CORNWALL – The city’s auditors says the city is “treading water” when it comes to the overall finances of the corporation.
Auditing firm Craig, Keen, Despatie, Markell LLP presented highlights of its audit to city council Monday night.
“When you look at those statements, not much has changed,” said Ross Markel, suggesting no real change is a good thing.
The city has a roughly $177 million budget.
Cornwall finished 2015 with a $666,000 surplus – the money has been divided up into various reserve funds, including the winter control reserve.
“The surplus is roughly four-tenths (0.4) of one per cent of your budget. You are getting good financial information…timely and accurate information from your finance department,” Markell said.
The corporation is slightly bigger money-wise than it was in 2014, primarily because of contributions to the reserve funds. But those rainy day funds are still in a negative position, Markell said.
The value of assets were also up because of projects completed like the waste water treatment plant.
CFO Maureen Adams said it was a good thing that the city saw a bigger amount of supplementary taxation – taxation from development not planned for – than it expected.
Markell characterized the annual repayment limit – the amount the city can borrow without provincial approval – as “totally ridiculous.” That amount is $23,815,365.
Based on the assessment base of Cornwall to other Eastern Ontario communities, Cornwall has five times the municipal reserves than Belleville and Brockville.
Right now, the debt is roughly half of those municipalities, but that’s expected to change as Cornwall takes on the debt of the waste water treatment plant.
Markell suggested that other communities are going to be “catching up” to Cornwall by making investments in their towns and cities while Cornwall will be “treading water.”
Coun. Andre Rivette asked about the overall health of the corporation. “Healthy. Healthy. 98.6 per cent temperature,” Markell said.
The often discussed issue of spending the Progress Fund $25 million principal came up as Coun. Claude McIntosh asked if the city was using the fund properly.
“You set that loan up (from the principal from the Progress Fund) by bylaw and the bylaw is only as strong as the council of the day. It’s paying for the bulk of the debt on the Benson Center. Once it’s gone it’s gone and you will regret when it’s gone. It’s a sense of security,” Markell warned.
“My perspective…you keep it in place. Don’t start fooling around with it,” he said.