The Park Districts Service Fee System

The WCA has been working hard for over ten years to have the Park Districts Service Fee system made fair, transparent and equitable. Manitoba Conservation’s position has been that a slow approach should be taken in revising the system. Of course it was not eager to change a system that had much of its appropriate share of service costs borne by other park user groups.

Throughout this period our efforts have also been vigorously opposed by business associations in the park which have rejected anything other than maintenance of the status quo. This is understandable given that, when the system was implemented, businesses were reportedly given the opportunity to individually negotiate favorable service fees, based on what each was willing to pay in a simple low-medium-high usage system. After government and business decided what amounts they were comfortable paying for their respective operations, the balance of all service costs was allocated primarily to cottagers.

The problem is that where the government decides to subsidize a particular user category, that expense is expected to be offset by increasing the revenue collected from other user groups in a park. This has been accomplished through the unfair and arbitrary park share systems, whereas such subsidies should be funded by the province as a whole.  It is essentially a system of taxation without representation and with no one to be held accountable as the affected cottagers’ votes are spread over a multitude of provincial electoral ridings. There is no functioning formal mechanism to guarantee that the input of those who are being taxed will be given due consideration.

It is a point of interest that, even though the Parks Branch of Manitoba Conservation behaves as if to balance revenue and expenses internally, fees collected in Manitoba parks do not necessarily go back into those parks. This includes the controversial vehicle permit fees which may be reinstated for 2012. All fees collected are placed into the province’s General Revenue account and then allocated as the governmentsees fit.

Over the last several years there has been some government activity on revising the Park Districts Service Fee system. This has been in response to the initiation of legal action against the Government of Manitoba by the WCA as a result of the current government’s continued refusal to comply with section 18(2) of The Provincial Parks Act with respect to holding annual budget consultations with cottagers.

Government claimed that its previous accounting system was inadequate, so a new expense recording system has been implemented to ensure that nothing is missed, down to the last brush cutter blade.  This was to ensure accountability and appropriate apportionment of service costs.

It appears that this government intends to impose another system under which cottagers will continue to subsidize other park users.  Information gathered to date from Manitoba Conservation and its publications suggests that cottagers should be concerned about the fairness of the proposed new Property Service Fee System (PSF).

We have also been informed that capital expenditures on new infrastructure will now be recovered through the PSF system on an amortized basis. In addition, existing infrastructure will be brought into the PSF system in order to recover the ongoing capital costs associated with past projects. Parks Branch is determining how far back they intend to go in this regard. All those in a service district will pay for that infrastructure whether or not that service is available to their property. This is contrary to what is stated on Manitoba Conservation’s PSF web pages (see “New share allocation method“). This represents a new source of revenue for the government. The inclusion of existing infrastructure will necessitate that we have access to Manitoba Conservation’s detailed accounting records in order to determine the true cost and amortization status of that infrastructure.

Although it has been published that neither category of user or user location will affect share assignment (“New share allocation method“), different methods of calculating share assignments are to be used for different categories of users. In other words, a user’s share allocation will depend on which formula is used for that user category. It has been proposed that share assignments for cottagers will be determined based on capacity rather than intensity of use. This is the primary reason for the “bedroom survey” that we all received. Cottagers will also be expected to declare which seasons they use their cottage as part of the proposed formula. Actual occupancy level will not be taken into consideration for cottagers. Full-time residents will pay an additional levy.

We have not been informed as to what service fee system model has been proposed for businesses, only that, in general, businesses have been reluctant to provide information necessary to its development. It is the opinion of the WCA that the same method of share determination must apply to all user categories in order to achieve a fair apportionment of service costs.

Any formulae used must reflect intensity of use in order that the system is fair, equitable and transparent with respect to the treatment of different user categories and the relative loads that they place on services and infrastructure. For example, will a 3 bedroom cottage that is utilized 112 person nights annually(28 days X 4 people) equate to 3 bedrooms at a hotel that are utilized at a rate of 720 person nights annually (120 days X 3 rooms X 2 persons per room)? How does the cottage capacity formula equate to the formula used for a convenience store, a golf course, or a restaurant?

We have been advised that some user groups such as Special Consideration Organizations (SCO) will not be required to pay their full share of service costs under the new system. They are to be subsidized by Manitoba Conservation. This infers that share allocation must still be accurately and fairly determined for those users and that a portion of those shares be added to those allocated to Parks Branch operations. These shares must remain a separate line item distinguishable from those directly attributable to Parks Branch. This is a better approach as long as any subsidy is provided by the province as a whole and no attempt is made to recover the additional expense to Manitoba Conservation through the PSF system or other fees charged to cottagers.

Such treatment of the SCO issue would be a step forward, but this government should also subsidize businesses in parks more directly where such subsidization is deemed necessary, rather than manipulating the PSF system so that cottagers solely pay for that subsidization. Removing subsidization from the PSF system will restore it to the realm of accountability to the electorate of Manitoba.

Service District Committees have been proposed as part of the new system. These committees will function in a consultative capacity only. There will be no votes and they will hold no authority. Representation on the committees will not be proportional to the total percentage of service costs that each stakeholder group is responsible for as has been previously stated to the WCA. As a stakeholder, Parks Branch will have representation on these committees. It has also been made clear that Parks will continue to be the final decision maker (see “Service provision“) in all matters with no recourse of appeal available to service fee payers.

We are informed that options have been prepared for government and that the final decision as to what models are utilized for the new PSF system will be made by the Minister of Conservation and his cabinet colleagues.  Those proposals include; resumption of consultation without government providing expense details, or simply imposing an equal levy on all provincial park cottagers regardless of services received, with the funds deposited to the province’s general revenue account.  Either proposal would constitute a “cottage tax”  rather than a service fee system. In fact, that has been the status of the current system for the past decade since government decided to disregard the requirement for consultation as provided for in section 18(2) of the Provincial Parks Act.

Related Links and Documentation

The Parks Act
Manitoba Conservation – Property Service Fee System web pages
Manitoba Conservation- Property Service Fee System review project
PSF Review- Request for Proposals document