The City of North Bay is reporting its first end of year deficit since 2014.
The city closed off the books for 2019 with a deficit of $87,845.
“Some of the things that were included within that budget was fully absorbing the NEER surcharge which is linked to WSIB and was quite costly. Roads absorbed an additional $300 thousand in winter control costs because we didn’t have sufficient reserves. So, it takes one bad year to deplete what seems like a lot of money,” explained Deputy Mayor Tanya Vrebosch.
“So, we’re starting the 2020 year with no winter control reserves because we depleted that last year with our costs being just over one million dollars. So, the variance demonstrates how tight our budget is, because it represents point zero six per cent variance on our total expenses.”
Vrebosch points out the last time there was a deficit with the city was in 2014 for just slightly over one million dollars.
“We don’t budget for a deficit. We don’t budget for a surplus. You try to get as close as possible, but when we do have deficits like this, we do have a reserve fund to support this,” said Vrebosch.
“So, the good years we put it away, and it is used for the years when we have a deficit such as this.”
The deputy mayor went on to explain the implications for 2020.
“The big ones are going to be the fact that we’re starting 2020 without a reserve fund for winter control which is very volatile depending on the winters that we encounter. And then the other part is we’ll have to dip into reserves to cover the deficit.”
The operating contingency reserve has just over $1.1 million.
“It is the one that could potentially be used. It is the one that we use when we have deficits.”
Departments within city Hall experienced a mix of surpluses and deficits.
General Government ended the year with a deficit of $984,312
Community Services ended the year with a surplus of $571,874.
Corporate Services ended the year with a surplus of $395,705, and Infrastructure and Operations ended the year with a surplus of $749.
Adding economic uncertainty due to the COVID-19 crisis to the mix, means bracing for another year of uncertainty.
