The City of Lévis does not rise as high as it thinks on the podium of large Quebec cities in terms of finances. The Auditor General’s (AG) report mentions a less rosy than announced financial balance sheet and poor management of long-term budget projections.
In his 118-page report presented Monday evening, Yves Denis cools several claims trumpeted by the administration in place and which erroneously elevate Lévis to the rank of first class in the province.
In particular, the auditor general defends the city’s interpretation of certain financial ratios, which leads “to an overvalued assessment of reality”.
Mayor Gilles Lehouillier’s administration often places Lévis “in 1st place among large cities for the lowest expenditure per assessment unit, 1st place for the lowest indebtedness on standardized property wealth (RFU) and 1st place for lowest overall tax rate among the five comparable cities”.
On Monday, the VG put a stop to these inclinations.
Lévis only takes into account the evaluation unit to plot the average of its expenses, underlines the report. However, a unit often includes several apartments: by doing the same calculation, but on the basis of housing, Lévis no longer arrives first, but 7th among the 10 large cities of Quebec.
Ditto for the overall tax rate: the City claims to be at the top of the list, without taking into account the average value of buildings in each municipality in its interpretation. “It would be more relevant, indicates the VG, to use the average tax burden per dwelling” to avoid artificially inflating the performance of Lévis.
The auditor general also deplores the use of property wealth standardized by Lévis to establish its position in terms of indebtedness. The City is the only one of the ten largest municipalities in Quebec to take this measure into account. “The RFU is primarily a reflection of the market [et] this ratio is insignificant,” the report concludes. Its use induces “a perception of being in control [de la dette] although this is not necessarily the case. »
“The indicators used are authorized by the Ministry of Municipal Affairs, explains the president of the finance committee of Lévis, Isabelle Demers. We did not create indicators. »
The Mayor recalls that these ratios have been in use for a long time in the City. “No objection to get back to the page, on the other hand”, he specifies.
Baffled beacons
The AG’s report also reflects a lack of rigor in respecting the budgetary framework adopted by the executive. In 2016, the City set limits to control its borrowing. She never respected them, underlines the report, without providing explanations “to justify the difference”.
“Neither the 2021-2025 financial plan nor the three-year capital expenditure programs (PTI) are established within the financial guidelines relating to borrowing levels set by the executive committee,” continues the auditor general.
However, during the presentation of its most recent budget, last December, Lévis claimed that its PTI “respects in all respects the borrowing and indebtedness targets set by the City. »
Lévis’ general manager, Simon Rousseau, explains that the auditor general relies on “the data in theoretical form. It is not the actual figures spent each year, which normally falls within the targets that we have agreed upon. »
Economic hazards such as inflation inflate bills and push the City, “as a good manager of the last public”, to abandon certain projects. “Often, we do not spend what we had planned in terms of targets,” adds Mayor Gilles Lehouillier, who has noted, for several years, that certain calls for tenders do not find any bidders.
Finally, the report denounces the lack of information provided to citizens, who do not have access to the detailed budget. “The City does not always provide enough detail to explain how the funds it manages are used. […] The information provided does not reflect the City’s overall financial situation or its actual performance. »
Journalists, when they read the most recent budget last December, had in hand an 8-page summary containing 13 graphs and very few details.
A requested plan
The only elected official of the opposition to the town hall, Serge Bonin, denounces these ways of doing things.
“I have to commit my responsibility to an 8-page summary to orchestrate a budget of $333 million,” criticizes the Repensons Lévis adviser. I feel, as an elected official, excluded from the process and faced with very sketchy results. »
The mayor of Lévis intends to remedy this situation next year. “On budget night, the big, fully detailed brick, we’re going to make it public,” Lehouillier said. We thought that the information given was sufficient. »
Mr. Bonin is also worried about the large debt dragged by Lévis, which ranks the municipality at the bottom of the Quebec pack in this regard. “The desirable debt-to-income ratio for a city is generally around 100%, while Lévis is at 144%,” said the Repensons Lévis councilor in a press release. Lévis’ debt-to-income ratio ranks us 9th out of the 10 largest cities. »
Mr. Bonin also deplores “that a debt management plan still does not seem to exist, despite the fact that it has been named at press conferences for nearly 5 years. In his report, the Auditor General points out that his office has been recommending the adoption of financial management policies since 2007.
“Some important recommendations have still not been applied to date, in particular an infrastructure renewal policy, writes Yves Denis in his report. Consequently, the City’s approach does not provide the assurance that the projections made are shared and realistic. »
Recommendations
The Auditor General makes several recommendations to the City, in particular to develop and update a long-term financial plan, to tighten the supervision exercised by the authorities on the budgets and to attach the assumptions on which the revenue and expenditure projections are based. issued by the administration.
“For the time being, the plans and projections produced give him, as well as the stakeholders, a false impression of control because the underlying reflections are not sufficiently advanced,” concludes the Auditor General.
The Lehouillier administration “positively” welcomes the report’s recommendations and undertakes to prepare a detailed plan and a timetable for carrying it out.
“We are committed to assuming the positive leadership necessary to prevent the fate reserved for the recommendations of 2007 and 2010 from happening again”, promises the administration.