Hudson financially hung out to dry: new audit reveals cumulative deficit
Auditors delivered the news about Hudson’s desperate financial situation at the November 18 special budget meeting.
If Hudson were a company, it would be seeking bankruptcy protection. This was the message Mayor Ed Prévost delivered at the November 18 special budget presentation meeting as the dozens of attendees sat in stunned silence while representatives from the accounting firm Goudreau Poirier Inc. presented the news.
“The numbers are astounding and they go back to before 2003,”said the mayor. The deficit for 2013 is $1,752,939. “I’d like to remind you that we inherited this situation,” he added. “We are quite livid about what former administrations did to rape, pillage… steal, your taxes and our tax money. We will be relentless in our pursuit of justice.”
The Goudreau Poirier auditors were not prepared to offer an opinion on the town’s financial situation, only their recommendations. In their presentation, they noted many incongruities and entries that could not be reconciled or explained over the last 10 years. “This could impact the interest rates on any loans, going forward,” said Prévost, “The reality of it is that we are broke.”
He pointed out that he would be meeting with the National Bank on Wednesday morning to inform them of the town’s financial situation. “Once they absorb that information, they could shut off our credit margin, which is $2.5 million, which would then inhibit our ability to pay our employees later than this week,” explained the mayor.
Part of the problem is the delayed grants from the federal and provincial governments for the water treatment system due to a detailed audit of the project conducted by the Ministère des Affaires municipals et de l’Occupation du territoire (MAMOT) because of suspected irregularities. The mayor indicated that some of this money would be forthcoming but not all of it.
The worst-case scenario as described by the mayor would be for the province to declare trusteeship of the town. “That is not the province’s preferred scenario,” said Prévost. The financial report was presented to the town council early last week. “We are in crisis management,” said the mayor. “What we have done is meet with our MNA, Marie-Claude Nichol and explained the situation, no holds barred.”
The town has requested that the subsidies for the water treatment system be released and that a retroactive application for a grant for the fire hall be considered. The mayor also explained that a long-term debt loan for an extended period of ten years is also a possibility. However, that will require special permission from MAMOT.
Further financial help will come from the proposed sale of property owned by the town such as the former medical center on Cameron Street. “These will not be sold at fi re-sale prices,” said the mayor. During the question period that followed, concerns were raised about the possibility of amalgamation with other municipalities.
The mayor assured everyone that council would do everything in its power to avoid that possibility. Your Local Journal spoke with Mayor Robert Grimaudo of neighbouring St. Lazare on the idea of a municipal merger. “Hudson is a wonderful community,” said Grimaudo reached at a budget meeting.
“And St. Lazare will always be there to support and help in any which way we can. As for speculation made that the two communities should somehow merge, that would require a great deal of reflection, negotiations, and public consultations.” Grimaudo went on to say merging would be an extensive process and he and the council has not in any way looked at the possibility.
“Mayor Ed Prévost inherited a huge mountain to climb,” said Grimaudo, “and what he needs to do might be insurmountable.” When asked if there is are shared responsibility with the Ministry of Municipal Affairs for the lack of proper reporting of finances by the town, Prévost replied there is.
He explained that although the province had sent letters requesting the information, they had not followed up in timely manner and previous Hudson administrations did not act on the request.
Council was met with several rounds of applause over the course of the meeting with residents expressing to the mayor and council they were happy to finally have the truth. Mayor Prévost also emphasized that the town will vigorously pursue, by legal means, the former auditing firm Bourassa Boyer for the amount of their invoice and other costs.
Just before going to press, Prevost told Your Local Journal the National Bank will continue to partner with the town and will work with elected officials to see them through until the new taxation year. The 2015 Budget will be presented on Wednesday December 17 at the Stephen F. Shaar Community Centre.