Financial forecast could force spending cutbacks

A dire financial forecast from a town planning consultant could force councillors to slash millions of dollars from next year's capital budget.
The $23.2 million draft 2010 Capital Budget was presented to a town committee Thursday. Under the current allocations in the budget, $8.9 million would go to roads and related infrastructure, $3.6 million would be invested in town fleet vehicles, and $3.1 million would be spent in public works. Water projects would receive $2.1 million in funding, while the wastewater and parks and recreation departments would each get $1.6 million, respectively.
However, councillors have asked staff to investigate the feasibility of deferring 18 projects — totalling $4.8 million in spending — to a future year.
"We can nickel and dime everything, but the operating budget is impacted; there's a cost for running these things," said councillor Dan Davidson. "We need to start building without borrowing, like a normal business would do."
The proposed budget would increase the town's portion of the municipal tax levy by about 3.7 per cent.
Projects being considered for deferral include a $3.1 million land acquisition and design for a Roads Department communications, servicing and operations centre, a $1.2 million ariel platform for Innisfil Fire and Rescue, and about $480,000 in planning studies regarding post-annexation, the Official Plan, Alcona and Innisfil Heights.   
Another $671,000 in land purchases and designs for fire halls in Cookstown, Big Bay Point and Lefroy, a library in Lefroy and expansion of the Lakeshore branch, may also be deferred.
"Staff have spent the last several months trying to put together budgets," said town CAO Dave Weldon. "We do have projections for future years, but the task at hand is for next year. We did keep in mind the long-term capital needs and financial capacity, and tried to smooth it out as best we could."
The list of potential deferrals were tallied in response to a report from a town consultant recently, which recommended council reduce its spending significantly, or it risks running out of debt capacity by 2012.
In coming years, the town could also face pressure to build a GO Transit train station, improve the Cookstown water supply, and provide servicing for Big Bay Point, Innisfil Heights and Big Cedar, according to the proposed budget.
While a substantial portion of the proposed capital budget will be paid for by development charges, revenue generated by OLG Slots at Georgian Downs, and long-term debt financing, the town has relied too heavily on those alternative sources in past years, said councillor Bill Pring.
"This $6 million in (OLG revenue), we're going to be using it all in this year," he said. "That's not a very good track record. We should be going the way of holding this back. I don't feel comfortable; who knows what's going to happen out there. We could be in trouble, and I'd like to have a bit more of a cushion. The portion that is not under the development charges has to be looked at more carefully. How much of a tax burden are we putting on the public, if we go ahead with these projects?"
However, several items did pass the committee's initial inspection. Nearly $7.1 million in funding would be allocated to Innisfil Beach Road, $990,000 would be spent on the 9th Line Bridge replacement, and $450,000 would be allocated to the Alcona Community Park construction. Another $800,000 would be designated to the Lakeshore water treatment plant's Phase 3 expansion design, and $540,000 would be allocated towards an Innisfil Heights water reservoir.
The Innisfil Beach Park parking lot would also receive $300,000 in improvements.
"We took some items and placed them aside," said mayor Brian Jackson. "That doesn't mean they'll disappear. We need a little bit more information, to see how we're going to deal with them and move forward."
The budget will receive further review at an upcoming committee meeting.