Kearney on the Rocks

(WARNING – This article contains material that might be upsetting some viewers)

As we mentioned, Kearney council has posted its year-end Budgetary Control Document for 2011, which claims a surplus of $132,094.41. But this doesn't make sense because in 2011 the Town’s revenues dropped by $1,090,332.21 (or 21.6%) from 2010.

But Louise Wadsworth’s explanation for the $132,094.41 surplus is that the Town’s expenditures are also down by $1,222,426.62 (or 24.2%).

That sounds good as a sound-bite, but how can council chop 24.2% out of the Town’s Operating Budget without jeopardizing the well-being of the Town, its services, maintenance, infrastructure, etc? Well, they can’t.

So, where did they getting the money?  Louise Wadsworth's answer was quite simple:

1. Don’t pay any of the Town’s debts and let the interest pile up as our credit rating goes down.
2. Drain the Town’s Reserves (emergency savings) and pray we don’t need a new fire-truck, roads vehicles, or building, road, trail, boat ramp, dock, or bridge repairs. Or have a flood, forest fire, or other natural disaster.
3. Don’t replenish or build up the Reserves and pray we don’t need a new fire-truck, roads vehicles, or building, road, trail, boat ramp or bridge repairs, etc. Stall major projects, such as the Build Canada Project to improve Kearney’s roads (and lose the grant money). The next phase of the project was to reconstruct portions of Highway 518 and Chetwynd Road.

Now take a look at the 2012 Budget.

Revenues for 2012 are predicted to be $3,790,106.00. This is down by another 25%, from 2011’s revenues of $5,051,096.00.  

The operating budget for 2012 is set at $3,555,330.00.  

That leaves just $234,776.00 for Capital Investment (That’s stuff like roads, bridges, docks, building and vehicle maintenance, etc).

But the 2012 budget expects Capital Investment for 2012 will cost an astronomical $1,667,178.00! With only $234,776.00, where are we going to get the other 1.4 million dollars?

Again, Louise Wadsworth’s answer is simple, if hard to find behind all the smoke and mirrors:

Deplete the Reserves. And try to fool all of the people, all of the time.

Council (really the Proudfoot Four) passed the 2012 Budget in record time, without consideration for the shortfall from 2011, and without consideration for Kearney’s future. At the rate Kearney’s resources are being depleted, the Town of Kearney could very well be bankrupt by 2014.

Are You Surprised?