By Pepper Parr
November 4th, 2021
BURLINGTON, ON
Municipalities cannot show a deficit. They can’t go broke either.
If their finances are suspect the province moves in and takes over.
What municipalities do is set aside money for those rainy days. Well run municipalities that are financially prudent, and the current finance leadership is prudent, as is the City Manager who struggles to impress upon Council the need to be more responsible when it comes to protecting the reserve accounts..
Early in the current council’s term of office at least two of the city reserve funds took a hit.
Four million was taken from the Hydro Reserve fund to pay for the wave break needed at the LaSalle Marina.
During the 2022 Budget Overview that took place Wednesday Council was shown the condition of the reserve funds
These are not healthy numbers.
The practice in Burlington has been to put10 to 15% of net revenues into Stabilization reserve accounts.
Currently the best the city has been able to do is set aside just 10.4%
Municipal old-timers like Tim Commisso and Joan Ford know all too well how foolish this practice is.
Councillor Paul Sharman has in the past refused to vote for budgets that chip away at reserve accounts.
The five newbies don’t have enough experience to fully realize how dangerous the approach the current Mayor has chosen to live with.
To be short $60 million in the Capital Reserve fund borders on recklessness.
There are no words for Councillors that do not put in place a long term plan to cover the shortfall of more than $70 million on corporate and other reserve funds.
One suspects that some members of this council assume that at some point all those high rise towers that they swore they didn’t want to see get approved would some day bring home all kinds of commercial and residential taxes that would solve all the problems.
And we elected them – didn’t we?
Perhaps its time the City adopted the guidelines the Provincial government established for NPO Condo Corps.Typically speaking, Condo reserve funds are set aside to maintain or replace identified assets, such as purchasing a new roof, buying a new pump, replacing and/or resealing driveways, etc. For good reason, Condo Reserve Funds cannot be used for items that do not appear on the reserve study. That way, no pressure can be exerted by special interest groups to spend the money on their pet project.