While the administration noted an expected surplus in corporate revenue and expenses, city council and administrative costs (largely thanks to changes in operation due to factors owing to COVID-19), reduced daycare revenue, costs from the 2021 cyberattack, and the aftermath of the May windstorm will put the city into a deficit of $936,460.
Each quarter, the budget and finance department present to council a forecast of the city’s financials come the fiscal year-end of December 31. The report comparing the annual budget with actual spending up to June 30 was presented to city council on August 3.
“It is safe to say that we will not have additional money to reinvest in debt repayment next year, and no additional money for roads,” Councillor André Lalonde said during the meeting. “Unfortunately, this year there are circumstances we can’t control.”
The forecast of a deficit comes not long after the city reported a need for substantial investment in the municipal infrastructure, including roads, sewers and waterlines.
Frédéric Desnoyers, Director of Finance and Asset Management, noted the $750,000 deficit from the windstorm would be minimized should the city’s application to the provincial Municipal Disaster Recovery Assistance (MDRA) relief program be accepted. Desnoyers is confident that with the MDRA relief the cost of the storm recovery will be reduced to approximately $200,000, bringing the total forecasted deficit to around $400,000.
Ontario law prohibits municipalities from running budget deficits. Clarence-Rockland’s forecasted deficit would thus be funded using the Tax Stabilization Reserve or by increasing taxes the following year.
“If we have a deficit at year-end, we need to fund it,” said Desnoyers. “Right now, we have enough in the reserve fund to cover the deficit, and on September 1 we are starting a new year for the daycares. So, we’ll have a better estimate in our next report regarding daycare costs and revenue.”
Council approved the submission of the MDRA application during council’s August 3 committee of the whole meeting.
