The 2022 taxation budget for the Town of The Blue Mountains finished with a deficit of more than half a million dollars.
Town staff delivered the year-end financial report at council’s committee of the whole meeting on June 5. The report detailed the deficit and surplus positions of a number of town departments at the end of 2022.
The operating side of the budget recorded a deficit of $531,685 in 2022. Staff explained there were two major factors that resulted in the deficit: missing the revenue target for paid parking and less than expected supplementary taxes coming into the town’s coffers.
The deficit will be made up by a transfer from the town’s working capital reserve fund.
Staff explained that while the deficit figure is a large number, as a percentage of the town’s total tax levy it is relatively low.
“Nobody wants to run a deficit, but they do happen,” said Sam Dinsmore, deputy treasurer/manager of accounting and budgets. “$530,000 is a significant amount of money, but it is less than three per cent of the levy.”
As a result of the budget deficit, the town’s working capital reserve has dropped from a balance of $3,094,510 at the start of 2022 to $2,462,634 at the end of the year. (Note: the town used working capital reserves for some expenses other than the budget deficit).
Coun. Gail Ardiel said deficits seemed to be common in municipalities at this time.
“A lot of municipalities are facing deficits. It’s not just us,” said Ardiel. “Sometimes it happens. We just came out of three years of a pandemic.”
Results for other departments included:
- Water system - $71,759 deficit, covered by the water rate stabilization fund
- Wastewater system - $30,296 surplus, put into reserve
- Building department - $53,133 deficit, covered by the building department stabilization reserve
- Harbour - $24,986 surplus, put into reserve
- Licensing department - $186,597 surplus, set aside as deferred revenue for future expenses
- Development engineering - $400,890 deficit, covered by deferred revenues earned in previous years
The large deficit in the development engineering budget caused concerns for council. Dinsmore explained that it was not unusual to see fluctuations from year to year in the development engineering department revenue. The collection of those fees depend on the timing of when development proposals come to the town. He noted that revenues for 2023 were already exceeding the totals recorded in 2022.
The deficit in that department was funded by using reserve funds, which resulted in the fund being depleted from $401,304 to just $414. In response, council passed a resolution asking staff to flag the development engineering department revenue to be included in staff’s next bi-monthy financial update report.
