Provincial funds 'big unknown' before budget finalized: Reynard

City council meets for its next budget review on March 5

City council is waiting to hear about its OMPF funding, Mayor Dan Reynard said. Erik Pindera/Daily Miner and News

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The city doesn’t yet know how much money it will get from the province through the Ontario Municipal Partnership Fund — a significant chunk of its yearly budget.

The City of Kenora received $3,218,400 through the provincial program in 2018, accounting for about 5.9 per cent of its $53.8 million combined operating and capital budget.

In this year’s preliminary budget, the city accounted for a $124,100 shortfall in provincial funds, Kenora’s chief administrative officer Karen Brown said.

“That’s because a portion of our 2018 grant included a transitional portion, which was going to be phased out until it was eliminated, and the guarantee for the northern municipalities, was that we would get at least 90 per cent of the previous year’s grant,”  Brown said.

City administration believes it will lose the entire transitional portion, but its 2019 preliminary budget includes $3,094,300 from the OMPF.

In December, the provincial Finance Ministry put the OMPF program, among other transfer payments, under review as part of its attempt to balance the province’s budget — Ontario currently has a $15-billion deficit, Finance Minister Vic Fedili announced lastSeptember. In 2018, the province gave “$510 million in funding to 389 municipalities through the program,” according the finance ministry.

Fedili told mayors across the province about the review in a Dec. 21 letter.

“We cannot reasonably say whether we will have any further reductions — it is dependent strictly on the province,” Brown said.

City council will meet for its next budget review on March 5 and is optimistic it will have a better idea of what the funding is by then, Kenora Mayor Dan Reynard said.

But as of now, Reynard said, council hasn’t seen anything from the province since Fedili’s initial letter.

“Everything is under review, and that’s the unfortunate thing,” he said. The province is “doing exactly what they said they would, but because they were elected in June… the timing is not working well for the municipalities.”

“It might even be reduced more, it’s such a big unknown right now – we’re in a holding pattern,” he said.

If the province significantly reduced or cut the OMPF completely, it would be financially catastrophic for Kenora and municipalities across the province, but Reynard doesn’t think that would happen.

“It hasn’t been part of the discussion, that would it be totally eliminated,” Reynard said.

“If the current government holds true, we’ll know what we put in our (preliminary) budget is true, but they could come back,” he said. “The PCs could say, ‘we’re satisfied, or they could say we’re going to phase in an additional clawback over the next five years’ — we just don’t know yet.”  

There is no deadline for the city budget, but city council’s best-case-worst-case timeline is between early March and early April, Reynard said.

By April, Reynard said, the only unknown aspect of the budget would be the provincialallocation. Without the OMPF money by April, city council “would have to make some tough decisions.”

epindera@postmedia.com

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