Is performing better than budgeted bad? NO! Being harshly criticized for having a better than planned fiscal position through a pandemic? That’s a new twist I am not used to!
2020 was one of the most peculiar years on record for reasons we are all well aware of. The pandemic has affected so many aspects of our lives, and our municipal financial position is another one. Through the pandemic there were many unknowns.
What has been recently reported in the Morinville Free Press, a local paper, that the Town of Morinville is projecting a $1.6M surplus, is simply not accurate. Yes, we have performed better than budgeted, on the tax supported side of the ledger, but we are still looking at a deficit position to end the year for our tax-supported operations.
Why are the results “better than budgeted” you might ask? Included in this are $888K of funding from the Federal and Provincial Governments intended to support municipalities experiencing significant operating impacts do [sic] to the COVID-19 pandemic. Had the Town not received this support, our position would be much more dire. Additionally, our facilities were closed for much of 2020 and many staff were affected by temporary layoffs. These layoffs resulted in savings of approximately $590,000. Furthermore, as these facilities were closed, revenues from rental fees and program costs took a significant hit.
Long and the short of it – even with the decisive action taken by Council and the additional funding provided by the orders of Government, we are expecting a deficit in the tax-supported budget.
Are we in a better position than planned? Yes. With the dust beginning to settle, actuals are showing that overall, the Town of Morinville is in a “better than budgeted” position to the tune of $1.6M.
Are we out of the hole? No. Administration is still projecting a tax-supported deficit of $194,000 for 2020.
Bottom line, when you are spending more than you are making, you need to take action. Although the consolidated budget shows a modest surplus, this is only due to utilities being in a surplus position. These funds are intended to maintain and upgrade utility infrastructure to support a growing community, and you can’t rob the piggy bank to cover the monthly bills.
Council had difficult choices and had to make some tough decisions. Recognizing this deficit position and the desire of residents to ensure that community service levels remain steady after the pandemic, a 1 % tax increase amounting to an average of $2.08 per month for residents was approved. The 2021 budget still does not accomplish Council’s goal of a balanced tax supported budget. However, we understand the needs and desire of the community to keep tax increases low, and that is why we made the decisions we did.
To illustrate the work Council and Administration undertook, the 2021 budget deliberations included $921,600 in budget reductions were made, first by Administration, who by sharpening their pencils reduced expenses from 2020 in a variety of areas by a total of $629,133 before it even hit the Council table. Then by the third reading, Council cut an additional $292,487, including further expense reductions, cutting Council’s budget, and reducing new initiatives.
Our budget documents can be found on our website at www.morinville.ca/budget, and I know all of Council are available to answer questions.
Mayor, Town of Morinville