Men­di­cino pitches sur­plus al­ter­na­tive

North Bay Nugget - - NEWS - Gord Young

Coun. Dave Men­di­cino be­lieves there’s a bet­ter way to save ratepay­ers’ money than us­ing sur­plus dol­lars to “ar­ti­fi­cially” bal­ance the wa­ter and sewer bud­get.

“To me, that doesn’t work . . . you can’t count on that money for next year,” says Men­di­cino, re­fer­ring to a pro­posal tabled this week to re­duce the 2019 wa­ter and sewer op­er­at­ing bud­get us­ing sur­plus funds from last year.

Such a use of one-time dol­lars to off­set op­er­a­tional ex­penses is not a rec­om­mended busi­ness prac­tice, he says, not­ing coun­cil has an­other, more pru­dent, op­tion.

In­stead, Men­di­cino sug­gests coun­cil take a closer look at us­ing sur­plus funds to help pay for cap­i­tal projects. That way, one-time fund­ing would be used to cover one-time ex­penses, he says.

“I think we need to ex­plore that more,” says Men­di­cino, not­ing the pro­jected sur­plus from this year will put the city’s waste­water re­serve fund well over what’s con­sid­ered healthy.

He says some of that money could be used to help pay for waste­water projects.

“That’s money we don’t have to bor­row. So, you’re sav­ing the tax­payer money that way,” says Men­di­cino. “I’d be more sup­port­ive of some­thing like that as op­posed to look­ing at off­set­ting op­er­at­ing with the sur­plus.”

Coun­cil heard this week a pro­jected sur­plus of more than $900,000 from last year – if tucked away for a rainy day – would bring the city’s waste­water re­serve fund up to about $3.2 mil­lion, while in­creas­ing its wa­ter re­serves to a lit­tle more than $600,000.

Just over $500,000 of the pro­jected sur­plus is re­lated to wa­ter and would be di­rected to­ward the as­so­ci­ated re­serve, while a lit­tle more than $400,000 is re­lated to waste­water and would – like­wise – go to a re­lated ac­count.

When it comes to waste­water, re­serves would ex­ceed the rec­om­mended tar­get of be­tween $1 mil­lion and $1.5 mil­lion. But for wa­ter, they would re­main at far less than what’s con­sid­ered healthy – be­tween $1.3 mil­lion and $1.9 mil­lion.

That’s a key rea­son there was agree­ment around the ta­ble this week that the city should stick this year with the ex­ist­ing 50 per cent fixed/50 per cent vari­able billing struc­ture for me­tered wa­ter. Coun­cil was told that the wa­ter re­serve could be de­pleted if con­sump­tion sig­nif­i­cantly dropped due to weather or some un­fore­seen cir­cum­stance.

Weather, for in­stance, was a key fac­tor lead­ing to the pro­jected sur­plus from 2018. A dry sum­mer saw higher-than-an­tic­i­pated con­sump­tion from June through Au­gust.

It was, how­ever, also a key con­trib­u­tor to a year-end deficit of more than $500,000 in 2017, when fewer res­i­dents wa­tered their lawns and gar­dens due to heavy rain­fall.

Staff is rec­om­mend­ing that coun­cil look to waste­water re­serves should it de­cide – as at least one mem­ber is ad­vo­cat­ing – to use a por­tion of the sur­plus from last year to off­set this year’s wa­ter and sewer op­er­at­ing bud­get. Although funds can be trans­ferred be­tween ac­counts, coun­cil was told leg­is­la­tion re­quires that the money be re­paid with in­ter­est.

Staff have rec­om­mended against us­ing sur­plus dol­lars to off­set op­er­a­tions, warn­ing it will cre­ate a short­fall in the 2020 bud­get.

But, as chair­man of coun­cil’s en­gi­neer­ing en­vi­ron­ment and works com­mit­tee, Coun. Mike An­thony has called on staff to bring for­ward a bud­get that in­cludes $216,000 of the sur­plus to help re­duce costs. The move would see the av­er­age an­nual bill de­crease by $7.56. But it does not ap­pear to have much sup­port around the ta­ble.

And, an amend­ment ad­just­ing the bud­get to ex­clude the use of the sur­plus dol­lars is ex­pected to be tabled when it comes for­ward for ap­proval next week.


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