CORNWALL, Ontario - The city ended 2013 with a deficit of $145,000, according to financial statements presented to city council Monday night - and got another warning about its poor working reserve account.
Finance manager Maureen Adams told city councillors the deficit is driven in large part by some winter clean-up work, as well as higher expenses when it comes to Workplace Safety and Insurance Board payments, not to mention a shortfall in the waterworks department.
While there was a sewer surplus of $290,000, that was outstripped by the other line-items to the tune of $435,000 - resulting in the deficit.
While it may seem like a lot to some Cornwall wage earners who would have to work several years to ever collect such a payday, the deficit is actually a pittance compared to the total budget of nearly $160 million.
Many financial experts would suggest the city has essentially come in on budget.
"We had no issues with the numbers and no issues in terms of any management estimates," said Ross Markell, of accounting firm Craig, Keen Despatie and Markell, which put its stamp of approval on the financial statements.
But Markell took the city to task again for its poor working reserve account, which is actually in a deficit position of some $240,000.
The reserves are used to pay for unforeseen expenses in many cases and Markell said in a wrost-case scenario the city may find itself having to go to a bank to borrow money to pay for operating expenses if it doesn't act to stem the flow of money.
"If you look at the working funds, they're in a negative position," said Markell. "You're in a position now where you have overspent. They will build themselves back up in a couple of years...(but) you have to do something."
The city is in that position because it purchased $2-million worth of land in the industrial park without having sufficient money in the working reserve account.
"We could have went out and borrowed the money for the land, but instead we just decided to pay for it," said Coun. Andre Rivette.
Markell said the city should finance the purchase and then pay that debt off when the land is eventually sold. City council eventually pulled money from a pair of reserve accounts to pay for the land, but that decision didn't come until Monday night.
"You really didn't have free money in your reserves to cover something like that," he said, adding the city has used its reserve accounts to a fault. "The last couple of years you've been going like a kid to the candy jar."
He further recommended a policy be created to limit the occasions reserve funds can be used so that a suitable balance can be created.
The auditor's remarks were welcomed by council members.
"We need to have a policy people will stick to," said Coun. Denis Carr. "We're bad for policies because we put them in and then we break them."
But the news wasn't all bad.
The city is in a relatively stable financial position compared to other Ontario communities, and has some healthy assets including a secondary waste-water treatment plant that will be completed this year.
The $55-million facility is being built in Cornwall's east end.
The city is covering about a third of the cost of the facility - the biggest project ever undertaken by the municipality - while the province and federal government are sharing the balance.
"We are a competent and well-functioning municipality," said Coun. Bernadette Clement. "This looks great. It feels good to be city councillor today."