By Jody MacPherson
Fort McMurray Express, July 9, 1986
The search to locate where the city lost $1.2 million last year has been narrowed to three areas.
The EXPRESS has learned:
- Higher than expected employer contributions.
- An increase in spending in mobile equipment.
- And the delay in the start of construction of the water treatment plant all contributed to the city’s $1.2 million deficit for 1985.
Even though the city has been reluctant to publicly release a breakdown of the deficit, an informed source told the EXPRESS that one of the culprits in the city’s higher than usual deficit was mobile equipment.
Finance Commissioner Barry Miller confirmed that it account for about $700,000 of the deficit.
The City’s financial statements show that transportation services brought in only about half the revenue it had budgetted for but still spent almost as much as it had expected.
Mobile Equipment handles the maintenance, purchase and upkeep of its vehicles. It establishes a charge for the use of the vehicles by other departments.
Each user department then estimates the amount of money it will need to rent the vehicles from mobile equipment and indirectly pays.
However, departments made less use of mobile equipment, but the maintenance expenditures still went up. Miller confirms this.
The city’s financial statements show that the city went overbudget by almost $400,000 in “General Administration and Other.” Miller says employer contributions is included in this category.
Employer contributions are budgetted for all city personnel by the finance department. It estimated the cost to be approximately 10 per cent in 1985. A source says some departments went as high as 13-15 per cent — or $300,000.
Employer contributions include employee benefits, taxes and other money that comes out of an employee’s pay cheque, such as Canada Pension and UIC.
Another major contributor to the deficit was a decrease in revenues to the building inspection devision.
Miller says construction did not begin on the new water treatment plant until 1986, when it had been scheduled to begin in September or October of 1985.
He says the tenders had to be extended to give all the bidders a chance to get their proposals in to the city.
Miller says the delay cost the building inspection department up to $80,000. In total, building came in $130,000 over budget, he says.
Some of the other areas that have been identified as culprits in the deficit are “Council and Other Legislative Services” by $62,000 and recreation and cultural programs by $44,000.
Provincial and federal grant money which had been expected to arrive in December of 1985 did not arrive until January for the 1986 recreation and cultural programs.
The previous year, the money for 1985 had arrived in December of 1984 and was used immediately.
When the funds did not show up in December, the city was caught off guard and could not recover the costs.