The Town of Huntsville’s financial position is forecasting an operating deficit of about $428,000, which is equivalent to approximately 1.4 per cent of its overall operating budget.
The news was delivered as part of the municipality’s Q1 report by Director of Financial Services/Treasurer Julia McKenzie at the May 27 General Committee meeting.
“The intent of this is to look high-level at some of the pressures that we do know at this time, and that’s to provide the committee with an update on these challenges and also because it’s the second year of a multi-year budget,” said McKenzie.
Some of the pressures on the Town’s operations budget include:
Revenue
- Loss of revenue from the Lake of Bays fire agreement, as the Township of Lake of Bays has decided to establish its own fire services.
- Lower building permit revenues as a result of lower building activity.
- Lower than anticipated dividends from Lakeland Holdings
Expenditures
- Unbudgeted increases under road expenditures, particularly as they pertain to winter maintenance and street sweeping.
- Inflationary pressures for contracted services.
- An impact due to fuel prices is also anticipated, although not considered in the Q1 report.
Mitigating factors
McKenzie was hopeful that some of the deficit thus far could be offset by:
- An increase in funding through the Ontario Municipal Partnership Fund, which she said staff is recommending be incorporated into general revenue rather than working capital reserves.
- Higher than expected tax penalty revenue, as well as fire insurance recovery.
- Expected staff vacancies.
McKenzie also said the Town’s Building Department is increasingly relying on reserves in 2026 due to reduced activity. “Which is why the initial reserve was put in place. It was to factor in the highs and the lows of that department. We have had significant periods of highs, so this is… going into a low period. By the end of the year, the department’s reserve is expected to be in the red by an estimated $900,000. “So this will require further review as we move through the year and look at some long-term strategies and forecasts of this reserve,” she added.
McKenzie said the municipality has moved to a contracted service model for cemetery maintenance, which is expected to have a neutral impact on the tax levy. She said staff resources are being reallocated to support road operations.
On the capital side of the municipality’s budget, McKenzie said, while there are some adjustments and timing changes, no overall impact to the levy is expected, “as variances are being managed through reserves, grants, and project deferrals.”
McKenzie said, looking ahead, staff will continue to monitor the municipality’s financial performance and “look for ways that we can mitigate this expected deficit and provide more detailed updates in Q2 and Q3.”
Huntsville Mayor Nancy Alcock said it was discouraging, but said discussions with Lake of Bays are still taking place. “So my comment would be we’re still in discussions with Lake of Bays around that, so there still is room there for what that dollar value will be… I know for future budgets we absolutely have to identify a significant change there,” said Alcock, but insisted that the impact it will have on the end-of-year budget is unknown.
“Again, it’s a similar comment around the building department. None of us will be surprised; we’ve known for a while. But I would also say, as we continue to monitor, I would hope that our chief building official would agree with this, we do have some significant projects coming down the pipe, and I think hopefully that will send the curve back up, maybe not to where it was, but it will be significant…,” said Alcock.
McKenzie said, “I don’t know that it’s true, but I certainly hope for the same thing…” Alcock interjected and said, “It’s important to note that we do in fact. It’s not like all building has stalled. We do have some significant projects in the works, and I’m very hopeful that we start seeing some numbers come back.
Deputy Mayor Dan Armour concurred. “I don’t think it’s unusual to see the first quarter report come in with a deficit, and that’s for sure. There’s probably still a lot of carryover taking place, so I am enthusiastic and think that the Q2 and Q3 are going to look way better than this one, but anyhow, keep up the good work,” he said.
“Obviously, those hits that director McKenzie mentioned are outside of our control, and I think the way you’ve managed it accordingly is to be applauded. I think we’re in better shape than we may have been, so I think that’s good,” said Councillor Scott Morrison, adding that staff and council have taken a lot of steps this term to encourage more development with the provision of items such as the accessory dwelling unit plans.
McKenzie’s report, as well as current and anticipated funds in reserves, can be found HERE (pdf).
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So the guy running for mayor applauds being $400k over budget? And he wants to use more of our money to develop beer lake? What could go wrong? Vote accordingly folks.
More mismanagement of tax dollars. No surprise here.