financial statements over the expected life of the asset.
Many of the city’s infrastructure assets are completely amortized (a net book value of zero) and beyond their useful lives so there is no write-down recorded.
Waiting until the end of an asset's useful life and then attempting to pay the entire cost in one year is a problem when infrastructure costs can reach millions of dollars.
"Borrowing is always a capital financing option, but that places the cost of asset replacement on future taxpayers, not the taxpayers who used the asset during its useful life," wrote the treasurer.
"The 2022 capital budget has acknowledged this (infrastructure) funding deficit and the reserves analysis is updated regularly," Sonnenberg concluded.
If people want to participate in the public input session at Monday night's hybrid meeting, they have until noon Monday to notify the clerk.
Those who appear in the council chamber without first registering with the clerk, will not be given permission to speak.
Monday's regular hybrid meeting at 7 p.m. and Tuesday's special hybrid meeting at 6 p.m. will both be live streamed on the city's website.