The Village of Morrin appears to have a lot of work ahead of it if councillors and staff want to straighten out the budget mess the municipality has found itself in.
The issue was discussed at a special meeting of council June 16 at the Morrin Community Centre that included Mayor Howard Helton, Coun. M’Liss Edwards, Coun. Melissa Wilton and municipal financial consultant Tamara Sloboda, CPA, CGA.
The purpose of the meeting, according to the agenda, was to discuss the draft 2020 budget.
However, about an hour into the meeting Sloboda, a former Municipal Affairs employee, gave her take on the village’s 2020 draft budget and previous budgets and financial statements and it wasn’t very positive.
According to Sloboda, it’s clear the village has a serious financial situation that she encouraged the councillors and staff to address.
She began by noting that the village’s 2020 budget and tax rate bylaw are not approved, and it’s late in the year for that situation.
Sloboda also noted the village’s 2019 audited financial statement has also not been received from the auditor, and it’s also late in the year for that situation.
“We are in June…if something goes wrong, there’s no time to fix it,” said Sloboda at the meeting, which included about a dozen members of the public.
Sloboda also stated that it’s considered best practice for municipal councillors to receive a monthly financial report, but Sloboda stated there were no monthly financial reports for the entire year of 2019.
She went further by saying municipal councillors must realize 2020 is a strange year with the coronavirus pandemic which will no doubt include unknown costs, yet Sloboda could find no indication the Village of Morrin was taking this into account in their budgeting process and stated the draft budget presented at the council meeting didn’t include any emergency expenses.
Sloboda stated that, as she looked back at the past three budgets, those budgets underestimated expenses which were greater than revenues, which resulted in an unbalanced budget which was then subsidized by the municipality’s reserves.
“Something needs to happen to change that,” said Sloboda.
Sloboda stated that if this situation continues, Morrin’s reserves will run out and taxes will have to go up to balance the budget.
She also pointed out financial pressures such as property assessment and how, if assessment drops while village expenses stay the same, there will be a shortfall because tax revenue drops.
She also explained how “amortization,” in essence “depreciation,” also affects values in a budget.
The financial consultant also stated that certain taxes called requisitions collected by Morrin on behalf of the provincial government didn’t appear to be in at least one previous tax bylaw.
Requisitions such as school and senior’s foundation are taxed as separate items, then paid to the provincial government.
While discussing the operating budget, Sloboda stated her advice was that the village should conduct an in-depth review of every department to ensure revenues at least equal expenses.
At this point, village Chief Administrative Office (CAO) Annette Plachner disagreed with Sloboda’s assessment of at least one village department
“I know what the revenues are for water and sewer and garbage and they’re not at a loss,” said Plachner.
Sloboda pointed to the 2018 audited financial statements and read out numbers that showed, according to the statement, the village’s transportation department ran at a loss, the planning department ran at a loss, the water/wastewater department was in a minus situation and the expenses of the waste management department were double its income.
Sloboda again stated she felt the village should conduct a strategic review of all departments and develop a long-term plan to ensure revenues and expenses are equal.
She also stated at this time of year the tax rate bylaw, which allows the village to collect the taxes it needs to operate is paramount.
“That’s an emergency,” said Sloboda, who noted that Morrin’s tax rate is in the middle compared to other municipalities.
The financial consultant stated that, according to the 2018 audited financial statement, it also appears the Village of Morrin didn’t collect all taxes owed to it.
While Sloboda said it appeared Morrin will once again have to use reserves to prop up its 2020 budget, if a review of departments is conducted, at least a plan for the future will be in place.
Coun. Wilton summarized the situation. “So we’re going to operate in the negative another year,” she said.
At the end of the meeting, someone at the council table asked Sloboda how much she was planning on charging the village for her work, although it wasn’t clear who asked this question, to which Sloboda stated she’d send the village an invoice.
At this point, there was an exchange between Mayor Helton and Coun. Edwards which wasn’t completely audible; Mayor Helton then stated the purpose of Sloboda’s work was not to attack CAO Plachner.
Earlier in the meeting, councillors spent about an hour discussing which projects to include in the 2020 budget.
Stu Salkeld, Local Journalism Initiative reporter