The Township of Muskoka Lakes is facing a deficit of more than $783,000, according to its 2025 Preliminary Year-end Finance Update.
A report outlining the financial shortfall was presented by Marilyn Jeffrey, deputy treasurer, during the April 15 general committee meeting.
The report states the deficit resulted from two major weather events, the delayed start of the Short-term Rental program, and various operational costs, including winter control, contract services, and building maintenance.
Staff said the ice storm cost the municipality nearly $937,000. While the province has committed to covering up to $847,000, the final amount is still pending review by the province.
During a review of operating expenditures, staff identified several unexpected costs that had been miscategorized. To correct these miscategorized costs, staff recommended reclassifying the expenses by retroactively creating new capital projects to accommodate over $62,000 in reclassified costs.
These capital projects, which include Port Carling Library locks, arena modifications, a new refrigerator for the community centre, and fire service equipment, were initially recorded as operating costs but meet the Township’s newly established capital asset thresholds.
Staff said the Parks, Recreation and Trails reserve fund is also in a deficit. The report states that while there is no formal guidance on having reserve funds in a deficit position, funds could be reallocated from the Tax Stabilization reserve to cover the shortfall.
After a lengthy discussion, Council approved the creation of the four capital projects to correct the misclassification and approved a transfer of $425,000 from the Tax Stabilization Fund to the Parks and Trails Reserve.
Further discussion will take place at a later meeting, as the numbers provided are preliminary and amounts may change pending final analysis and/or adjustments from the external auditor.
