Council heard very good news on Monday: we have an operating surplus for 2012 of $1.6 million. Not only is the magnitude a good story but it is also to be celebrated that 19 % ($306.4 thousand) is due to Township Staff identifying ways to reduce costs. We have allocated the surplus with an eye to future needs, both very specific needs and also general.
I know there is tremendous cynicism by the public when any level of government announces that there is a surplus. Immediately one thinks that the budget was padded. I feel pretty confident that this is not the case with this surplus.
- The largest source (38%) of the surplus is unbudgeted tax revenue. When we did our budget we used the latest information available from MPAC; to have budget on more tax revenue would have been budgeting on guesses.
- The second largest source is related to underspending on sustainability initiatives. Our sustainability work did not start as soon as we had hoped after approving the Sustainability Plan in April 2012; and rather than spending quickly without the appropriate level of analysis and consideration we did not spend it all.
- You can read the full report and the breakdown of the surplus here.
I think our decision on how to use the surplus is very valuable for the Township and its residents.
- We are allocating $356.9 thousand to a reserve for building the Graham Sideroad Bridge in 2015. We need to build this bridge as part of the Holland Marsh Drainage Canal project; just as we have had to build the Dufferin Street bridge. The latter is being funded almost totally by a provincial grant of $1.9 million. Given the tight budgets across all levels of government we cannot count on a grant of that magnitude for the Graham Sideroad Bridge. We do not have final estimate on the Graham Sideroad Bridge; but given current thinking and other likely sources of funds (e.g. gas tax) this reserve fills a gap in the funding plan.
- In October 2012 we approved a strategy for dealing with a surplus <$100,000; specifically we decided that such should be divided 25/75 between tax rate stabilization and infrastructure reserve. Hence, we have assigned $100,000 of the surplus accordingly.
- We have allocated $1 million of the reserve to a general reserve which we can access as needed. Whenever this is done there will be a very specific recommendation to Council. (Note: the recommendation from Finance was to assign this sum to a land acquisition reserve; Council made an amendment to put it in a general reserve.)
- Finally, $182 thousand is allocated to a reserve for Planning matters; this is same amount as was under spent in 2012. We are putting into a reserve as the issues which caused us to budget it in 2012 still are relevant and/or the studies are still to be done as they are needed.
I do not consider a surplus of this magnitude as desirable but I am satisfied that we did our 2012 budget with as much quality as possible given the information available. And we are using the surplus effectively.
Congratulations on a surplus.
This puts you in the unique position of being able to plan for and build for the future; inclusive of restocking badly depleted capital asset replacement reserves, and doing more than the minimum infrastructure repair and maintenance.
Planning a balanced budget for the future may, by necessity, include what may be viewed by some as overtaxation or surplus, but by others as a careful and thoughtful outlook.
Here’s hoping this “surplus” will not just be spent on acquiring Holy Name School.
jeff laidlaw