Budget overruns in 2019 add up to $706,553

Masha Scheele

Council will decide at the next regular meeting on how to deal with unplanned expenditures of $508,034 in 2019.

Despite discussing how to cover the overruns at the regular meeting on Sept. 17, confusion around where money would come from and how the overruns came up remained.

A decision was made to bring it back to another regular meeting when the director of corporate services is available to answer some of their questions.

Administration recommended to cover the overruns by unspent one-time projects, including the CAO & Council Initiatives of $100,000, Legal Matters for $300,000, Dow Drive Property Development project for $25,000, as well as the Off-site Levy Bylaw of $70,000.

A review of current town financials determined unforeseen circumstances led to several unplanned expenditures that could not be absorbed in current operations, according to administration. 

The unplanned expenditures happened when a $72,477 increase was approved to resources for the remainder of 2019, $109,259 in legal costs overages due to required legal consultation and representation for employment litigation, harassment, and human rights complaints, plus an estimated $47,500 of additional legal costs in 2019, $365,267 in wage cost overages due to litigation and due process, plus an estimated $118,550 required for 2019, and other unplanned recruitment cost overages due to high turnover rate of approximately $9,000.

At the standing committee meeting on Sept. 10, Coun. Dewly Nelson questioned if these cost overruns were known at the time the additional positions were approved by council, as there was limited communication on the issue at that point.

“At the time, some of those things were known to me, some of them were still sort of to be finalized,” said CAO Martin Taylor. “I’m going to continue to be transparent. No CAO likes to bring this stuff forward.”

These overages, including the estimated amount for the remainder of 2019, come to a total of $706,553.

$214,019 of the cost overruns are covered within current budget savings, however the remaining $508,034 was not absorbed. 

“The majority of those savings are coming out of the development services budget, and due to extra wages within the department as they have a vacant position in their department right now those excess funds are not being used and can be put toward overruns,” said Carla Fox, director of corporate services on Sept. 10.

Mayor Marcel Michaels asked administration if a policy could be created for expenditures exceeding the budget.

“The only thing that is approved to be spent is what is approved through the budget process, adding policy that allows us to have signing authority to expend for certain emergencies would totally negate the Municipal Government Act (MGA),” said Fox.

“It’s actually within the CAO’s authority to make these allocations but out of respect to council and because we present projects at a line by line basis, and I committed to doing that with council, anything we want to change for unscheduled projects, we’re requesting your approval to be transparent.”

A contingency of $100,000 to account for some of the anticipated overages during 2019 budget deliberations was approved by council.

“Unfortunately, due to the state of the organization over the last few years, depressed culture, legal issues, and high turnover rates, further costs could not be mitigated,” stated the agenda.

Some of the legal matters originated as far back as 2016. 

The total of these cost overruns are not expenditures that can be taken from current services without severely affecting the current level of service, read the agenda.