KAWARTHA LAKES-At a special meeting held last week to update council on the municipality’s financial position, council heard the city will be faced with at least $2 million in provincial cuts to funding. There was also some good news as councillors heard the City had a $5 million dollar surplus in 2018.
Carolyn Daynes, Treasurer, reviewed audited financial statements for 2018 and announced a net surplus of $2.9 million after an additional $2.1 million was transferred to reserves. Daynes reviewed the factors that led to the surplus, noting:
- (Workers Compensation Insurance Board) WCIB claims came in lower than anticipated along with staffing efficiencies.
- Investment income was higher than anticipated.
- KLH Housing Corp. finished the year with a surplus of $549,000.
“I’m pleased that as a result of efforts between staff and Council, we returned the majority of the surplus to reserves to look after capital assets, water and wastewater infrastructure, affordable housing and other services. This will reduce the impact on taxpayers as aging buildings, equipment and infrastructure are addressed,” commented Ron Taylor, CAO. Council opted to apply up to an additional $800,000 in 2019 from this surplus to extend the lifecycle of various roads that are deteriorating faster than forecasted.
Jennifer Stover, Director of Corporate Services, shared with Council the factors affecting the 2020 budget including local pressures and significant changes in the funding model from the provincial government.
Stover outlined known reductions in funding in 2020 from the provincial government for various programs and services, including paramedic service, child care, long-term care, Ontario Works, Health Units and Library services. The minimum 2020 known budget impact from these provincial funding reductions is forecasted at approximately $2 million, or 2% impact on the tax levy.
Staff also advised Council that the provincial government is actively reviewing several other funding and service delivery models that will very likely impact local program funding and service delivery.
Ron Taylor, CAO, commented, “We need to place the bulk of one-time funds back into planned infrastructure upgrades and reserves. As the funding impact from other levels of government becomes known, we will be reviewing the service levels we can achieve with the available funding. In the fall when we have more information, we’ll provide an update on the long term plan to Council. Our priorities continue to be keeping property taxes affordable, predictable and sustainable.”
Director Stover reviewed the additional one-time funding of $725,000 from the Province for modernizing service delivery. Council adopted the recommendation to commit up to $75,000 of this funding to initiate service efficiency reviews and audits in 2019 to support modernization of services or cost reduction measures.
The City has received an additional $4.6 million one-time Federal Gas Tax payment. These funds are normally used by the municipality entirely for the Urban/rural Reconstruction capital program for roads. In a memo to Council, Mayor Letham stated, “It is important to balance infrastructure needs against the possibility of provincial downloads and funding reductions for next year. Until these amounts are finalized and budget pressures known, making use of $2 million to accelerate planned road infrastructure improvements and leaving the balance in the Capital Reserve is a wise business decision. This is a one-time funding allocation, and should be carefully applied for maximum effect.” Council adopted the resolution made by the Mayor.
Mayor Letham also put forward a resolution requesting staff to bring forward, in addition to a recommended 2020 budget in alignment with the City’s long-term financial plan approved by Council, additional operating budget recommendations that maintain 2019 tax-support funding levels. Council’s intent is to proactively plan for funding shortfalls in order to determine if any adjustments to service levels or long-term planning are needed in order to ensure smooth delivery of core services.
Council has also called for service agencies and boards that are funded by the municipality to review service delivery and target 2019 funding levels for future budgets.
Budget deliberations for the 2020 budget are tentatively scheduled for November 2019.
