As I have done every year, I have spent some time in review of the Audited Statement for the Municipality of Meaford for 2013. Although the level of detail in audited statements for 2013 is less than in the budget, I find it is still a worthwhile exercise to study these audited statements.
I offer my observations to your readers as follows:
The municipality budgeted for a surplus of $3,823,807 (budgeted revenue of $19,374,836 with expenses of $15,551,029), but only had an actual surplus of $1,628,788 because four departments went over their budgets by the amounts as follows:
Protective Services was $106,261 under budget. It includes such things fire and police services and cost $3,135,156 in 2013.
The municipality’s Ontario Municipal Partnership Fund (OMPF) decreased by $50,600 in 2013 and will continue to be reduced in future years.
An important thing to note here is that Section 290(2)(b) of the Municipal Act states: “The budget shall provide that the estimated revenues are equal to the estimated expenditures”. In other words, a municipality cannot budget for a surplus or a deficit.
LONG TERM DEBT
The municipality paid a net amount of $752,682 on the long term debt (some new debt was incurred and some long term debt was discharged).
The total long term debt at the end of 2013 was $9,906,947 broken down as follows:
Water & Sewer (user pay – primarily the Town of Meaford) $3,857,580 or 39% of total remaining debt
Leith Water $498,826 or 5% of debt
Fire Truck (Meaford & District fire department) $144,907 or 1.5% of debt
Meaford Hall $2,695,527 or 27% of debt
Roads (throughout entire municipality) $1,240,667 or 12.5% of debt
Various capital projects (throughout the municipality) $1,351,165 or 13.6% of debt
Tile drainage (owed by property owners not the municipality but recognized on municipal statements) $118,275 or 1.2% of debt
The municipality has unpaid taxes of $1,353,131, up only $2,351 from 2012.
The municipality has un-drawn credit facility (line of credit) of $3,800,000.
Did you know that the municipality has approximately 28 more years of monitoring and post closure costs for the Centre Street landfill estimated to cost $146,800 with $96,616 recognized in 2013 and $50,184 yet to be recognized in the financial statements? This landfill closed in 1992.
The total cost for the library was $506,582, over budget by $13,882 and up $16,676 from 2012.
Salaries & benefits were $383,574, or 75.7% of total cost.
SALARIES & BENEFITS
The salaries & benefits were $6,135,440, or 47.35% of taxation, by far the highest expense for the municipality.
Temporary investments were $3,518,046, up $3,495,328 over 2012.
Long term investments were $2,563,553.
RESERVES & RESERVE FUNDS
Reserves & reserve funds were $6,188,126, up $2,883,940 over 2012.
Of that amount $1,778,256 are obligatory reserve funds as follows:
Development charges $1,086,187
Recreational land 99,697
Federal gas tax funding 257,724
MTO transit funding 331,623
The cemetery trust fund is owed $71,863 from the general account. The general account has owed money to the cemetery trust fund for about four years.
I hope these observations give the readers a better understanding of the financial position of the Municipality of Meaford.
Dianne Charlton, Annan
The municipality did not budget for either a surplus or deficit in 2013 and therefore maintained compliance with Section 290 of the Municipal Act. The budgeted expenditures mentioned ($15.5M) does not include Capital, debt principal repayments and reserve transfers.
There was not an “actual surplus of $1.6M” The allocation of amortization to departments can create this impression but is only a paper exercise given that depreciation of assets is a non cash function of generating financial statements that comply with Public Sector Accounting Board (PSAB) standards.
Salaries and benefits are better reflective of the entire budget given they include tax, water/sewer and user pay supported functions. Although still the highest expense, is closer to 30% ($6.1M / $20.3M)
The general fund will always owe the trust fund money when looked at in the financial statements. This is due to the fact that financial statements are a snapshot as of December 31 of a year.