Tamara Sloboda, a Chartered Public Accountant and Certified General Accountant with previous experience working with other municipalities and Municipal Affairs hired by the Morrin council attended their budget meeting on Thurs. Feb. 6.
Council got an eye-opener when learning that the three-year Operational Plan and the five-year Capital Plan deadline was December 31, 2019. This legislation was put into place in 2015 with a deadline of December 31, 2019.
She urged Chief Administrative Officer (CAO) Annette Plachner to immediately work on these plans and get them to Municipal Affairs explaining that besides the annual budget, CAO Plachner will be required to submit the Operational budget for 2021, 2022 and 2023 and the Capital budget for five years, 2021 to 2025.
Council must review all the budgets annually, she said.
She also spoke of the 13 indicators that Municipal Affairs has established when looking at municipal financial statements, operating and capital budgets with two of those indicators for the village being critical.
She explained, “May 1, 2017, you [the village] were late with submitting the budget, so that is red for you”.
She also explained another graph that showed the village tax base was thrown off because of uncollected taxes.
“Tax collection has triggered red. You don’t want that. You can see in the graph from 2009 to 2018, more and more cash is stuck uncollected and the risk is increasing every year.”
“If a municipality collected less than 90 per cent of municipal taxes in a financial year, then it is triggered [by Municipal Affairs]. The reason Municipal Affairs has not intervened is because you have ‘zero debt’.”
Over the last six years Morrin’s tax collection have been under the 90 per cent: 2013 – 80.1 per cent; 2014 – 75.1; 2015 – 72; 2016 – 78.9; 2017 – 74.4 per cent.
“Which means it is not good enough to say, ‘hey, you are not paying your taxes’. I think you might want to start that process. You know that is an issue. No. 2, you need to do that research, what is the problem, what are the properties, when did that start?”
Sloboda said council may want to consider outsourcing the collection of taxes that are in arrears.
When it came to investing in infrastructure she explained the need to find the “right formula” for investing in infrastructure so that is where the 5-Year Capital Plan is crucial.
Reviewing financial statements, Sloboda pointed out in 2017 the village had $5.126 million on the bottom line “but not according to Municipal Affairs”. “You have to take out $4.409 million as per the auditor’s notes leaving less than a million– $717,000 net, divided by the population, your net is $2,987 per capita,” she said.
“It’s one thing to have $5 million, it’s different to have $700,000.”
She pointed out reserves should include one year of operations.
“Cash is a big number you want to pay attention to,” said Sloboda.
She then moved to the budgeting process stating it’s crucial to work with the ‘net’ bottom line when budgeting.
“It’s going to take a year and a half [red indicator on tax collection] but it is fixable. Save cash but move on with the infrastructure with a slower plan,” concluded Sloboda.
Sloboda indicated she would be available to assist CAO Plachner in preparing a 2020 budget and both the 5-Year Capital Plan and the 3-Year Operational budgets.