HawthorneVillager.com

Lots of interesting financial reports on the agenda of the April 19 Milton Admin and Planning Committee. Especially the report showing the source and disposition of a $1,877,800 surplus for 2009.
http://www.milton.ca//execserv/agendas2 ... ntries.pdf

How much of the surplus was from:
- tight management by staff?
- staff skill in building a fat budget?
- lack of pressure from Council at budget time?
- luck?

And what of 2010? Some Councillors wanted to press for a 2% tax increase but the majority voted for the 4% recommended. More surplus, plus the snow surplus, to go to reserves for 2010?

And when do we exceed the proper level for reserves and get some of the surplus back in tax reductions before it disappears as low priority spending?

I hope this gets some discussion at Committee and I thank staff for the report.

...errr...would we be happier if there was a deficit instead ?

I understand the need for balanced budgeting and accurate forcasting. But I prefer surpluses over deficits. Your rarely going to be hitting the budget dead-on, there will be a variance either up or down. If it was dead on, I'd be suspicous.

I think one point your making Gary is if there's a structural surplus year-over-year and reserves are healthy, then we should be having smaller (or no) tax increases to eliminate that surplus. Don't hoard money for the sake of hoarding?

Snippet below from the recent report garlis is mentioning.

_________________
Visit my Blog | Twitter | or Facebook page

I have never seen a deficit in Milton or the Region and don't expect to. Municipalities build some fat into the budget to avoid that and Council should be there to avoid overspending the budget.

But a $1.9 million surplus for Milton is a lot. And the first quarter review of capital spending shows another $1 million surplus (page 7).
http://www.milton.ca//execserv/agendas2 ... Report.pdf

Good on staff for finding ways to reduce spending due to economic conditions in 2009. But why was this saving not reflected in the 2010 budget? Taxpayers are the ones facing tough economic conditions and they paid a 4% tax increase in 2010.

It appears to me that a tax increase was not needed for 2010 based on the surplus that is sloshing around now - and that is without eliminating any questionable spending projects. Unless there is sudden change in attitude, I expect this Council will approve another tax increase budget for 2011 from this 4% higher base - in spite of the surplus showing now.

I would love to be surprised by some meaningful discussion of these significant financial reports by Committee on Monday night.

What are the town reserves used for?
If this is money that could be used/is being planned to be used down the road for the town portion of the eventual hospital expansion for example I have no problems with it, but agree with Rick - if it's structural and just being stock-piled for a rainy day fund then a serious look at year over year tax increases need to be examined. I assume major capital expenses like the Sports Center Expansion Phase 2, and the A&E expansion phase 2 are planned within budget. Are reserves something that can be drawn on for unexpected budget overruns on major projects? Again, not something I want to see happen, but sometimes does and always requires careful examination when it does happen to explain why.

Did someone criticize staff for coming up with cost savings? I must have missed it. If I had seen it, I would have defended staff and suggested they do it every year like continuous improvement in the private world. I did say "Good on staff for finding ways to reduce spending due to economic conditions in 2009".

If a directive was given to staff early enough in 2009 to actually achieve significant savings in 2009, it was also early enough to be included in the 2010 budget for a reduced tax increase. Perhaps if Council had put more pressure on the proposed budget, as proposed by one councillor, it would have found these savings and others in stead of approving a 4% tax increase.

You say a 3% surplus is not significant. Many of us would disagree. It is very big by historical standards and very significant if it translates to unnecessary 3% tax increase.

It is not necessary to build large amounts of fat into the budget for contingencies. There are reserve accounts to protect against OMB cost overruns, bad winters, low revenues, etc. on an emergency basis. Also, as in business, if overspending is anticipated I would expect Council to cut back or delay spending in other areas as much as possible to stay on total budget. You probably do the same with household budgets.

Right now there is $1.9 million surplus from 2009 and another $1 million surplus from Q1 2010 capital. That is equivilent to almost a 4% tax increase. My biggest concern is how this Council will handle this current surplus. There is an old saying "Easy come, easy go". One option would be for Council to spend this money before year end on low priority projects that would never be approved if they required a tax increase, and then ask for a 4% tax increase for 2011. Don't discount the possibility with this Council.

I would prefer that the surplus be held closely and included at 2011 budget time to reduce or eliminate a tax increase for 2011. We should get some clues from Monday's meeting unless they choose to duck discussion of the issue in public.

Thanks Tim for the correction on the surplus %. I should have known that and it does increase the stakes.

I take your point on the restrictions with a $1 million capital surplus but Council does have some flexibility on where it is applied and what capital it displaces.

Say, have you considered running for a spot on Milton Council? Guess it would be considered a conflict if you got paid twice for attending the same meetings huh.

Mike Grimwood made a presentation last night to the admin and planning commiittee about taking that excess money and putting some towards upgrading the accounting systems for the town. Linda Leeds was kind of taken back at his generosity as well and it made for a light hearted moment and chuckles from everyone.

She did say however that 300,000 would be just a drop in the bucket towards an uprgraded accounting system and wouldnt do much in the short term. It is something the town should consider putting away some $$$ for future considerations. It will eventually be needed down the road when the changes are made. Some good points were made by Mike last night.

_________________
Mike Cluett
Local/Regional Councillor
Wards 1,6,7 & 8

Website | Email mike@mikecluett.ca | Cell (647) 888-9032 | Facebook Page | | Twitter @Mike_Cluett

Committee was virtually silent regarding the reports of $1.9 million surplus in 2009 and reports of current surplus in 2010. Not surprising, but certainly does not inspire confidence in their ability to oversee our tax dollars, or other issues for that matter.

Some obvious questions that capable Councillors should have asked:
- Why did we approve a 4% tax increase in the fall of 2009 when several weeks later there was a surplus equivilent to a 7.5% tax increase? Even with green eyeshades and quill pens there should have been an indication of a significant surplus at the time of budget approval that should have been taken into account by Council.
- In 2 months staff will be starting the budget process for 2011. How will the 2009 surplus and the current forecast of 2010 surplus impact the budget call (guidelines) for the 2011 budget?
- Staff's Expenditure Control Plan was obviously successful in 2009. Thank you. Does it continue in 2010? If not, why not? Were any expected savings by staff in 2010 included in the 2010 budget, or will they result in surplus for 2010? Will any such savings be included in estimates of surplus used at budget time?

I look forward to the more transparent and diligent efforts of a fresh group of councillors.

There is a story in today's Champion about the $1.9 million surplus in 2009. The story even mentions the GTA Pooling tax grab.
http://www.insidehalton.com/community/m ... cle/804012

Unfortunately the story has no current background quotes from our councillors on either issue. They sure didn't want to talk about the surplus at Milton committee, and Region councillors seem to have agreed to close ranks around GTA Pooling.

I am old enough to remember Hogan's Heroes, a great tv comedy from the 60's. When questioned about some misdeed, Sargeant Shultz would say with his German accent "I know nothing! I see nothing! NOTHING!". He eventually got cancelled with the rest of the show.

I think as far as surpluses are concerned, this isn't that big in the grand scheme of things. A vast majority of this is due to the fact it barely snowed last year, and the rest is probably due to budget cuts made in the departments.

I think we should give credit to them, that there even was a surplus after the rough economic year we had.

According to staff report CORS-030-10,

http://www.milton.ca//execserv/agendas2 ... ntries.pdf

the savings in 2009 Winter Maintenance was $314,000. After offsetting deficits, the Engineering Services department contributed only $26,488 to the $1,877,800 Milton surplus reported for 2009.
That's only 1.4%.

I thought the Champion article actually did a pretty good job of summing up where the savings came from and the council has been open about it. Better than expected revenue, cost cutting measures taken by staff, some savings on winter snow removal tasks. Good on them. As I've said I'll take the surplus and have it go into reserve fund as opposed to deficit any day. They won't and can't hit a perfect balance so to err on the plus side it just fine. The federal liberals were always being critisized for running a surplus and Mr. Harper reduces GST claiming it's too high - boom, recession, record defecits and back to adding to federal debt. Glad the town's run better!