Penticton needs to find $1.3M

Wayne Moore - Story: CASTANETJan 13, 2012 / 5:30 am
Over the next several days, Penticton City Council will have to come up with a way to find nearly $1.3M to add to the city budget.  That's the amount of the current 2012 deficit forecast by Chief Financial Officer, Doug Leahy. Under provincial legislation, municipalities are not, by law, allowed to run yearly budgeted deficits. Penticton Council will begin the long budget process Friday. Those deliberations will conclude next Tuesday. "What we are hopping is that council will then provide direction to staff as to how we are going to bring that budget down to zero," says Leahy. "We've presented them with some possibilities, some solutions and therefore they will either choose one, two or a combination of all. There definitely are some viable solutions and we will certainly await their direction."
Those solutions include:

• Utilizing Interest Stabilization Reserve - $400,000
• Reduce Equipment Depreciation Transfer - $3,000
• Utilize Prior Year Surplus - $500,000 or $800,000
• Taxation
• Combination Of All

The deficit derives from a desire to provide taxpayers with a 'zero base budget.' "That was our vision at the very start of this process. That's why we went back and said we have to try and find savings." Following a long, all encompassing departmental review, Leahy says the original budget was reduced by about $800,000 from the original $2.1M deficit forecast. "We had presentations from all management in a workshop setting. We had five days of critiquing each other's budgets. That's where the $800,000 in saving came from," added Leahy. "Its been very worthwhile. It hasn't been without some issues and council will be dealing with those." Leahy says staff is comfortable that they have looked in all corners of city operations to find either money or cost efficiencies. In 2011, Penticton was able to come in with a budget that provided taxpayers with a half per cent budget reduction. The 2012 budget forecasts spending from taxation at $53.6M, $200,000 less than was spent from taxation in 2011.