Preliminary budget showing a shortfall
As town council and administration get ready to begin their bi-weekly budget meetings Jan. 20, it already looks like there will be some challenges ahead.
Council received the preliminary 2014 operating and capital budgets at its regular meeting this past Monday, with the former indicating a $360,075 shortfall.
The shortfall does not include any consideration for the Rainy River District Social Services Administration Board’s levy increase or decrease, nor items presented during the public budget meeting held Sept. 9, she added.
It also does not include any new capital long-term debt, the fire department’s post-retirement benefit unfunded liability of $236,010 as of Dec. 31, 2013, or any tangible capital asset amortization or any surplus or deficit for the 2013 year-end.
“There is a great deal of work before us to balance the needs of the community and make the required decisions to balance this year’s budget,” noted Witherspoon.
A big part of the shortfall can be attributed to a revenue decrease for the town to the tune of $498,671.
The reduced revenue is a combination of factors—ranging from a decrease in the Ontario Municipal Partnership Fund and a reduction in tax revenue to election expenses and a change in contributions to reserves.
In other areas, the operating budget has gone both up and down.
The draft version shows:
•a net decrease of $16,357 for the Administration and Finance division;
•a net increase of $172,755 for emergency services;
•a net decrease of $103,211 for the Community Services division;
•a net decrease of $208,044 for the Operations and Facilities division; and
•a net increase of $16,261 for the Planning and Development division.
(The shortfall amount of $360,075 is calculated by adding together the corporate revenue decrease and the net increases, then subtracting the net decreases).
Meanwhile, the preliminary capital budget sits at $10,596,405.
It is not yet complete as there will be items added for the Fort Frances Children’s Complex after confirmation of DSSAB funding for the day care, noted Witherspoon.
She said at this point, the long-term debt of $2,706,919 is entirely for road projects and Public Works’ large equipment.
An estimated $4.4 million of the capital budget will be paid for through a combination of federal gas tax and various town reserve funds.
Another $1.9 million will be funded by federal and provincial grants, as well as contributions from other sources.
The water and sewer balanced budgets are incorporated in the preliminary budgets but do not have a direct impact on the general operating budget, noted Witherspoon.
These are stand-alone utilities supported by respective rates and do not directly affect taxation, she added.