We are at the midpoint of Kearney council’s term of office and it seems an appropriate time to take stock of where we are and how the 'blog' should continue to serve the community in the most effective way. We have had a lot of fun highlighting the antics of Mayor Paul Tomlinson and the Proudfoot 4, and by doing so, we have helped to increase your awareness of the inappropriate, self-serving, bullying, harassing misdeeds of the Mayor and his gang from Proudfoot.
But recently, we have seen some very encouraging signs that a majority of this council have had enough and have taken very strong steps to put the Mayor in his place; a majority of council has asked for the Mayor’s resignation, has established national awareness of the Mayor’s petulant and childish behaviour, and has censured (reprimanded) the Mayor for bullying and harassment and has sought legal guidance on how to effectively shut the Mayor down. These same members of this council have made a commitment to the people of Kearney that they will follow through, which appears to be happening.
Things have been quite quiet since then which we interpret has a positive sign. However, much damage has been done over the past 2 years and this council will need every resolve to turn things around before this term expires in November 2014.
We, the Concerned Citizens of Kearney Blog Contributors, commit to you that we will continue to monitor and report, but our hope is that we will be able to shift our emphasis more to the positive and constructive as the majority of this council seems determined and committed to move in the right direction.
However, we ain’t there yet, and to kick things off, we are offering our perspective on the town’s financial status, the huge challenges before us, and expectations for 2012.
Kearney’s Financial Status – October 2012
(Reference Budgetary Control Document 30/09/2012)
As you will recall, in March 2012, members of the public discovered that, due to a shortfall in property tax revenue for 2012, the town was running a $600,000 deficit. Council did a lot of scrambling, whittled the deficit down to about $400,000, and blamed the issue on a computer glitch and the previous treasurer.
In June 2012, the town issued a revised budget which addressed the $400,000 remaining deficit. They balanced books and 'Good news!' you might say. Well maybe, but probably not.
Here are some points to ponder:
1) Revenues/Grants in the 2012 Revised Budget were suddenly increased by $171,825. Where did they come from and why did we wait for a crisis before identifying them between April and June?
2) Other Revenues: 2012 Regatta Revenue budgeted $30,000, actual Revenue only $16,270.83 due to council cancelling the big revenue generator street dance. Regatta 2013 may not have enough funds to continue even if there is a will to do so..
3) Property Tax Revenue: $2,935,460.000, down $3,192.00. Not so bad except the education portion is up $24,378.00 for a total shortfall of the town’s portion of property tax revenue ($2,208,815) by $27,570. This represents a drop of 1.2% in the town’s property tax revenue.
4) Financial Reserves: The town is taking $388,213.00 out of Reserves to fund their 1/3 portion of the Build Canada fund project, such as the Highway 518/Chetwynd Road reconstruction. Remember Phase 3 had to be deferred from 2011 because the town didn’t have enough money in 2011. 2012 will be worse than 2011.
5) The 2011 Audit Report discovered that the town ended up with a funding shortfall of $627,000 which wasn’t budgeted for in 2012, therefore this shortfall came out of reserves. The town’s accessible reserves before this, totalled about $1.5 million. Afterwards, perhaps $1,000,000 in reserves. With the $388,213 taken out as per point above, we are down to about $600,000 in Reserves.
6) Funding Reserves: Every year prior to this Council, a certain amount of funds were put into reserves to build the reserves and to help pay for huge capital costs, such as road reconstruction, bridge replacement (West Bay Bridge), boat ramps and docks, trails, parks, structures, vehicles, emergency equipment, and so on. This council has not only cut all contributions to reserves, they have cancelled capital investment in our roads and bridges which are starting to fall apart, and in 2 short years have managed to undo all the reserve building prior councils have done.
The bottom line with all of this is that in order to balance the 2012 budget, this council will need to virtually deplete the town’s reserves and defer expensive, but critically needed capital programs. Failure to adequately maintain its infrastructure is negligence and as we move forward, this town is coming perilously close to a huge liability exposure, which we cannot afford but will be on the hook to pay.
How did we get into this mess?
Council, for self-serving reasons, cut the property tax rate in 2011 by 9.5%, equivalent to property tax revenue of $237,500. In 2012, council for the same reasons, cut the property tax rate by another 9.5% or approximately $237,500. By end of 2012, the town is now down in operating revenue by $712,500 plus a cost of living factor (say 2%) of approximately $15,000.
But the news gets worse.
The new property assessments for 2012 are in and the Almaguin News says some property assessments for Kearney are up by 5%. Good news? You decide as the Devil is in the details. 5% phased in over 4 years is 1.25% each year, less than the cost of living increase.
But the news gets worse.
Increased assessments are phased in over 4 years but decreased assessments are implemented immediately, starting with 2012. You've paid your 2012 property taxes but if your 2012 assessment went down, you are entitled to a 2012 tax refund. These decreases in assessments run anywhere from 5 – 15% and higher. If the average decrease in assessments is 5%, then the town needs to cough up $110,440.75 to pay you back. Where will the town get the money to pay you back?
You guessed it – OUT OF RESERVES.
And the news gets even worse.
By cutting taxes in 2011 and 2012 by approximately 25%, depleting reserves to meet operational demands, and deferring critical capital investments, this council has few options remaining. Whether they come clean and say “we have made a big mistake” and then seek professional advice, or once again do a cover-up and blame game, remains to be seen.
However, the positive sign is that the majority of this council has seen the light, they are fed up with the bullsh*t of Tomlinson and Wadsworth, and they will take a strong stand to turn this “Titanic” around.
Kearney is “the Biggest Little Town” but Kearney is not too big to fail.
Please Note:
All of the above is based on publicly available information. If council or Kearney staff disagree with any of the above, we welcome them to provide corrections. We hope Councillor Dingwall will refrain from his standard and completely useless refrain of “IT IS LIES, LIES, LIES” and for a change try offering something intelligent.
Submitted anonymously.
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