Village of Morrin draft operating budget sits at $49,000 deficit

·4 min read

The Village of Morrin’s acting council noted at the regular council meeting April 21 the municipality’s financial situation could result in a 2021 tax increase.

Official Administrator (OA) Harold Johnsrude presented the draft 2021 operating budget, and immediately noted that budget was a deficit.

In his memo presented at the council meeting Johnsrude stated several things within the village’s finances needed to be addressed “due to their significant nature.”

Johnsrude then said, “The village is in a difficult financial position.”

The OA noted the operating budget as of the council meeting sits at a $49,000 deficit, and stated since it was a draft document it would not be available on the village website, but physical copies would be available at the village office.

Johnsrude pointed out several village sources of revenue and expense remained at their 2020 levels, and these probably needed to be discussed, and he mentioned utility rates several times at the meeting.

The OA noted most municipalities run their utility departments, such as water, sewer and garbage pick-up, at levels sufficient enough to pay for themselves but Morrin currently doesn’t do that.

The OA noted the utilities are being subsidized by the village.

Johnsrude stated the operating budget was drafted in such a way that no increases to rates were made, hence the deficit.

During the discussion it was also noted that the village’s recent commitment of $50,000 to the Friends of Morrin School still stands and will be made in five annual payments of $10,000.

The OA noted that, as an administrator appointed by the Minister of Municipal Affairs, he was loathe to make any significant financial commitments but added that some issues in the village’s finances needed to be addressed.

He also noted the 2021 operating budget will return to the May regular council meeting where the capital budget and property tax bylaw will be presented.

Since the meeting was being held over the internet via Zoom, Johnsrude gave the public a chance to ask questions about the draft operating budget, but there were none.

2020 financial statement

The village’s official auditor Monica Faupel of Ascend Chartered Accountants presented the audited 2020 financial statements and gave the village a clean bill of fiscal health but, when asked, did voice certain concerns.

Faupel stated in her report that the 2020 consolidated financial statements did accurately represent the financial situation of the village as of Dec. 31, 2020. “The village was given a clean audit,” said Faupel.

She went through the statement summary in detail, explaining some of the numbers in the report, including Municipal Sustainability Initiative (MSI) grant funding and GST rebate amounts went down, deferred revenue was up to $928,297 and net municipal taxes in 2020 were $195,435.

Johnsrude had questions about unpaid taxes on certain properties and Faupel answered there had to be an evaluation of what the value of these properties were in relation to the tax bills owed.

Johnsrude noted anyone reading the financial statement should always take into account amortization, which is the annual decline in value of things like publicly-owned buildings and vehicles.

He asked the auditor if she had any concerns.

Faupel stated prior reports to the village should be reviewed and that she was concerned about how capital projects for the village were being funded, as that was not always clear.

Johnsrude moved and passed a resolution to accept the 2020 financial statements.

Engineering report

The council hosted Chris Watson of MPE Engineering who spent much of his presentation discussing a 2017 assessment of the village’s infrastructure needs, along with the water plant and the sewer pipe situation underneath 2nd Ave. North.

Watson noted the village’s prime project should be 2nd Ave. North, which has a price tag in the $600,000 range according to the 2017 assessment.

It was stated at the meeting four residences on that avenue have experienced back-ups or other problems.

Public Works Foreman Dave Benci pointed out though that the issues with village’s fire hydrants weren’t as bad as initially feared.

He stated it looks like only one hydrant needs to be replaced, while others have issues but are still usable.

Stu Salkeld, Local Journalism Initiative Reporter, East Central Alberta Review