Filling the gap with taxes: a correction

In its latest issue, The Review published a story quoting Mayor Guy Desjardins of Clarence-Rockland as saying the Prescott and Russell Residence was running a $3.2 million deficit. That proved to be erroneous and The Review regrets the error. 

The day the paper was published, we received a call from the United Counties of Prescott and Russell disputing that.

In a follow-up meeting with Julie Ménard-Brault, UCPR’s treasurer, she said the majority of UCPR’s departments are running deficits in the sense that their expenditures exceed their revenues. That’s the cost—literally—of offering services like daycares, social housing, road repair and emergency services.

Also, according to the Municipal Act, municipalities are prohibited from “incurring any indebtedness extending beyond the current year without the prior approval of the municipality”. Essentially they have to provide a balanced budget.

That’s where taxes come in.

The total revenue generated through taxation is distributed among every department to fill the gaps and ensure ends meet.

This year, UCPR raised a total amount of $22.7 million in taxes.

In the case of the residence, this year’s budget projects total expenditures to be about $16 million and revenues to be about $10 million (including provincial subsidies and resident fees), which leaves a difference of $6 million. Therefore, $6 million of that $22.7 million will be allocated to the residence so its final budget balances at the end of the year.

That is how the majority of the departments work in UCPR.

According to the Statement of Operations presented at the council meeting, the residence’s expenditures at the end of July, totaled $8.4 million and its revenues were $5.8 million. So, $2.6 million of the estimated $6 million it will cost to close the gap has already been spent. According to Ménard-Brault, that puts the residence on track with budget projections.

Those projections are what Desjardins took issue with and the reason he’ll be bringing up the possibility of a management review at the next Committee of the Whole meeting on October 11.