St. Albert finished the fiscal year in the black coming in with over $4 million in extra revenue.
During council on Monday afternoon, administration presented council with the preliminary numbers for the fiscal year and said that the city spending came in $4.1 million under budget.
According to Brenda Barclay, manager of financial operations for the City of St. Albert, the city came in at a 2.6 per cent variance from the budget of $157 million.
Diane McMordie, director of finance for the city of St. Albert, said that 80 to 90 per cent of the surplus is due to vacancies in the organization, a decrease in snow removal and the city issuing more business permits than anticipated.
Around $2.3 million of the surplus is due to savings on salaries and benefits for vacant positions at the city. Another $1 million is due to less snow falling than anticipated through the year.
St. Albert mayor Cathy Heron said that she is comfortable with the surplus because it is a small variance and it is due to unpredictable factors.
“You can’t predict those and snow removal we have to budget. We shouldn’t be disappointed that we have a surplus. As long as we are budgeting tightly and predicting as best we possibly can in our finance department, then it’s fine,” Heron said.
Another area that came in below budget was the contract for photo radar. This was offset by fewer funds being collected through photo radar and municipal enforcement tickets and an increase to the RCMP contract.
Stabilization reserve and capital reserve
Administration recommends council use some of the money to top up the stabilization reserve to the tune of $1.1 million. The stabilization reserve, which currently stands at $2.8 million, is used by council when emergent unbudgeted items arise throughout the year. The funds remaining after the final surplus numbers are released are recommended to be put in the capital reserve, which can be used towards capital investments. Right now it is estimated that $3 million will be left over for the capital reserve.
Barclay said that the administration chose these recommendations to help tackle the deficit in the capital plan.
“The reason for this recommendation is there is a considerable deficit in the capital plan and these funds would help alleviate some of this pressure,” Barclay said.
Councillors are able to weigh in on what to do with the extra money and must submit their notice of motion by March 1. Heron said that she will be putting forward a motion to fund a one-time environmental study that will evaluate the curbside waste program and will cost $50,000.
Heron said that every year she goes through the projects presented at the budget that went unfunded but require a one-time only influx of cash and opts to devote some of the surplus money to them. The mayor said that she proposes the rest of the cash follow administration’s recommendations.
“I take a one-time operating business case and I fund it out of the surplus,” Heron said.
The mayor said that typically the city opts to not fund ongoing projects through the surplus, such as lowering taxes, as it is an unreliable revenue source. Heron said using surplus money to lower taxes can make regular tax increases seem like larger tax spikes. If surplus money is not devoted to holding taxes lower year-over-year, a 2 per cent tax increase can turn into a 3 per cent tax increase when surplus money is removed from the equation.
“We have a lot of big capital deficit and I think the transfer of some of that money to the capital reserve is a good idea because we need to start trying to tackle some of those projects and we are still only looking at a 2.4 per cent tax increase,” Heron said.
The final surplus numbers will be presented to city council on March 19.