Thursday August 21, 2014

EDITORIAL - City losses sign for concern


By provincial legislation a municipality in Saskatchewan cannot run a deficit on its annual budget.

While it is something that might have served taxpayers in general better had such a rule extended to the two senior levels of governments a few decades ago, it does at least keep local governments having generally sharp accounting pencils.

But here we are in Yorkton looking at 2013 figures and seeing a $175,000 deficit.

That amount, in contrast to the overall budget is rather insignificant against the millions that flow in and out of the City coffers annually.

And because municipal governments in the past have been prudent in putting money into reserves for future expenditures, it is an amount rather easily offset by trimming those reserves set asides by a matching amount.

It is not a habit we, as taxpayers would want to see occur regularly, since reserves are there to help buffer future project expenditures, it is a prudent one-time solution.

But the City shouldn’t get off quite that easily in regards to the 2013 financial year-end.

The actual budgeted shortfall was just a shade shy of $600K, sitting at $594,000 in 2013. That number is more worrisome.

Yes the lion’s share of the shortfall was offset by $419,282 more in revenues than had been expected, but that only goes to show the budget was off by a sizable chunk of cash on both sides of the ledger.

Yes there were extenuating circumstances, such as higher than expected snowfall sending the snow removal budget far into the red (see related story this issue), but there are some other aspects of the budget which seem to always come into question at year end.

One might forgive an additional $373,000 in snow removal costs above the previous record expenditure of $500,000 based on piles of white stuff on our streets last year.

But why is the Gallagher Centre running another deficit, this time $207,000.

We know recreation facilities rarely, if ever, cover their operational costs, but such factors should already be part of the budget numbers going in.

As a result, City Administration’s report to Council Monday noted, “Revenues are below budget but this is because previous budget numbers have never been achieved.”

Deer Park Municipal Golf Course is in a similar situation, with nearly annual budget shortfalls, in 2013 it was $36,000 short and clubhouse maintenance expenditures overspent by another $12,000.

It is one thing to anticipate better results and miss targets on occasion, but in areas of perpetual shortfalls, budgets need to be tightened with more realistic outlooks on revenues, and more control on spending.

That would be good advice for the overall City budget when the numbers are off by a half mill in terms of both revenues and expenditures.



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