By Adam Brazeau
CORNWALL, Ontario - The United Counties of SDG could end the year with a deficit of $500,000 to $1.8 million if a financial plan isn't put into place immediately, according to the 2014 Budget Impact statement released today.
© Adam Brazeau
From left are Ross Markell and Ian Murphy, partners at CKDM accounting firm, delivering a presentation to counties council about their 2013 financial statements on June 16. Markell says all the key indicators in terms of their financial position have improved â€“ 2013 was a good year for SDG.
But Warden Eric Duncan says that similar projections were made at this time last year for the 2013 budget and counties council was able to complete the fiscal year with a small surplus.
"It's important to red flag it, but I wouldn't give up now and say we're in a massive deficit situation," said Duncan. "It's good for us to know now so we can be even more prudent for the rest of the year to balance out."
At their monthly meeting, United Counties council was given a key information report from financial services stating there are purchases that were approved by council which varied from the 2014 budgeted cost, and that their impact is significant.
Without developing a financial plan to offset the budget variances, the United Counties is on track to end up with a hefty deficit at the end of the current fiscal year.
The report stated that the largest financial impact was thanks to Old Man Winter. The winter maintenance budget went $616,000 into the red.
"This is not unanticipated over-spending, it's strictly from winter maintenance because of the heavy season we had," he said. "I'm hopeful we will get into a reasonable situation and see how things balance out in the fall. But you can't predict weather."
Ratepayers can find some comfort knowing that several options are in place to bring the deficit numbers back down.
"This time last year, we faced a significant deficit as well, and were able to balance it out by looking at line items and finding savings, but we haven't had a chance yet. Tenders and opportunities are coming in now," said Duncan.
The county roads department suggests holding off on further construction to the Dixon Creek Culvert (County Road 12), which would help offset the deficit by $120,000.
Other options include:
1) Incur the deficit and recover it in the 2015 budget.
2) Use the winter maintenance reserve (current balance is $500,000).
3) Reduce some of the scope of some projects approved in the 2014 budget.
4) Borrow for specific capital projects.