Taxing All TSBP Residents For Oliphant Water System Upgrades Is Illegal (Craig’s Commentary 3-11)


My commentaries 3-6 and 3-10 dealt with the Oliphant water system “refurbishing” Fiasco.

This commentary deals with illegality of fees imposed on taxpayers for Oliphant water system upgrades.

What Municipalities can do and what they cannot do is defined by provincial statute, mainly the municipal act.

The Municipal Act contains prohibitions, that is things that the municipality cannot do, and also allowances, that is things that the municipality can do.

Municipal Act Part XII contains both allowances and prohibitions regarding “fees and charges”, with section 391 in part XII indicating what the municipality is allowed to do regarding fees and charges, and sections 393 and 394 indicating what is prohibited.

Whether the municipality can impose taxes on water system non-users for water system upgrades or for operating costs is not explicitly spelled out. It is not specifically listed as allowed, nor is specifically prohibited.

Councillor Bowman report 21-2012 in the October 2nd, 2012 council agenda says:

“Although the provincial mandate is that users of the system are financially responsible for the operating costs, in my opinion, this mandate does not prohibit the municipality from assisting with these costs.”

The first part of Bowman’s claim is correct. The Act says users are financially responsible for the operating costs.

But the second part of Bowman’s assertion is wrong. It is true that charging non-users to assist users is not explicitly on the prohibitions list. But what is also true is that is not on the allowances list either.

And what is most important is that in the context of the purpose of the Act and in the context of the explicit allowances and prohibitions in the Act, it is clear that taxing or charging non-users to subsidize users is not allowed.

Taxing /charging non-users is therefore illegal.

Section 391. (1) of the Act says:

“Without limiting sections 9, 10 and 11, those sections authorize a municipality to impose fees or charges on persons, … (a) for services or activities provided or done by or on behalf of it;”

This is the general allowance section. It allows the municipality to impose fees on persons for services provided.

This has to be taken to mean that the municipality can impose fees or charges on persons for services provided to those persons. There is no other reasonable interpretation.

There is no allowance in section 391 (1) for the municipality to impose fees or charges on persons for services not provided to those persons.

There is no allowance for the municipality to impose taxes on persons not on the water systems for the services they do not receive.

There is an allowance for fees to cover capital cost on persons who will get the service in the future;

Section 391. (1)

Deferred benefit
(2) A fee or charge imposed for capital costs related to services or activities may be imposed on persons not receiving an immediate benefit from the services or activities but who will receive a benefit at some later point in time. 2006, c. 32, Sched. A, s. 163 (2).

Given that the legislators specifically included this “deferred benefit” allowance, if the legislators had wanted to allow a fee for capital costs related to services or activities to be imposed on persons who do not and cannot and will not ever receive the service, they would have said so right in the Act.

But they didn’t say so. So charging non-users for upgrade costs is implicitly, but clearly, and obviously, not allowed.

Nor is charging non-users operating costs allowed.

Also, common sense would say charging non-users is not allowed. We have a user-pay system.

After Councillor Bowman wrote her report 42-2012 I told her that by my careful assessment of the Act she was incorrect, and that her conclusion was wrong.

I asked her to back up her contrary “opinion”, in writing, so that the people of the town could assess the validity of her conclusion (that taxes can be imposed on non-users).

She said she would back up her opinion.

But in spite of several requests on my part she never did back up her opinion.

Councillor Bowman would not even confirm whether she had read Part XII of the Municipal Act.

It seems that council has accepted Councillor Bowman’s unsubstantiated “opinion” as fact, on blind faith, without asking a single question.

Council is illegally imposing taxes on general taxpayers to cover half of the Oliphant upgrade costs.

Council must reverse the decision.

Craig

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17 thoughts on “Taxing All TSBP Residents For Oliphant Water System Upgrades Is Illegal (Craig’s Commentary 3-11)

  1. amartiannamedsmith says:

    So as I read your tight, self-serving interpretation of the act I now understand two things:
    1) No one, I repeat no one who lives, anywhere else in the TSBP will ever move to any portion of the town served by the Amabel-Sauble water system and benefit from the work done!
    HMMMMM I doubt even you have any control over where people choose to live.
    2) Anything the government does not expressly tell us in law we are allowed to do is, by your thinking or lack of it, automatically forbidden and illegal!
    HMMMMMMM Better stop breathing and right now Craig – I can’t find any statute that allows it!

    The sad thing for the TSBP is that you’ll run in the next election.
    The truly sad and even more dangerous thing is that you get to vote!

    the Martian

  2. 2censworth says:

    Sounds like the municipality is authorized to recover costs from users if it wants to. In this case it sounds like TSBP wants to recover half the cost from the users. Sounds like Council thinks it’s fair and reasonable to pay for the other half from general tax revenue. Personally I don’t mind helping the users of the Oliphant water system with part of a cost that they didn’t bring on themselves. We all elected the Councilors who created the situation so maybe we should all help out with the solution.

    • Alice says:

      2¢ an interesting perspective…if the municipal act does not say that the town must recover the costs from the users then it seems logical, in the absence of such recovery charges, the entire town would pay. Helping our fellow residents pay for something few, if any, of them (or all residents of tsbp for that matter) asked for is the right thing to do.

      The bigger issue here is that the Town seems to keep making the same mistakes over and over without any apparent attempt to stop their old way of doing things.

      Look at all the botched projects and wasted money in the last 10 years..1.6 million on a sewer project – no proven need, $150K (just a guess) on 15th side road – still washing out, Oliphant Fiddlehead well fiasco – a lot of wasted $$; Amabel-Sauble water system – unaffordable and can not handle any more users, Sauble school – budgeted costs are $23 for every $1 in revenue, and, I am told, many more such poor business decisions.

      We need to somehow change the way the Town thinks about and makes decisions on these big projects. Fiscally irresponsible decisions seem to be being made for some reason unknown to me (emotional, political, greed). This has got to stop; none of us can afford any more costly mistakes.

      Alice

      • cgammie says:

        Alice:

        you said “if the municipal act does not say that the town must recover the costs from the users then ….”

        The municipal act prohibits charging non-users.

        Well said about “fiscally irresponsible decisions”. Greed induced corruption is the cause.

        Craig

      • 2censworth says:

        Craig, Earlier you said “charging non-users for upgrade costs is implicitly, but clearly, and obviously, not allowed.” Now you are saying”The municipal act prohibits charging non-users”. Which is it, and could you quote from the statute. Thanks

      • cgammie says:

        2censworth

        Municipalities get their authority to act from statutes. The Municipal Act says what is allowed. What is allowed includes what the act says explicitly is allowed and what we can infer from the context is allowed. What is not allowed, that is what is not explicitly or implicitly allowed, is by definition unauthorized. Charging fees to non-users is not explicitly allowed. Charging fees to non-users is not implicitly allowed. Charging non-users for upgrade costs is implicitly, but clearly, and obviously, not allowed. Therefore the town lacks the statue authority to charge non-users.

        To me that’s the same as saying “the Municipal Act prohibits charging non-users”.

        But I can work with “the town lacks the statue authority to charge non-users”.

        If the town acts outside its statute authority, it is acting illegally. The case law is clear on this point. So I could say “charging non-users is illegal”.

        I think “charging non-users is prohibited” is correct.

        The sections of the Municipal Act on which this argument relies are in my commentary 3-11.

        All this is common sense.

        I would like the town to have a very small micro brewery built near my Sauble home, with lines to pump draft beer directly from the microbrewery to me and my neighbours, and only to me and my neighbours.

        Because we ignore the municipal act here, the town can charge all non-users, that is all taxpayers, for the microbrewery (capital cost), and for the beer (operating cost) that they do not and cannot receive.

        I may just change my views on this user-pay business.

        Craig

      • 2censworth says:

        Craig, I think there might be hope. I distinctly read your reference to ‘common sense’.

        Common sense would suggest that the taxpayers would have a problem with the piped in beer to your house, although I think many readers of this blog might applaud if doing that would moderate your excessive preoccupation with the Municipal Act.

        Common sense tells me that as a community we should be reasonable when one area needs the help of the whole.

        Common sense also tells me that the rules governing what Council can and cannot do are somewhat open to interpretation, and that it would be a frosty Friday before you or any one individual or special interest group could override a reasonable decision of Council.

        More I think of it piping beer into your kitchen tap sounds like a good idea. You certainly wouldn’t need to worry about bad water:)

      • cgammie says:

        2censworth

        You said: “common sense also tells me that the rules governing what Council can and cannot do are somewhat open to interpretation”

        The rules are not open to interpretation. The rules are as clear as they could be. Legislators do not like ambiguous law.

        You said: “it would be a frosty Friday before you or any one individual or special interest group could override a reasonable decision of Council.”

        Technically that’s true.

        But any one or individual can apply to the courts to have an illegal decision quashed.

        The municipal act allows:

        Restriction on quashing by-law
        272. A by-law passed in good faith under any Act shall not be quashed or open to review in whole or in part by any court because of the unreasonableness or supposed unreasonableness of the by-law. 2001, c. 25, s. 272.
        Application to quash by-law
        273. (1) Upon the application of any person, the Superior Court of Justice may quash a by-law of a municipality in whole or in part for illegality. 2001, c. 25, s. 273 (1).

        It is well established that the standard for determining illegality is “correctness”, not “reasonableness”. It is also well established that in deciding what is correct deference to the municipality is inappropriate.

        So whether someone, or anyone, thinks a council decision is “reasonable” is irrelevant. It’s whether the decision is legal that counts. Which brings us right back to the statute.

        You are correct that no individual or group can arbitrarily override a decision of council. But the Municipal Acts trumps a council majority. Always.

        Craig

      • cgammie says:

        You said:

        “Common sense tells me that as a community we should be reasonable when one area needs the help of the whole.”

        From 2002 to 2005 I and a few others worked very hard to try to stop Carl Noble and his henchmen from forcing the water systems combination fiasco, which included the Oliphant fiasco, on the users of the Sauble area water systems. We were unsuccessful. In our group of six, only two were users of Sauble area water systems. The other four chose to help. We were not forced. It was our choice.

        Yes people should help their neighbours. It’s the neighbourly thing to do. But people must have the choice. People must be free to decide for themselves if they want to help their neighbours, and how much. Just as council members should be free to decide how much of their own money they want to donate to their neighbours. But neither council members nor you nor I have any right to decide how much someone else will give to their neighbours. Giving is a private decision, at least in the municipal context. And no one has any right to pass judgment on anyone for their private decision.

        That’s what common sense tells me.

        Craig

      • amartiannamedsmith says:

        Alice

        “The bigger issue here is that the Town seems to keep making the same mistakes over and over without any apparent attempt to stop their old way of doing things.”….
        ”This has got to stop; none of us can afford any more costly mistakes.”

        A little clarification may be in order.
        “1.6 million on a sewer project – “
        20+ years of discussion and argument on that subject by council after council and only the current bunch had the guts to investigate the question that allows you to say “no proven need”

        $150K (just a guess) on 15th side road – still washing out,”
        The original plan called for 8 culverts when the road was rebuilt but previous council, in order to grab the grant to do the job, caved in to a couple of Craig’s buddies and went with one. Current council has followed a reccomendation that, I believe, allows the road to flood but does not wash out but should have listened to Kirkland when he said to put the rest of the culverts in, solve the problem once and for all and be prepared to defend the OMB application that would result.

        “Oliphant Fiddlehead well fiasco – a lot of wasted $$;”
        Please don’t expect any argument on that one but at least the coucil of the day investigated whether the system could be broken up and the possibility of recovering cost and when that proved to be non-viable they decided to assist users on repair costs.

        “Amabel-Sauble water system – unaffordable and can not handle any more users”
        Actually not so at all! Expensive yes but if the MOE will allow the school well head to be turned up beyond the 22% it now operates at there could me many more users added bringing cost per person way down.

        “Sauble school “
        Almost all those budgeted costs have not been on the town tax levy but since there’s really only one taxpayer it has cost everyone for the mistake made many years ago in building the thing.

        “I am told, many more such poor business decisions.”
        Who told you that? Craig? Come on Alice,(in underland) he’s Madder than the Hatter!

        The point is that there are changes being made and hopefully more to come.
        Will we all agree with every one of them?
        I doubt it but to not try would be an insanity really worthy of one of Craig’s crayzy lawsuits!

        Mike
        !

      • cgammie says:

        Is it legal to charge non-users?

        There are two perspectives. Some, including council, say if it’s not specifically or implicitly prohibited, it must be allowed.

        Others, including me, say that if it is not specifically or implicitly allowed by the Municipal Act, it’s prohibited.

        I offer this from Justice Pierce in his decision re Harding v. Fraser.

        “[29] The recent trend in jurisprudence involving municipalities is to move away from the principle that municipal powers are closely circumscribed by their governing statute, and to interpret powers conferred on municipalities broadly. This approach defers to the decisions of locally elected officials. See Croplife Canada v. City of Toronto, [2005] O.J. No. 1896 (Ont. C.A.).
        [30] However, that deferential approach cannot, in my view, extend to giving a council standing to do indirectly what the Legislature has not authorized it to do directly. “

        Harding v. Fraser, 2006 CanLII 21784 (ON SC)

        The case law is clear: “Council cannot do what the Legislature has not authorized it to do directly.”

        Craig

      • riddlerray says:

        Alice:

        “1.6 million on a sewer project – “

        Alice you are correct. Turner is wrong.

        Martian Jim Turner voted against firing Genivar. Martian Jim Turner supported the 70 million dollar Sauble sewers proposal. Martian Jim Turner was clear in his belief that septic systems were the cause of all problems. Martian Jim Turner only went along with the pollution study because he would have looked even more like an idiot if he hadn’t.

        $150K (just a guess) on 15th side road – still washing out,”

        Alice you are correct. Turner is wrong.

        Previous council did have the sideroad 15 bridge design modified. But it wasn’t to get a grant. It was because Mark Wunderlich and Phil Dyer went into a panic and convinced themselves and council that two citizens and their hot-shot lawyer could actually stop the project.

        Mark Wunderlich said that the two and their lawyer were “going to issue a Part II order”. Absolutely ridiculous. But council (past) bought it. The hot-shot lawyer had nothing. Absolutely nothing. He was bluffing. Posturing. Council was sitting with a royal flush, and council folded.

        Contrary to Turner, at the time Craig didn’t even know the two citizens or their lawyer.

        Contrary to Turner, council has not “followed a recommendation that allows the road to flood but not wash out”.

        The road still floods and still washes out.

        Kirkland’s proposal to put the rest of the culverts in will help but will not solve the problem.

        “Oliphant Fiddlehead well fiasco – a lot of wasted $$;”

        Current council did not competently or seriously investigate whether the Oliphant system could be broken up. And they did not seriously consider the possibility of recovering costs.

        And contrary to Turner, neither “proved to be non-viable”. If they had done any analysis, if they had any “proof”, they could have shown us. Now they want to throw (our) good money after bad, based on the “proof” that we’re not allowed to see.

        And contray to Turner, council did not decide to assist users. Council decided that taxpayers would assist users. There’s a difference. Council’s decision was illegal. It’s not their money. It’s ours

        “Amabel-Sauble water system – unaffordable and can not handle any more users”

        Alice you are correct. Turner is wrong. It is true the pumps can handle more. But the ground cannot supply more.

        “Sauble school “

        Alice you and Turner are both wrong. Costs are $300,000. Council obligation is by contract about $16,000. Councillor Jackson deceived council into believing that our obligation is $67,000. Council did not ask any questions. Council just believed it. Council ponied up an extra $51,000. Of taxpayers money. Illegally.

        Another bad decision.

        Keep your eye on the Sauble Medical Clinic decision, the Jewell Bridge/ sixth street bridge decision, the airport decision, the Wiarton water and sewers decision.

        Alice you are right: ”This has got to stop; none of us can afford any more costly mistakes.”

        Ray

      • riddlerray says:

        Alice: In your March 24 post, you expressed concern about current council wasting “1.6 million on a sewer project – “

        In a March 25 post, Jim Turner (“the Martian”) replied:

        “20+ years of discussion and argument on that subject by council after council and only the current bunch had the guts to investigate the question that allows you to say “no proven need””.

        Was it really current council, as Turner claims, that had the “guts” to ask if there was a need?

        Here are three quotes from Owen Sound Sun Times Friday, October 29, 2010.

        “I firmly believe if something isn’t done very, very quickly we’re going to see it mandated by the Ministry of the Environment or the province. Somebody’s going to come in and say start digging and do it now. And that’s coming very, very quickly. That’s going to happen. It cannot be allowed to continue the way it is,” Turner said.

        “But [Turner] — and others who believe a sewer system is needed at Sauble …”

        “They’re needed. We know the need is there . . .,” said Jay Kirkland.

        “They may be running deficits but I don’t think the provincial or federal governments could take the embarrassment of Walkerton again,” Close said.

        In a March 10, 2011 OSST article the reporter asks Close:
        “Does [the septic inspection proposal]put the intent for a full sewage system for Sauble Beach on the back burner?”

        He captures Close’s reply as:

        “Absolutely no” says Mayor John Close. “We will be tendering for new plans with specialty engineering firms with particular disciplines and in August we will be prepared to make some decisions. We want to be able to tell the naysayers that this will work.”

        In an early September 2011 interview John Close said that he:
        “.. was just doing his due diligence in making senior levels of government and the public aware of the history of a problem of septic systems contaminating well water throughout the town…”.

        Some of the “current bunch” did have the guts to say “why are we barreling ahead when there is no evidence of a problem?”

        But the group with the guts certainly did not include Turner, and it didn’t included Close or Kirkland either.

        Was it current council’s investigation, as Turner claims, that allowed us to say “no proven need”?

        Not at all. There has never been a proven need. All the data from 1995 on said that there was no problem with septic systems of any significance, and certainly nothing significant enough to warrant the 70 million dollar sewers proposal.

        We knew all along that John Close, Jim Turner and Jay Kirkland supported the 70 million dollar sewers proposal not because of any problem, or because of any need, but rather because their Sauble Chamber of Commerce buddies and their developer buddies wanted the 70 million dollar project and wanted the residents to pay for it.

        Alice, pay Jim Turner no mind.

        Ray

      • Alice says:

        amartiannamedsmith said “Who told you that? Craig?”

        No, I can read and think for myself.

        Here is another example of poor business decisions…

        The Town has invested over $1,000,000 dollars in the last 4 or 5 years for “economic development”. What have we got to show for that investment? What new businesses have created jobs and boosted our economy as a result of that expenditure? Another $250,000 budgeted for this year … for what? We would be further ahead to create 5 x $50,000 a year jobs for people to “pick hemorrhoids off of Jabba’s butt” rather than wasting it on non-existent economic development.

        At a recent council meeting there was a presentation from the food bank where the presenter indicated there would be increased demands on the food bank in the future. When asked why he thought there would be increased demand the response was essentially that the prospects for an economic upturn in our town were dismal.

        The EDO position should be scrapped and the money put to better use. At least this council got rid of that arrogant and ineffectual Economic Development Committee.

        Alice

  3. saublejoe says:

    Craig, where the hell do you think this money should come from? We are all in this mess together. Sauble is part of a larger town, as is Oliphant. Your rants talk as if its each community is against Wiarton.

    Damn, take the words illegal and sue out of your vocabulary and your head would explode.

    We are a small tourist town within a bigger town. We have no jobs, will never have money, and yet you go crazy on the small stuff. If you would just shut up, quit going to court, and maybe get laid it would be better for us all. Your (past) rants in meetings and court cost us all.

    You sir, in my opinion, are only interested in compaining about this council, without really having a true point. Chicken Little?

    One day you may have a relevant post, but no-one will take it seriously.

    • cgammie says:

      Sauble Joe:

      You said: “Craig, where the hell do you think this money [for Oliphant refurbishing] should come from?”

      The 2006-era Oliphant upgrade cost $2,214,054. That’s $80,000 per connected property. The project should never have proceeded. Carl Noble and the Genivar engineers (and maybe MPW at the time) said the Ministry of Environment (MOE) forced them to combine and upgrade the two Oliphant systems. That was a lie. Carl Noble and the Genivar engineers said the MOE wouldn’t let people drill their own wells. That was a lie. Carl Noble and the Genivar engineers said the MOE wouldn’t let people disconnect from the communal system. That was a lie. Carl Noble and the Genivar engineers said they had properly considered alternative “solutions”. That was a lie. Carl Noble and the Genivar engineers knew that the 2006 project was the wrong way to go, but they hid the financial implications and deceived council and barreled ahead anyway in order to meet their stupid agenda.

      And they did so at great and unwarranted cost to the Oliphant water users and to all Sauble area water users.

      So maybe we should get that money back from the deceivers Carl Noble and the Genivar engineers.

      And instead of throwing good money after bad, maybe we should now consider alternatives. Maybe it makes more sense to shut the water plant down and have everyone drill their own wells. Maybe it makes more sense to shut the water plant down and have everyone convert to small wells serving only four or five properties (Phil Dwyer’s proposal). Maybe it makes more sense to sue Genivar. Maybe it makes more sense to keep trucking water from Wiarton.

      The thing that doesn’t make sense is making the general taxpayers pay.

      You said: “We have no jobs, will never have money, and yet you go crazy on the small stuff.”

      So do you want the local government to “create” a job for you? Do you want the local government to confiscate money from people who worked so hard all their lives to make a living and put a bit away for the future and use that confiscated money to buy you a job? Isn’t that the dreaded voice of entitlement? What makes you so entitled? Why don’t you take responsibility for yourself, instead of constantly crying: “I need the government to buy me a job; I’m entitled; I’m entitled, I’m entitled.”

      You said: “Your rants talk as if it’s each community against Wiarton”?

      Who said anything about Wiarton? Who said anything about other communities? I certainly didn’t.

      You said: “Your court cost us all”?

      Rubbish.

      It’s staff members dipping into the treasury without authorization and writing checks for lawyers that has “cost us all”.

      It’s John Close and his accomplices covering that up that has “cost us all”.

      It’s council giving money to lawyers when it is illegal to do so that has “cost us all”.

      It’s council and board members contravening the Municipal Conflict of Interest Act that has “cost us all”.

      It’s people supporting these raids on the treasury that has “cost us all”.

      It was council’s decision to fund Rhoda Cook’s pathetic lawsuit that has “cost us all”.

      It was council’s decision to fund Rhonda Cook’s pathetic lawsuit that could “cost us all” another million dollars to settle the outstanding counterclaim against the town.

      It was council’s decision to pass the indemnification by-law that will likely “cost us all” Rhonda Cook’s legal fees and settlement costs for the counterclaim still outstanding against her.

      It was council’s decision to fire the last MPW without legitimate grounds that “cost us all”.

      It’s staff’s willful contravention of the privacy provisions of Municipal Freedom of information and Protection of Privacy Act that has “cost us all”.

      It’s staff’s refusal to respond to legitimate and reasonable freedom of information requests that has “cost us all”.

      Don’t blame the whistle-blower. And don’t blame those honest citizens who choose not to cower to the bullies. Blame those who did the deeds.

      You said: “We [Sauble Beach] are a small tourist town.”

      “We” are nothing of the kind. “We” are the Corporation of the Town of South Bruce Peninsula. “We” are the corporate body. “We” are not a tourist town. Saying “we” are something that “we” are not is just another attempt to justify taking more money from “our” treasury, that being the treasury that “we” own, not as a “tourist town”, but rather as a corporation, that corporation being in the business of providing legitimate municipal services, that corporation being in the business of providing services within the boundaries defined by the Municipal Act, that corporation not being in the tourism business.

      You say: “You sir, in my opinion, are only interested in complaining about this council, without really having a true point.”

      With respect, I submit that it is you sir who has missed the “true point”.

      Craig

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