MAPLETON – Township staff here are projecting a small year-end deficit based on the municipality’s first quarter financial results.
“Based on our financial position as of March 31, 2021, staff is projecting, a small year-end deficit of $54,185,” states a budget variance report presented by director of finance John Morrison at the April 27 Mapleton council meeting.
The report notes ongoing COVID-19 restrictions continue to impact the township’s recreational facilities and community halls, and seasonal variations impact projections.
“We’re continuing to see some pressures on our recreational facilities as they remain closed, but hopefully that will turn around once these restrictions are lifted and the majority of the population receives the vaccine,” Morrison told council.
The report shows general government is trending in a favourable position of $52,248, in part due to an additional $44,000 in financial relief provided by the province to help offset the township’s COVID-19 related operating deficits.
The township’s protection to persons and property account is headed toward a negative variance, the report indicates.
“This is due to a number of operating pressures with the insurance premiums accounting for $12,981 of its deficit; 45% of the forecast for this service,” the report explains.
“Transportation services are also trending into an unfavourable variance.
“Again, there appears to be a number of operational pressures adding to the deficit forecast. Insurance premiums of $33,335 is accounting for 45% of the deficit in this area.”
The report states environmental services may either be in a surplus or deficit position by year-end.
“[Year-to-date] actual expenditures [are] typically high in the first quarter due to council’s policy to transfers reserves at the beginning of the year and due to the bi-monthly billing cycle for water and wastewater services, which provides only 19% of the expected annual revenues in the first quarter.”
All other negative and positive forecasts for operational requirements offset each other and in total remain neutral, the report points out.
“Recreation and cultural facilities are experiencing revenue losses due to the COVID-19 pandemic. Staff has projected that loss revenue could tally to $84,000,” the report states.
“Reduced utility expenditures in our facilities are moderating this budget pressure downward with forecasts projecting a $45,000 surplus for this expense item. However, insurance premiums added a $25,000 budget pressure to the facility operations.”
With insurance premiums factoring into so many areas of shortfall, the report notes “the dramatic increase in insurance premiums is due to market forces that occurred in our insurer’s reinsurance arrangements.”
“It’s still early in the budget year so these are very preliminary results,” Morrison stated.