Thank you, Mr. Speaker. The Standing Committee on Governance and Economic Development met with the Minister of the Department of Public Works and Services and his staff on January 16, 2003, to review the department's draft main estimates for 2003-2004.
The committee noted a net $586,000 increase in operations expense for PW&S from their 2003-2006 business plans. PW&S explained that this net increase is due to a $35,000 adjustment in amortization expense and by the assumption of responsibility for the Fort McPherson water haul contract of $551,000. There were no changes in capital expenditures for the department from its 2003-2006 business plan.
Administration Fee Of 16 Percent To Communities
As previously stated in the general comments, the committee spent a considerable amount of time during the business plans exploring this issue and made two recommendations to the department in order to increase both community capacity and maintain consistent delivery fees. The first recommendation was for the department to not implement a planned seven percent increase in the administration fee the department charges the communities over and above the fee for any work provided by PW&S. The committee felt that the four communities affected by the rate increase would be caused undue hardship by the increase as they had not incorporated it into their yearly budget planning.
Further to this, the committee also recommended that the Minister approach the four affected communities with new draft contracts allowing for communities to contract out necessary repairs to their infrastructure, including current water and sewer services contracts with PW&S. During the last main estimates review, the Minister had stated that new contracts had been drafted and would be signed by communities over the summer of 2002.
During the main estimates review for 2003-2004, the committee asked if any of the four communities had new agreements with the department. The Minister stated that none had been signed. He also stated, however, that the planned increase of the administration fee to 16 percent was going ahead for implementation on April 1, 2003. To justify the increase, the Minister stated that he had been directed by the Financial Management Board Secretariat to obtain full cost recovery for all services provided to the communities.
The committee once again must state that it does not support any administration fee levied on work done by the department for communities. The committee is aware that the majority of the money spent by the community on services is ultimately recovered from the Department of Municipal and Community Affairs. The committee does not feel that it is appropriate for PW&S to unilaterally impose a charge which will ultimately come from another GNWT department. Therefore, the Standing Committee on Governance and Economic Development recommends that the Department of Public Works and Services immediately suspend all proposed increases to the administration fees charged to communities for water/sewer maintenance services until such time as the GNWT has a consistent process of charging administration fees for work provided on behalf of others.
In response to a letter from the Standing Committee on Accountability and Oversight, the committees were informed that the government has agreed to suspend the planned increase to the current administration fee of nine percent. Members are pleased to see that the government intends to further discuss this issue with the affected communities.
Evergreening And IT Services
As previously stated in the general comments, the GNWT has adopted a three-year replacement schedule for desktop computers called Evergreening. The GNWT stated that for desktop and presumably laptop computers, the government has concluded that a three-year replacement cycle is the best balance between functionality and cost.
The standing committee recommended in their report on the business plans that the government review this program and extend the three-year replacement schedule wherever possible. In their reply to the committee, the government stated that it will review the program but still regards the three-year replacement schedule as a necessary expense.
The standing committee reiterated their support for the extension of the current three-year replacement program in its recommendation under the general comments.
The standing committee also recommended in the report on business plans that the government consider the donation of computers deemed to be obsolete by the government to communities and non-governmental organizations. The Government agreed with this recommendation and stated that it would explore the options.
Members are aware that the knowledge management strategy will attempt to centralize and harmonize computer service and purchasing for the GNWT. The standing committee would like to be assured that there will not be excessive additional costs for IT services once the knowledge management strategy is fully implemented.
Delay Of Capital Projects
Members are aware that while funds have been approved in the House for several capital projects, many of those have been delayed far beyond what would be considered reasonable by members of the public.
Members are concerned that money that has been approved in the House should not be routinely carried over into future years but should be used at the time of its approval.
Two examples were brought forth by members. The curling rink in Aklavik was approved in the capital acquisition plan over two years ago, and yet the project has yet to be started. Another example of a carried-over project is the water plant project in Tsiigehtchic. Members asked for and received a complete list of capital projects and their current status from the department.
The standing committee is of the opinion that the delay of some capital projects causes vital government resources to be tied up while other capital projects languish due to a lack of funds.
Water Quality Concerns
Members are aware that there are a few communities that are concerned about the quality of their drinking water. Given the vital importance of this issue after the tragedy in Walkerton, Ontario, the standing committee would like to be assured that the department is doing everything possible to ensure clean, healthy water for all residents of the NWT.
During the review of the business plans, the committee asked about several boil water restrictions in prior months for several communities. The department stated that the alerts were put in place largely because communities were having difficulty taking water samples to a testing facility in the proper amount of time. The standing committee asked that the department assist remote communities with their delivery of water samples to testing sites to ensure water quality.
The standing committee would also like the department to thoroughly review the responsibilities for all testing of water done by the communities, GNWT departments and health officials. Members are aware that there were significant changes to the formula funding for communities over the past two years. There are concerns that some communities may not be aware of their current roles and responsibilities for the testing of water. The standing committee would like to be assured that water safety remains of utmost importance to the department.
Environmental Liabilities
The standing committee had asked during the business plan review for a timeline schedule for the clean-up of environmental liabilities managed by the department. Members were pleased to receive this list and review it. However, the department neglected to provide estimates of the costs associated with site clean-up. Members requested this information and it was provided.
Members noted that the government will likely be coming forth with a supplementary funding bill in order to address some of the larger site clean-ups.
Petroleum Product Revolving Fund
As Members reviewed the business plans for the department they were alarmed to see a projection forecasting the deficit of the petroleum product revolving fund to extend past its legislated limit of $5 million. The standing committee expressed their concern to the Minister who replied that he would likely have to approach Cabinet with a plan to write off some portion of the debt.
In the main estimates, however, Members were pleased to see that the department is no longer projecting a deficit past its legislated limit. The department stated that significant savings were achieved due to a mild winter season and significantly less money spent to subsidize fuel as well as having had the good fortune of an excellent winter road season last year.
The committee, however, remains concerned that should these mitigating factors change, the revolving fund will once again be placed in a precarious position. Members would like to encourage the department to carefully monitor the deficit of the revolving fund, but would strongly discourage the department from raising prices in order to stabilize this fund. Mr. Chairman, that concludes the Governance and Economic Development's committee report on the Department of Public Works and Services. Thank you.