Council facing big budget shortfall

With the town facing an operating shortfall of more than $2 million in the draft version of its budget, council will have to make some hard decisions in the near future.
In a verbal report to council last night, town treasurer Laurie Witherspoon said the draft version of the 2013 operating budget indicates a shortfall of $2,288,843—representative of a 22.15 percent residential levy increase which council will work to reduce in the coming weeks.

This shortfall does not include any consideration for an increase or decrease to the Rainy River District Social Services Administration Board levy, nor any consideration of capital long-term debt or the fire department post-retirement benefit unfunded liability of $244,706 as Dec. 31, 2012.
But it does include the recent mill assessment appeal settlement impact of $1.763 million ($2.111 million minus the education tax component).
“Clearly, there is a great deal of work before us to balance the needs of the community and to make the tough decisions required to balance this year’s budget,” said Witherspoon.
The draft capital budget, meanwhile, stands at $5,742,600, of which about $1.3 million will be paid through long-term debt.
The balance will be covered through federal and provincial grants, federal gas tax funds, corporate reserves, and water and sewer reserves.
Council will tackle the draft budget again at a meeting March 4, with more to be scheduled after that.
Witherspoon said mayor and council will “have ample opportunity to effect changes” to the budget, as well as “determine affordable levels of service through active participation” at those budget meetings.
Fort Frances CAO Mark McCaig said the town recently reached a joint agreement with Resolute Forest Products to resolve outstanding assessment appeal complaints regarding the company’s mill here, and that the town and company were able to mitigate the effect of a potential Assessment Review Board decision.
He added the reassessment process turned out far worse for Dryden and Espanola.
But the $1.763-million settlement still has a significant financial implication on the budget.
“It’s going to be our biggest challenge to date this year to try and balance this budget,” warned McCaig.
“Some of the toughest decisions that we will ever make in our tenure as councillors and mayors and administrators are undoubtedly going to have to be made over the next several weeks.
“In regards to the organization, it’s not all doom and gloom,” he stressed. “We have practised pretty conservative fiscal restraints and practices in regards to the way we’ve done business.
“We’ve begun the process the last couple years of putting money away for various projects, and that does hold us in good stead,” McCaig noted.
The town also has employed an informal program of attrition in recent years and the staff is smaller than it was 10 years ago.
“But that doesn’t eliminate the possibility that we’ll have to re-look that again,” said McCaig. “The only thing is, is that through getting smaller, you get to the point where if you’re contemplating any reductions in staffing, it will probably have a service implication.
“So that’s a balancing act that mayor, council, and administration are going to have to be cognizant of over the next couple weeks.”
McCaig added the town understands where the community is at, and that many individuals have lost their jobs, and the town will work its hardest to spend money prudently, save money prudently, and make reductions prudently.
He stressed that whatever tax increases come out of the budget process, they will be “nowhere near” the 22.15 percent residential levy increase mentioned by Witherspoon.
“I encourage everybody to use caution in speculating exactly what the town’s going to do,” McCaig remarked.
“We’re going to try and be as compassionate as possible, but also going to be as prudent as possible with the taxpayers’ money.”
Mayor Roy Avis vowed council will be “very, very thoughtful going forward and we’ll deal with this as prudently as possible.”
“We’ll try to come up with the best bang for our buck,” he added.
An abbreviated version of the 2013 draft budget is available at the front counter at the Civic Centre.