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Joint services review seen as a bust by Woolwich

A project to find cost-sharing opportunities between the region’s four townships is unlikely to go any farther than the $100,000 they spent for a consultant, Woolwich council having found the final report short on useful ideas.

“When I read this report … nothing really jumped out at me that benefits us at all,” said Coun. Murray Martin following a presentation February 23 by KPMG’s Bruce Peever.

“I wasn’t really super stoked about this report,” added Coun. Patrick Merlihan, noting the lack of supporting data. “Based on this, I can’t see going forward with any of it.

“That’s my opinion based on this 12-page summary that cost the four townships $100,000. I’m a little outraged by that. I would say the recommendations are pretty weak.”

The report met with a lukewarm reception from Wellesley council that same night, having previously been pitched to Wilmot and North Dumfries councils. The townships agreed in 2019 to hire KPMG to help them find ways to find common ground on five areas of interest: fire services and emergency management, library services, information technology and corporate communications. The $100,000 cost was to be split four ways, drawn from money provided by the province under its Municipal Modernization Program.

Woolwich councillors were underwhelmed by the 12-page report presented to them, finding little in the way of true savings or efficiencies in the recommendations.

Where an interim report last year from the consultant found costs and services related to the Region of Waterloo Library as perhaps the most out of line in comparisons to other jurisdictions, the recommendations didn’t act on the issue of high costs and low usage from residents, Merlihan noted.

Councillors also panned the idea of selling the library buildings to the region. Currently, the Region of Waterloo Library provides the service, with the townships owning most of the facilities, with councillors arguing there would be few savings even if the region could be talked into buying the buildings despite its own financial issues.

The report outlines four different models of shared services the townships could use. That list includes resource sharing – a contractual arrangement between municipalities to share resources; centralized services – the relocation of multiple delivery sites or services to one centre; joint venture – establishing a stand-alone incorporated entity to share costs and risks of providing municipal services; and outsourcing – transferring key services to organizations from the private sector or external public sector entities.

Woolwich councillors were not convinced about the potential cost savings from any of the methods, nor about suggestions to jointly outsource services such as information technology and communications (neither Woolwich nor Wellesley has a dedicated communications position, with a joint venture actually leading to a net increase in costs).

Also recommended for outsourcing was emergency management, with  the report suggesting a contract with the cities or a  private provider at a cost of $125,000. In Woolwich and Wellesley, the fire department currently handles those duties.

In the overall fire budgets, the KPMG report recommends joint procurement to help reduce costs, with theoretical savings of $550,000 to $850,000 across the four townships, though there is already some cooperation on that front.

“The townships can implement strategic sourcing for the consolidation of their expenditures on fire by synchronizing their procurement requirements. So if you need to go out and buy hoses or bunker gear, you can do it at the same time and achieve some cost savings in a joint procurement. You can also avoid costs. So, working together, townships will have greater spending scale to negotiate the best prices and avoid potential mark-ups,” Peever told Wellesley councillors in a video conference.

Peever said in his experience, they would be saving 10 to 15 per cent by using this model. He also noted that savings would be greater for townships like Woolwich because they are significantly larger than Wellesley.

With Woolwich unlikely to move ahead, the report’s recommendations might be destined for a shelf. Chief administrative officer David Brenneman said he would be talking to his counterparts in the other townships to see what comes next.

“There’s probably no need for further exploration,” interjected Merlihan. “I can’t see moving forward.”

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