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Norfolk posts surplus of $10.6M

$2-million loan from Legacy Fund `repaid’

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The pandemic year of 2020 was a crazy roller-coaster ride for Norfolk County and its finances.

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But, by the end of it, the municipality had posted its strongest financial results in many years.

Helped in part by generous federal and provincial subsidies, Norfolk council heard this week that the county’s 2020 surplus totaled $10.65 million.

Council has decided that the surplus will be allocated to priority projects that weren’t completed last year, bolstering depleted reserve accounts, and paying back the $2 million council borrowed earlier this year from the $70-million Legacy Fund.

At Tuesday’s meeting, Charlotteville Coun. Chris VanPaassen reminded his colleagues that the issue of borrowing from the Legacy Fund occupied council for nearly two days of the county’s 2021 budget deliberations in January.

Council relented when CAO Jason Burgess told members that a significant budget surplus for 2020 was likely and that the $2-million was needed as a place-holder to help the county meet its obligation under provincial law to approve a balanced budget.

“It is done,” VanPaassen said. “It is off the books. The Legacy Fund is the Legacy Fund once again and the public doesn’t have to worry about it anymore.”

In accounting circles, Burgess said the process just completed means the loan transaction has been “fully papered.”

“We borrowed money we never actually took and paid back money that we never actually took,” he said. “It was all done on paper. We never actually needed the withdrawal of funds.”

Burgess congratulated staff and council for pulling together during a difficult year to keep the municipality solvent. The surplus looks large, he said, but subtract the millions of dollars Ottawa and Queen’s Park provided in emergency assistance during the pandemic and the surplus is actually quite modest.

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Langton-area Coun. Linda Vandendriessche said Norfolk County needs to give credit where credit is due.

“The big issue here is thank God for the federal government and thank God for the province,” she said. “Otherwise, we wouldn’t be as pretty a picture as we are.”

Norfolk’s 2020 audited statement was prepared by Millards of Simcoe. At Tuesday’s meeting, council accepted staff recommendations for allocating the surplus. These include:

  • $3 million to Norfolk’s contingency reserve, which over the years had been reduced to nearly zero.
  • $450,375 of the surplus was derived from the library budget, so this amount will be allocated to the library reserve fund.
  • Another $3.2 million will be allocated to the county’s building reserve account to address repairs and upgrades to Norfolk facilities.

Projects that will be funded immediately include:

  • $150,000 for document digitization.
  • $575,000 on toxic gas well consulting and remediation in the Silver Hill area.
  • $75,000 on tourism re-branding.
  • $75,000 for a noise suppression barrier at the Tricenturena in Waterford.

A $1.1 million surplus in the rate-supported water budget will be allocated to a water capital replacement account. A $560,000 surplus in the rate-supported wastewater budget will be transferred to a wastewater reserve account.

The treasury report notes that Norfolk’s net financial position at the end of 2020 stood at $7.7 million. This compares with a deficit of $19.4 million at the end of 2019.

“Although the 2020 financial results showed substantial improvement over 2019, it is important that Norfolk County continue its efforts toward building a solid and sustainable financial foundation,” deputy treasurer Amy Fanning said in her report. “Particular areas of concern include the level of outstanding and projected debt and the depletion of reserve fund balances.”

MSonnenberg@postmedia.com

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