Analogy of Overspending using Your Money
We look at the County as a Corporation, one that ALL RATEPAYERS have Shares in. We have a “board of directors” elected to ensure our Corporation does not run into the red and runs efficiently.If the corporation runs into the red, guess who has to inject more money into operations? You guessed it, the Shareholders (otherwise known as Ratepayers). If the employees of your Corporation were increasing their budgets by more than 13% in each department, would this be alarming to you?
Would you wonder why, in times of uncertainty in all markets in your province, there would be great increases in operations, but little invested in departments that could lower your injection of money by attracting funding through development. Look at all the bordering municipalities and you will note a large, very active, Economic Development Department.
If we had a larger growing commercial/industrial base it only makes sense we would have lower residential/farm tax (injection). Seems simple! Most Heads of Corporations look at budgets and question percentages of increases and the income with potential growth. Not our Corporation… no… they think increases of 13% or 24% or 41% or 32% or even 1436% are completely acceptable. Do you?
Just one example is the increase over the last two years for Administration which has seen an increase of JUST UNDER 1 MILLION DOLLARS in two years. Remember, you are a major Shareholder.
We have been putting considerable efforts into reviewing the 2018 Budget put forth for approval by County Administration. Understanding this budget is very difficult but just looking at the Summary Operating Budgets 2013 -2018 is a tell tale story of what this year actually looks like.
Click Picture To View Full Size
Click Picture To View Full Size
We want you all to know that services this last two years have been taken out of the budget and billed to you individually as special services (RECREATIONAL FEES, DUMP FEES AND NOW LAGOON FEES = UTILITIES BILLED SEPARATELY ALL PREVIOUSLY INCLUDED IN YOUR TAX DOLLARS).
This is the only way they can con you into thinking you are getting Zero or 3.5% or 2.25% increases in your taxes. It worked last year! Perfect CON … take out services and bill as a separate fee!! No One will put two and two together and realize last years increases was closer to 10% over all… (That was from the first announced fee to the dump prior to them “subsidizing” with your own money). Now, this year we have two other services being billed as a separate fee or utility. What is the real figure for increase for 2018?
More to the point, every “Shareholder” (Ratepayer) should be looking at the budget (proposed now available on the LSAC website) and questioning your Councillor about all these increases.
They are hiring 4 positions and when asked why, they said they would have done it last year and the year before but there was no money. Some of these positions were previously in the organizational chart but when they were vacated, they were not filled. What makes them think we have free flowing money now?
Also of note is the MSI funding received this year is representative of two years worth of funding. It may be fair to say there will be little to none available next year. Without 3+ million from the government, what will the budget look like next year?
We all need to be informed and involved at this time of year, Budget Time, because ultimately you are fiscally responsible for EVERYTHING THEY (LSAC Council) vote on and implement.
Inaccuracy of past projections in budgeting is considered very poor when the deficit is so high. It is a red flag, (or should be) for those involved with budgeting. They are guessing and have no ability to control the budget. What basis are these “guesses” being formulated on?
The question is: How did the deficit come to be and why the is the loss not being treated more seriously by facilitating cuts in the budget?
At the last council meeting, the auditor presented the findings and one of the questions from the CAO was, “ We are in good shape then?” He indicated yes… but that would be speaking to the validity of the numbers, nothing more. Did he ask if the funds were going to keep coming? Did he ask if the monies were being spent on the right things? No… only the validity of the numbers and specifically about the amount of borrowing outstanding.
The Auditor also said that the Revenues missed the mark from budget by $1.5 MILLION and this was due mainly to the expenditure of Twp Rd 544 upgrades and the fact that there were "no contributions from grant funding as administration had anticipated". Last year Council approved a Short Term Borrowing (LOAN) for Road Upgrades. Was this Short Term Borrowing that occurred last year identified for that project and others or do we "borrow as we go"?
Also to note was the unrestricted surplus that was at $1,563,823 in 2016 but only $968,578, down almost $600,000!!! That is over half a million dollars.
The Auditor said "It is an undesirable position to be in to have to make up for shortfalls." EYE OPENING!
The purpose of a budget is to show the ability of management to manage money. The management is not effectively managing money if they are over projecting revenue and overall budgeting. Failing to cut services would be an example of not effectively managing money if a deficit is the continuous state. Items such as the East end office expenditures and carry forwards need to be explained.
Given the governments inability to supply the grants in the past, how can we continue to budget based on grants that never materialize? Since the last anticipated grants were not funded and put us in short fall, what is the Plan B for this year given that approving this budget means approving spending that may very well be unfunded? Essentially the 2018 budget should show more fiscal belt tightening and an attempt to stay within our tax revenue basis. If that means cutting jobs, then there are several vacancies that should not be filled.
Budgets are often not worth the paper written on, especially if the management preparing it is winging it. Really, this creates a strong argument that the failure to meet components of the budgets for 2015, 2016, and 2017 is a reflection on the failures of management. Council would be irresponsible in approving a budget based on MSI funding that is not forthcoming based on past experience.
There is a responsible process that has not been followed and make no mistake, approving a rushed budget is irresponsible. Massive cuts are required in order to make up revenue shortfalls. NO responsible council should be bullied into passing a budget that looks as poorly constructed as this, by an administrator that displays a history of past anticipated revenue shortfalls.
There are simply so many places in this budget that are in question. We did provide a list of questions at the past Council Meeting but have yet to receive the answers. Since that meeting we have been provided the updated version of the Draft Budget which poses even more questions.
Ratepayers should not be on the hook to make up for bad management. A failure to meet projections and not make adjustments is the single biggest flaw, failure… call it what you will. It means that management does not have the ability to meet projections. This casts doubt on any future projections. Management /Administration cannot be given another free pass and approval to spend monies that we don’t have and may not have.
It is Council’s responsibility to ensure that there is a budget where shortfalls will not happen.
Capital purchases – there is a deficit of nearly 11% of the tax base revenue that should be cut to balance this years budget but because they insist on moving forward with capital projects with no assurance of MSI funding, we will likely see even larger deficits. Capital projects should be shelved.
Bottom line – Management is responsible for the fiscal short fall due to their inability to make accurate budgets which were not made public by previous council. Fiscal Responsibility was one of the platforms that many Councillors campaigned on in the most recent election.
The timing of this budget is also in question. This process should have started in the fall and budgets theoretically should be started in the fall and passed before the new year. Other counties such as Parkland are open and transparent about it and they post the drafts in the fall. You can check their websites. Even the city of Edmonton passed their budget prior to the new year. This is a flawed process by the LSAC Administration that has resulted in this rush.
What are the consequences for administration missing the deadline for submitting to Municipal Government at the end of April?
Some municipalities require their department heads to submit their budget requests before Sept 30th. For example if there was new equipment required. The failure to do so can contribute to inaccurate projections if adequate time is not allotted and discussions do not take place. We shouldn’t be expected to just hear that the MSI funding isn’t adequate. The fiscal changes that have taken place as a result of canceled funding and the clear inability of administration to put adequate work into budget projections is what should have us worried.
Please read over the draft budget, at least the Summary, available on line and ask the questions of your representative. Why are there the high percentage increases in certain departments and why such decreases in departments that have the ability to increase revenues?
The purpose of a budget is to show the ability of management to manage money. The management is not effectively managing money if they are over projecting revenue and overall budgeting. Failing to cut services would be an example of not effectively managing money if a deficit is the continuous state. Items such as the East end office expenditures and carry forwards need to be explained.
Given the governments inability to supply the grants in the past, how can we continue to budget based on grants that never materialize? Since the last anticipated grants were not funded and put us in short fall, what is the Plan B for this year given that approving this budget means approving spending that may very well be unfunded? Essentially the 2018 budget should show more fiscal belt tightening and an attempt to stay within our tax revenue basis. If that means cutting jobs, then there are several vacancies that should not be filled.
Budgets are often not worth the paper written on, especially if the management preparing it is winging it. Really, this creates a strong argument that the failure to meet components of the budgets for 2015, 2016, and 2017 is a reflection on the failures of management. Council would be irresponsible in approving a budget based on MSI funding that is not forthcoming based on past experience.
There is a responsible process that has not been followed and make no mistake, approving a rushed budget is irresponsible. Massive cuts are required in order to make up revenue shortfalls. NO responsible council should be bullied into passing a budget that looks as poorly constructed as this, by an administrator that displays a history of past anticipated revenue shortfalls.
There are simply so many places in this budget that are in question. We did provide a list of questions at the past Council Meeting but have yet to receive the answers. Since that meeting we have been provided the updated version of the Draft Budget which poses even more questions.
Ratepayers should not be on the hook to make up for bad management. A failure to meet projections and not make adjustments is the single biggest flaw, failure… call it what you will. It means that management does not have the ability to meet projections. This casts doubt on any future projections. Management /Administration cannot be given another free pass and approval to spend monies that we don’t have and may not have.
It is Council’s responsibility to ensure that there is a budget where shortfalls will not happen.
Capital purchases – there is a deficit of nearly 11% of the tax base revenue that should be cut to balance this years budget but because they insist on moving forward with capital projects with no assurance of MSI funding, we will likely see even larger deficits. Capital projects should be shelved.
Bottom line – Management is responsible for the fiscal short fall due to their inability to make accurate budgets which were not made public by previous council. Fiscal Responsibility was one of the platforms that many Councillors campaigned on in the most recent election.
The timing of this budget is also in question. This process should have started in the fall and budgets theoretically should be started in the fall and passed before the new year. Other counties such as Parkland are open and transparent about it and they post the drafts in the fall. You can check their websites. Even the city of Edmonton passed their budget prior to the new year. This is a flawed process by the LSAC Administration that has resulted in this rush.
What are the consequences for administration missing the deadline for submitting to Municipal Government at the end of April?
Some municipalities require their department heads to submit their budget requests before Sept 30th. For example if there was new equipment required. The failure to do so can contribute to inaccurate projections if adequate time is not allotted and discussions do not take place. We shouldn’t be expected to just hear that the MSI funding isn’t adequate. The fiscal changes that have taken place as a result of canceled funding and the clear inability of administration to put adequate work into budget projections is what should have us worried.
Please read over the draft budget, at least the Summary, available on line and ask the questions of your representative. Why are there the high percentage increases in certain departments and why such decreases in departments that have the ability to increase revenues?
0 comments:
Post a Comment