Wallace-Woodworth ratepayer asks about surplus

Dear Editor:

The RM of Wallace-Woodworth 2019 Property Tax Notices are in the mail. The RM advised that should ratepayers experience a large increase in taxes, it may be due to changes made by the Province of Manitoba regarding The Education Property Tax Credit. There are 437 roll numbers affected by this change at an average increase of $211.63 each. This is not a result of a decision made by Council, but the impact should and could have been mitigated by the $9 million in cash resources the RM had at their disposal during budget deliberations.

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At the Financial Plan hearing held on April 25, I was stunned to learn that the RM ended up in 2018 with an unaudited surplus of $1,640,000. How did that surplus occur? How did we go from correcting a $1 million shortfall to a $1.6-million-dollar surplus in the same year? While $580,000 of that is being carried forward to complete unfinished projects, what about the other $1 million dollars? What was the rationale in increasing expenses nine per cent over 2018 actual spending when several areas were underspent and clearly there have been surpluses in the past?

The increase in taxes in 2018, particularly in Farmland and Institutional, was not as a result of the increased assessments. Assessed value is only one factor that determines property taxes. The Municipality determines the amount of municipal taxes we pay.  

As of December 31, 2017, the RM had $14 million in Reserves and Nominal Surplus. $6.9 million was held in specific reserves, with $2 million of that in a General Reserve which can be used for any purpose. More importantly, but never reported at the Public Hearing, the RM had over $7 million cash in what is called Nominal Surplus. Nominal Surplus is a “rainy day” fund.

Sadly, Nominal Surplus and yearend results are not a fundamental part of the budget discussions on an annual basis. And, while the Municipal Board recommends that a Nominal Surplus be maintained, there are no regulations in the Act that mandate the amount. With the 2018 surplus of $1.6 million, it is conceivable that, when the audit is complete, the RM will be sitting on well over $8 million dollars in the Nominal Surplus, with no clear plans for its use stated by Council to ratepayers. Does the 2019 Financial Plan accurately show what is required to run the municipality or are we being overtaxed in 2019, only to finish up with a surplus yet again? 

Specific reserves are an integral part of planning. It is prudent to have a reasonable “contingency” fund for unforeseeable situations, such as in the General Reserve or the Nominal Surplus. However, with such excessive Reserve accounts, Council has missed opportunities to alleviate the financial pain ratepayers face when faced with high re-assessment values on their farmland, or when many, like this year, will face an increase in their taxes due to a change made by the Province.

I think that Council should consider the amount in surplus each year as they are deliberating the financial plan, and that information should voluntarily be disclosed to ratepayers annually. I also believe that if Council intends to use all or part of the Nominal Surplus for projects, they should instead establish a specific reserve and be transparent about their plans.

Respectfully submitted,

Sandy Heaman

Ratepayer RM of Wallace-Woodworth

 

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