Meaford Mayor Wally Reif read a statement at Monday night's council meeting referring to recent coverage of the Municipality's financial situation.

He explained that the surpluses recorded in the budget were misleading and were reported out of context.

Reif said financial consultant David Creech confirmed that the Municipality of Meaford surpassed its 2006 budget by $400,000 due to overexpenditures in tax related areas of the municipality.

Reif said that the surplus reported to council in 2006 had combined the total budget numbers from water, sewer, library, cemetery, roads and other funds as one lump sum, showing an overall operating surplus of $131,000.

"It's misleading to add all deficits and revenue together," said Reif of the reported surplus, adding that the numbers do not count against the tax deficit of $400,000.

This statement comes after a special council meeting was held last week concerning the 2006 budget.

At the special meeting, Creech told council the financial reports for 2006 were derived from a combination of capital projects, water and sewer operations and tax revenue and expenditures. He cleared up that the deficit was for tax related expenses only.

Deputy Mayor Francis Richardson said that the consolidated reports council was receiving did not accurately portray the financial situation. He said capital, water, sewer and tax should have been reported on separately for a true vision of the budget's surpluses and deficits.

Coun. Cynthia Lemon explained Monday night that the taxation shortfall was partly due to less federal and provincial grants than expected and less rental income from the marina.

Reif said he wanted to clear up the financial situation once and for all, stating that although the local media reported a surplus, the reality is the municipality ended up with a deficit.

Meaford resident Pauline Stanley voiced her concerns over the financial discrepancies and told council she was still not clear on why operations must be kept separate and what effect the deficit will have on the public.

Reif reminded council and the public that each section of the budget must be kept separate and considered separately when determining the overall financial situation as one does not count against another. Each operation's budget is its own and cannot be used to lessen a tax operation deficit.

In addition, council explained that the deficit was covered by a reserve fund and will not account for higher property taxes.