By Mike Williscraft
Higher than expected revenues and frugal spending by department heads culminated in a $1.1 million budget surplus for the Town of Grimsby in 2019.
Steve Gruninger, Grimsby’s director of finance, informed council of the surplus at Monday night’s August meeting of council.
The surplus was generated despite some significant overages.
“The Planning department suffered a deficit of $279,410 during 2019. There were two main factors for this loss. One, planning application fee revenues were under budget by $122,000 as the number of applications submitted did not meet expectations,” noted Gruninger in his presentation.
“Two, professional fees were over budget by approximately $212,000 primarily due to ongoing legal support and legal actions. These two factors were partially offset by savings in salaries due to the postponement of the hiring of the new Planning Director.”
While the news of a surplus was met positively, several members of council were also concerned with how off-base estimates were going into the 2019 budget deliberations.
“It’s music to my ears,” said Coun. Reg Freake of the budget surplus, noting earlier detection could have been strategic.
“We’re late finding that out. Could we have lessened the budget impact of 2020?”
Gruninger noted some aspects of the surplus could have helped reduce 2020’s budget but added that most of the surplus was for operational items.
“It was not all cost reductions,” said Gruninger, noting many items were one-time costs which either came in lower than projections or did not happen at all in 2019, so they could materialize in 2020 and need to be accounted for.
For Freake and Coun. Lianne Vardy who struggled to convince council to get the 2020 budget increase lowered, the good news of a surplus was tempered.
“Is there something we could have done better? Are there lessons to be learned?” asked Freake.
Part of Vardy’s concern is 2019’s budget figures formed the basis for 2020 deliberations.
“We based our budget on inflated figures. For 2021 we need to close off our books for 2020, have the actuals, so when we do our 2021 budget we know what we have spent,” said Vardy.
Coun. Dorothy Bothwell noted her concern with rolling the surplus into the Town’s reserves as suggested.
After Coun. Dave Kadwell called Grimsby’s pool of reserves “scary low”, Coun. Randy Vaine said that circumstance was something the current council walked into.
“Previous councils used reserves to keep tax increases low and that put us in a bad position,” said Vaine.
It was also noted that Grimsby’s sanitary sewer and water systems came up with $375,000 and $490,000 surpluses respectively.
This was mainly due to lower usage rates by residents, said Gruninger, something which is forecast using averages.
Each surplus was rolled back into its own area’s reserves, as was the overall $1.1 million surplus.