While the Municipality of Powassan has received a “clean audit report,” there are dark clouds on the horizon as the full effects of the COVID-19 pandemic have yet to be felt.
In a report to council delivered virtually, chartered professional accountant Dean Decaire of BDO Canada in North Bay said “there are no errors or irregularities” in Powassan's 2019 financial statement.
But, although taxes received in 2019 amounted to $755,596, tax arrears stood at $319,302.
And while Decaire said he hoped the municipality had exercised “strong collection” practices this year to rein in the late taxes, “COVID-19 happened and it may have impeded tax collections for 2020.”
The municipality, Mayor Peter McIsaac told Decaire, has been “working on rectifying” that situation.
“It's a priority,” McIsaac said. “We have to make sure we collect our taxes from residents and businesses.”
Later in his presentation, Decaire added a section dealing with the impact COVID-19 could have on the community in future. He said Powassan isn't alone and virtually all municipalities will face financial impacts from the virus.
“At this time, the full potential impact of COVID-19 on the municipality is not known,” he wrote in his report.
Decaire says the actual disruptions the virus has caused are expected to be temporary, but because the circumstances are dynamic in nature, the length of the disruptions and the related financial impacts can't “be reasonably estimated at this time.”
Decaire also addressed the municipality's future ability to deliver essential and non-essential services as a result of COVID-19.
When it comes to non-essential services, Decaire said, Powassan's ability to keep delivering these services and to continue employing the related staff will depend on what help comes from the provincial and federal governments.
With regard to delivering essential services, Powassan must focus on collecting the money it's owed, continue managing its expenditures, leverage its existing reserves, and access “available credit facilities,” Decaire said.
He said it is “fabulous” the municipality continues to pay down its long-term debt, which was $4.2 million at the end of 2019, or $118,000 less than in 2018.
Decaire also noted Powassan does a good job of controlling its operating expenses, which amount to $6 million a year. It posted a $742,000 budget surplus in 2019, in part due to government grants.
Decaire commended council for making “significant” infrastructure investments.
In the past two years, the municipality has spent more than $5 million to improve its infrastructure. Decaire made a point of saying residents often won't easily see the infrastructure because much of it involves water and sewer projects beneath the ground.
Rocco Frangione is a Local Journalism Initiative reporter who works out of the North Bay Nugget. The Local Journalism Initiative is funded by the Government of Canada.
