The City of Yorkton ended 2013 in the red.
Lonnie Kaal, Director of Finance with the City told the regular meeting of Yorkton Council Monday that while revenues were actually $419,282 more than budgeted in 2013, when including capital expenditures the city was still in a deficit position of $175,049.
The increase in revenues included an additional $121,000 from Crown surcharges, and $255,000 in additional interest, $165,000 of that realized from deleting discounts on early paid property taxes, said Kaal.
The net departartmental operating budgets showed a combined deficit of $594,000 in 2013.
Snow removal led the way in terms of over budget spending, $375,000 in the red.
“That was a huge over expenditure,” said Kaal, who added it appears most Saskatchewan urban municipalities faced higher than expected snow removal costs last year.
A report to Council added detail to the situation.
“Public Works was conscientious to ensure they came in under budget and reduced
spending in sidewalks and drainage to help offset snow removal expenditures. Overall they had a surplus of $150,000. The bulk of the savings are in street and road maintenance $260,000. Since funds will be required for the 2014 Dracup/College
project, a transfer to reserves of $300,000 has been made,” it stated. “… Snow removal costs are the highest in history having spent $873,000 compared to the previous high of $500,000. Budget for 2013 was $496,000 and snow removal reserves were depleted by withdrawing $94,000.”
Recreation facilities also ran in the red last year, starting with the Yorkton Public Library $15,000 deficit, Deer Park Municipal Golf Course $36,000 short and clubhouse maintenance expenditures overspent by $12,000, and the Gallagher Centre $207,000.
“Revenues are below budget but this is because previous budget numbers have never been achieved,” noted the report in regards to the Gallagher Centre shortfall.
Kaal said by provincial law a municipality cannot have a deficit. Rather than cover the loss through the 2014 budget Kaal said her recommendation, which Council would unanimously support, was to reduce transfers to reserves as budgeted for in 2013. The reduction to reserves included $100,000 to the Gallagher Centre, $50,000 to the airport, and another $25,000 to airport equipment reserves.
To avoid a similar situation in 2014, Kaal also recommended creating a ‘rainy day fund’ to offset an already anticipated revenue shortfall.
“When completing 2014 budget the grant was based on anticipated growth in PST revenue. After budget was approved, the Province advised that PST refunds issued to low income earners (on income tax filing) would need to be deducted from the pool and this change, coupled with slower growth in retail sales, would result in a decrease over previous years. With surplus revenue in 2013 we recommend transferring the anticipated shortfall into an operating reserve account to offset the 2014 shortfall,” outlined the report.
As part of the recommendation passed to cover the 2013 deficit the 2013 transfer to reserves was amended to include a deposit of $265,000 to an operating reserve (“rainy day fund”) to fund an expected shortfall in the 2014 Municipal Operating Grant.