An unusual problem faced Meaford's council at their March 10 meeting – what to do with a much larger than expected surplus?
For much of 2013 senior municipal staff have anticipated a year-end surplus in their tax supported operating budget, but the size of the anticipated surplus grew throughout the year, and ultimately, the surplus announced on March 10 was a whopping $923,500 – some $400,000 more than the estimate given council late last year.
“The Second Quarter Report was presented to Council on September 9, 2013. The operating variance analysis contained in the report indicated that the anticipated surplus was going to be $251,000,” wrote Meaford Treasurer Darcy Chapman wrote in his March 10 report to council. “On October 28, 2013 a verbal update regarding the anticipated surplus was provided by the Treasurer which was then expected to be $400,000. Council directed through the budget deliberation that the surplus be used to fund Bridge #007 for $254,000, Waste Management staffing for $37,500 and $19,500 for audit and insurance costs for the hall boards.”
In November, council directed that a further $75,000 be allocated to enhance the 2014 road surface treatment program.
By December the anticipated year-end surplus was approximately $405,000.
While the $923,500 surplus reported by the Treasurer – all numbers quoted have yet to be audited – is much larger than was expected, Chapman told council that the surplus was not a result of over-taxing Meaford residents, but rather a number of one-time savings seen over the last year.
Those savings included:
$240,000 reduction in Legal fees,
$75,000 reduction in Human Resources contract costs,
$180,000 in salary gapping throughout the Clerks, Finance, Economic Development, Planning, Health & Safety and Fire Departments
$60,000 reduction in travel, training and conference costs
$50,000 in bank service fees and interest charges
“As well, the Municipality had additional revenues of $295,000 from PIL taxation as a result of continued efforts to stabilize the assessment roll relating to the Land Forces Central Area Training Centre properties,” Chapman told council.
As for what is to be done with the surplus, municipal staff provided a list of possibilities in their report for allocating the funds.
The recommendations from staff were to direct the Treasurer to transfer the 2013 Surplus as follows:
$254,000 into Roads & Bridges Reserve Fund for Bridge #007
$75,000 into Roads & Bridges Reserve Fund for enhanced surface treatment program in 2014
$37,500 into Waste Management Reserve Fund for student wage expenses in 2014-2016
$19,500 into Working Capital Reserve to be used to offset the 2014 audit and insurance costs for the Bognor Hall Board and Riverside Hall Board
$200,000 into Winter Control Reserve for future rate stabilization
$15,000 into Fire & Emergency Services Reserve Fund for future auto extrication equipment purchases
$342,000 into a new General Infrastructure Replacement Reserve Funds for funding of future Provincial and/or Federal grant funded projects
$282,600 into Policing Reserve for future rate stabilization
$12,000 into Water Rate Stabilization Reserve for future rate stabilization
$25,500 into Sewer Rate Stabilization Reserve for future rate stabilization.
Direct the Treasurer to transfer any remaining surplus upon finalization of all year-end entries into the Tax Rate Stabilization Reserve.
While council gave initial approval to the recommendations from staff, a final decision will not be made until the March 24 meeting of council.