Town management and administration have been able to reduce a shortfall in the 2003 budget from almost $1.5 million to about $515,000 after spending three weeks going through the books and tracking down accounting errors left by former municipal staff.
“It doesn’t look as bad as we thought,” treasurer Peggy Dupuis said after a special committee of the whole meeting late yesterday at the Civic Centre.
“There were some issues we just couldn’t identify, things weren’t clearly marked, ‘This is for this, this is for that,’” she added.
The exact amount is $515,566— $399,095 of which is due to underestimated operating costs, with the balance resulting from capital expenditures, noted Dupuis.
In addition, the town’s total yearend reserves, at this point, should be $5,443,775.
But the town is looking to have to shell out around $2.3 million to pay its share of various projects, including some that were put off from the 2002 budget, such as Front Street, the Portage Avenue underpass, Fifth Street storm sewer, sidewalk work at numerous locations around town, La Verendrye Parkway, renovations to the arena, and more.
But all the numbers are likely to change again as more and more errors are found daily, said Dupuis.
“It’ll be nice when we can get out of this forest,” said Mayor Glenn Witherspoon.
“We’re closer,” echoed acting CAO Mark McCaig.
While the numbers continue to be crunched, council now has to decide how to pay for the projected shortfall in 2003 and its other bills before Nov. 30—the day before the newly-elected council takes over.
The options include pulling from reserves, borrowing money, or doing a combination of both.
“We balanced our budget last year [2002] by taking out of reserves,” noted Coun. Roy Avis, adding he was wary of depleting them when knowing if there will be enough for any future emergencies or unforeseen expenses was impossible.
“I think council has to stick to a low-end as to where want to be with the reserves,” agreed Coun.
Deane Cunningham, adding the town should budget for surpluses in the future and put that extra money into a reserve fund by strict principle.
On the other hand, he said it doesn’t make sense for the town to build reserves too high. Citing the money used for the expanded Memorial Sports Centre, he added “the people who created those reserves never even got to use the money.”^Mayor Witherspoon mentioned “$4.5-$5 million is the magic number” when referring to a desirable levels for total reserves.
McCaig noted as a point of interest that the town has “some pretty big borrowing power.”^Councillors agreed they wanted to see more information regarding interest rates for borrowing money— and a better picture of what the impact of drawing any more from existing reserves would be— before they go any further.
The next 2003 budget meeting is Friday (Oct. 24) at 11 a.m. to discuss the 2003 finances.
Fort Frances Times
Local News from Across the Rainy River District
