After agreeing to transfer $1.81 million from reserve funds to finance the 2002 year-end deficit, town council looks to be on the road to more financial woes this year with a possible deficit of almost $1.3 million.
As requested by council, treasurer Peggy Dupuis and the management team compiled a budget report of town finances up to Aug. 31 of this year, and presented them to council last Friday.
These findings, which show more over-estimated revenues and other financial errors, just as those found in the 2002 year-end, then were discussed at a special committee of the whole meeting Tuesday afternoon.
Areas with shortfalls identified so far include:
Corporate
•payment in lieu of taxation—$19,475;
•capping—$82,000; and
•Rainycrest—$582,167
< *c>Administration and Finance
•investment income—$355,000;
•licences and fees—$44,976;
•service charges—$46,700; and
•interfunctional transfers—$298,300
< *c>Community Services
•capital projects—$5,500;
•OPP contract—$49,500;
•Children’s Complex—$18,036;
•transportation—grants to other—$7,000;
•long-term debt payment—$100,000; and
•public library—$3,200
< *c>Operations and Facilities
•capital projects—$103,054;
•Public Works (Operations)—$686,256;
•Connecting Link—$18,600;
•street lighting—$9,000;
•airport—$52,300;
•parks (payroll burden)—$81,000;
•sewage treatment—$43,290; and
•waterworks (interfunctional transfer)—$95,300
Operations and Facilities saw these deficits reduced to a total of $284,800 with a transfer of $95,300 out of the waterworks budget and interfunctional transfers totalling $708,700.
Planning and Development saw no deficit, but instead a surplus of $11,300 thanks to a series of new start-ups, such as Wal-Mart.
But town departments have been looking to make up for the deficit, and have been slashing all capital projects that were slated for this year.
For instance, Community Services manager George Bell noted work on a ball diamond at St. Francis Sportsfield will have to wait until next year.
Meanwhile, Operations and Facilities manager Doug Brown said work at the airport, road works, a master plan for the cemeteries, and the repairs at the waterfront boat launch, among other projects, have been put off for the year.
And town management will continue to work hard to address the deficit.
“We’re looking for some clarifications, and perhaps some recommendations about how we can address this deficit,” acting CAO Mark McCaig said at the meeting’s adjournment, just after the committee of the whole agreed to meet again next Tuesday at 4:30 p.m.
“We’ve got to do some better formatting for our budget,” he added. “We have to see if there’s anything we can do to mitigate the impact, and see what we can do about this deficit before the end of the year.”
McCaig and the management team will meet at least once prior to next week’s budget meeting to work on this.
McCaig said while the looming deficit undoubtedly is a problem, it could be seen as a valuable lesson for the town.
“In some respects, what we’re doing now is going to enhance the 2004 budget when all is said and done,” he remarked. “I think the corporation is finally getting a handle on projecting realistic operating costs.”
As first reported in the Sept. 10 edition of the Times, the 2002 year-end deficit was caused by a number of factors, including over-projected revenues and transfers from reserve funds that were not completed.
Over-projected revenues made up $1.2 million of the deficit, and included a projected $550,000 surplus from 2001 that did not exist.
Money that was not transferred from reserves totalled roughly $450,000.
That deficit was revealed during the committee of the whole meeting Sept. 8 following a verbal report from the town’s auditor.
The written auditor’s report is expected Oct. 14, along with what is called a “management letter”—which is the auditor’s recommendations to prevent a re-occurrence.
(Fort Frances Times-Daily Bulletin)
Fort Frances Times
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