Council making cuts to budget

Fort Frances council and management have begun to make cuts in the 2006 preliminary operating budget, seeking for the town to operate as efficiently as possible despite declining revenues.
The committee of the whole met Monday evening for a special meeting to start making some tough but necessary decisions, said Fort Frances CAO Mark McCaig.
“We went through the capital budget and we identified that there’s a significant part of it that was unfunded—I believe it was $2.7 million-plus,” he said. “And there was a realization some cuts have to be made.
“All the recommendations that were brought forth from the managers and their respective executive committees were prudent recommendations and observations made about capital works that should be undertaken, whether they be the replenishment of rolling stock, upkeep of roads, sewer and water, or the renovations of facilities,” added McCaig.
“But we’re at a position where they’re not all going to be undertaken. And that’s what happened [Monday] night—some were cut or the amounts reduced.
“That was the first walk-through of the capital budget,” McCaig said. “We’ll be addressing it again, making decisions about the projects that we do undertake and how we’re exactly going to fund them.
“But I foresee there will be some more cuts in addition to the ones we made [Monday] night.”
A couple of examples of cuts from the budget were the sprinkler system at the ’52 Canadians Arena, as well as some vehicle and equipment replacements.
“They weren’t frivolous items,” McCaig stressed. “We’re talking about, in some cases, half-ton trucks that were 15-16 years old. Major equipment that’s over 20-plus years old and really needs to be addressed.
“Things that are really crucial to operation of the town.”
McCaig noted a lot of things council is still looking at are projects that already have significant provincial funding going towards them, like the “Connecting Link” highway repair projects and museum renovations.
“From an asset management standpoint, we look at priorities—what has to be done now and if there’s an opportunity to diminish the cost somehow,” he said. “Whether we can get provincial grants.
“We put those at the top of the list.”
McCaig also said the public has to realize the town’s ability to raise revenues is diminishing all the time as more and more property assessment appeals are being made on a nearly weekly basis.
“That eats away at our bread and butter, which is taxation,” he explained. “It reduces our ability to generate enough funds from taxation alone to make our operations subsist.
“That’s when we have to look at user fees and everything else. Municipalities don’t have a lot of options when it comes to raising revenue,” he remarked, adding municipalities do get funding from the province but this isn’t enough.
“But other than that, we have to look at ways of becoming more efficient,” said McCaig. “As we can see from our neighbours—Kenora, Dryden, Atikokan, Thunder Bay—there’s significant pressure on northern communities.
“Although there hasn’t been anything substantial happen at our mill yet, we’re finding things are very tough,” McCaig admitted. “We’re looking at ways of becoming more efficient.
“Everybody has to appreciate that—we have to look at ways of providing the services we provide at less cost.”
McCaig noted other aspects of the municipal budget, such as sewer and water and rates, still are up in the air.
For instance, while there’s a proposed 10 percent sewer and water hike for all classes being recommended by management to cover the costs of running those utilities, council still has to deliberate on that increase.
“There’s no increase in the user fee schedule, but that is an alternative that we will take a long, hard look at,” McCaig said. “I’m not going to say it’s going to happen, I’m not going to say it’s not going to happen.
“We’re at very preliminary stages. We’re working our way through the wilderness and everything’s still on the table,” he stressed.
McCaig noted people have to realize the town currently isn’t employing an asset management system whereby it’s operating forecast supports capital spending.
“We’re not putting any money into reserves, we don’t have any contributions to our capital budget from our operating budget,” he remarked. “We have to get to a place where our activities on the operational side support prudent capital measures.
“We’ve been in this downward spiral for a significant amount of time. These things have to be addressed somehow,” he said.
“It’s pretty important to realize, ‘Yeah, we’ll balance the budget this year,’ but measures have to be taken to address the long-term,” McCaig added. “We cannot continue to not have a plan in regards to how we’re going to undertake prudent capital measures.
“My concerns aren’t short-term. My concerns are long-term.”
As previously reported, McCaig said uncontrollable costs, such as the levies for Rainycrest and Rainy River Social Services Administration Board, still have to come in early next year—and could have a significant impact on the budget.
Fortunately, said McCaig, the town does know there won’t be an increase to the Northwestern Health Unit levy in 2006.