The Rural Municipality of Lakeshore hopes to borrow almost $2.5 million to cover deficits its current council discovered after examining financial records going back more than a decade.
Council held a public meeting, June 8, in Ochre River to discuss introducing a bylaw to authorize the borrowing of $2,497,543 million from the Province to cover deficits for 2023 and prior years of $1,825,399, as well as $672,144 for 2024.
The mandate to borrow the money came from the Province, with the money to be repaid over 10 years at an estimated interest rate of five per cent per year.
The meeting, which was attended by close to 150 residents, lasted for more than two hours, with many residents asking questions surrounding the issue.
“The forensic audit, we can’t speak on that, because it has just been finalized with the insurance company and it’s now gone to the RCMP,” said acting reeve Michael Brunen, adding more information will be released later this week.
The Province of Manitoba was represented and some of the information they gave out during the course of the meeting was different than what the Lakeshore council was told before hand, Brunen said.
The Province, Brunen said, gave council two choices - borrow the $2.5 million with the 10-year payment plan or the Province would step in and eliminate the council and run the RM.
“How high do you think your taxes would go? Because we are one of the lowest tax-based municipalities in the province,” he added.
It was mentioned at the meeting that about 20 other municipalities in Manitoba are also having financial difficulties.
Council gave first reading to the borrowing bylaw, June 9, and is expected to give second and third reading, June 22, in Rorketon.
Brunen understands the frustration residents have regarding the deficits and how they came about.
“Naturally, you’re going to wonder, ‘where did we go wrong? What did you buy?’ Well, it wasn’t just one term or one year. It’s going back at least 10 or 12 years when this was first noticed,” he said.
“It goes back that far. Three terms. And that’s just a failure from a lot of departments, not just the CAO. It goes to council itself. The finance department. The reeve. The Province needs to step in and oversee this or have someone help us. Ever since amalgamation, really, things have gotten bad. It really has. We’ve seen the failures. And it’s happening all over the province.”
No deficits were found for the years 2020, 2021 and 2022.
Brunen pointed out the current council is the one that found the deficits because of a forensic audit being performed.
“They went back and found this by other council’s mistakes. Not saying we’re perfect either. But this is why,” he said, adding when he became acting reeve, discrepencies were found in the office, which resulted in the need for a forensic audit.
“During its process, these things were discovered and, of course, it went back and found more and more and more. But the forensic audit had nothing to do with the deficit,” he said.
Brunen was overwhelmed and pleased with the turnout for the meeting.