Community News

DIFFICULT DECISIONS ARE AHEAD

LAUREL J. CAMPBELL ljcampbell@live.ca

Powassan ratepayers can expect to see an increase in taxes this year as council struggles to recoup its financial position after several years of what is being described as "incorrect calculations."

Mayor Peter McIsaac released a statement May 5 saying that "during the 2022 municipal budget process council was made aware of incorrect calculations regarding municipal surpluses. It has been determined that this practice has been ongoing for many years. To correct this, the Municipality of Powassan has restructured some services and staffing levels and council believes these steps are necessary to put the municipality back on solid financial ground."

In 2021, council became aware that the audited reserves of $3 million were in fact a lot less and that the cash figure was closer to $1 million. At that time, then municipal auditor Dean Decaire also cautioned council about the amount of outstanding taxes that were on the books.

"Your accounts receivable re

main a little high," Decaire said.

As council entered into the 2022 budget process, McIsaac said "we found out that we were budgeting to spend money that wasn't actually there."

McIsaac said the miscalculations were brought to light by Powassan's new treasurer and the mayor is not pointing fingers at any staff member for doing anything malicious or intentional.

"This is a budgeting issue, not an accounting issue," he said. "and it doesn't take a big mistake to compound on the books over a series of years. It's taken a lot of digging to determine how this has happened and we are still looking into it."

To immediately address the financial concerns "council has gone through a human resources review and by doing things differently have found some (staffing) cost savings so we can correct this problem over the course of

time," McIsaac said. "From one end of the municipal structure to the other, we have done what we felt we had to do for get us back into the black."

Staff numbers have been tightened and in some cases hours have been cut.

"I know we have people that are not happy, and that's understandable, and council is not very happy to have done this to begin with," he said, admitting that cutting municipal expenditures while trying to retain services is a tightrope walk.

"We looked at the services we provide, and at how we could build a staff team that best supported those services," said McIsaac, "The idea was to limit the impact to the community."

In addition, council is continuing to push for collection of back taxes which in 2020 totalled around $1.8 million, but has been whittled down to around $1 million currently owing.

Powassan has been working with annual budgets of around $6 million of which over $3 million is generated through taxes and the rest from user fees and government grants.

"We're trying to do all this now so we are not burdening the next group of people coming to the council table with this situation," said McIsaac.

This story will be updated as Powassan finalizes its 2022 budget numbers and more details on restructuring become available.

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2022-05-19T07:00:00.0000000Z

2022-05-19T07:00:00.0000000Z

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