Town funds transferred to two reserves

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By Kassidy Christensen


The town’s unaudited operating budget financial performance report, ending Dec. 31, 2017, was received by council during the April 9 meeting and a net surplus of $1,016,573, before amortization, was reported.

Council approved two motions, one to have administration transfer $850,000 of the net surplus to the community infrastructure re-investment fund (CIRF), and the other to have administration move $150,000 of the net surplus to the snow maintenance operating reserve.

Kola Oladimeji, the town’s chief financial officer, said under a section of the Municipal Government Act (MGA), municipalities must prepare “annual financial statements and the auditor’s report,” which must be submitted by May 1.

“This report has been presented to council ahead of the audited financial statement,” Oladimeji said, noting at the time the audited financial statement would be brought to council on April 23.

The net surplus was roughly “three per cent when you compare with the total approved budget of $30 million,” he said.

“As per the approved budget, it was a balanced budget of net zero budget that was approved by council," he said.

Oladimeji said the overall revenue for 2017 was about $33.2 million.

“This revenue excludes any provincial grants which are usually for renewal projects or both capital and operating expenses,” he explained.

Oladimeji said property taxes made up about 39 per cent of the revenue and 32 per cent was from sales of goods and services.

“Provincial grants for other operating activities represented about nine per cent of our revenue … we have other revenues, which accounted for about seven per cent,” he said.

Revenue increases were documented, Oladimeji said.

“We recorded (an) increase of about $121,000 on property tax revenue, which was partly due to Beachwood taxes (being) paid by the Government of Alberta,” he said, noting this was not budgeted.

Revenue increases also came from water sales due to a dry summer, which Oladimeji said amounted to about 4.5 per cent ($335,000).

“In the negative way we also recorded low revenue on building permits,” Oladimeji explained. “Building permits went down by about 30 per cent, which was due to a low rate of new construction.”

Investment income also saw higher revenue as a result of improving the investment management strategy, which was adopted in 2017, he said.

“That yielded about $400,000 (in) revenue for the town," Oladimeji said.

Total expenses, before amortization, approved by council amounted to about $32.2 million, he said.

“The salary and wages accounted for 44 per cent of our expenses, which is usually the normal trend for most municipalities,” Oladimeji said, adding municipalities allocate roughly 45 to 50 per cent to this expense.

“Contracted and general services accounted for 25 per cent, transfer to reserves for both capital and operating accounted for about eight per cent,” he said. “Utilities and material usages accounted for 10 per cent, and community groups funding accounted for three per cent of our expenses.”

Some savings were documented in the expenses, Oladimeji said.

“Salaries, wages and benefits, we recorded a savings of about $400,000,” he said, noting this was a result of having unfilled staff vacancies.

“This is a normal trend in most municipalities, you cannot get your staff vacancies 100 per cent filled,” he said.

“We try as (much) as possible to make sure we balance it through the budget process so we don't over tax the public,” Oladimeji said.

A cost savings on utilities of about $99,000 was reported, which was “based on reduction on the electricity bills due to usages,” he said.

“(A) fifteen per cent increase was recorded on material usages due (to) installation of new water meters and inventory usages,” Oladimeji said.

About 30 per cent (roughly $9.6 million) of 2017 expenses was from general government, Oladimeji said.

Roughly 20 per cent of expenses, or about $6.6 million, was for protective services, and Oladimeji said nearly $5.6 million, or 18 per cent, was spent on environmental services.

With recreation and culture about 16 per cent was spent, Oladimeji said.

“We spent six per cent on transportation services. Public health we spent six per cent of our expenses. Planning and development we spent about four per cent," he said.

“Administration is recommending transferring part of this surplus to the (CIRF) for future capital infrastructure needs on the existing infrastructures for the town and the snow maintenance reserve to handle future extended snow periods which (are) usually unpredictable,” according to council notes.

Town documents stated a net deficit has been reported by the town for the past three years.

“This trend has changed to show a net surplus as most of the deferred revenue from provincial grants are now being recognized appropriately following the approvals from funding organizations against previous expenses already recognized in prior years,” it is stated.

With the two money transfers, the CIRF available balance will increase to $2.85 million and the snow maintenance operating reserve will have an increased available balance of $218,000, town documents stated.




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