Town socking away surplus

Duane Hicks

With the possible financial impact of an assessment review board hearing for the mill property still looming on the horizon, town council agreed yesterday to set up a corporate contingency reserve fund to help soften what could be a massive blow.
In a report from treasurer Laurie Witherspoon, she noted the town ended 2010 with a surplus of $318,033.97.
Normally, any operating surplus over $25,000 at the end of a fiscal year is transferred to corporate reserve funds for future capital replacements, to acquire capital assets, and to provide flexibility to manage debt.
But with the town potentially having to foot a mill assessment appeal write-off for the 2009-11 taxation years in the amount of $2.2 million, coupled with an additional annual loss of $800,000 in tax revenue going forward, Witherspoon said in her report that “it would be prudent to establish a contingency reserve fund to help fund the outcome.”
Fort Frances CAO Mark McCaig noted the town also is projecting a surplus for 2011, and the Administration and Finance executive committee will take a look at setting that money aside in the contingency fund.
“I think it’s very prudent,” said Coun. Andrew Hallikas.
“I think we must do this,” agreed Coun. Paul Ryan.
Meanwhile, the town will not resort to long-term debt to pay for capital projects this year, with all of the $4.5 million in projects to be paid out of reserves or through grants.
Council received an updated preliminary capital budget yesterday, which management trimmed by $4.6 million since the Jan. 16 committee of the whole meeting.
Mayor and council then reduced the capital budget by a further $230,000 at yesterday’s meeting.
The 2012 preliminary operating budget currently shows a deficit of $298,294 (which still may change as the town hasn’t yet gotten a confirmation of its apportionment of the Rainy River District Social Services Administration Board levy for 2012).
At its stands today, the town is looking at a 3.04 percent residential levy change.
This equals an increase of $13.99 per $100,000 of assessment if your property assessment is staying the same this year, or an increase of $65.05 per $100,000 of assessment if your property assessment is changing.
Coun. Ken Perry clarified the preliminary municipal tax rate increase is, in fact, 4.057 percent.
But due to a decrease in the education tax rate, it only ends up being a 3.04 percent residential levy change.