The city's finances for 2011 continue to bounce from deficit to surplus to zero due in part to unexpected snowclearing expenses and paying out two severance packages, council heard Monday night in its third quarter report.
Six months ago the city forecast a deficit due to the late snow in the beginning of 2011 that pounded St. Albert, leading to increased snow-clearing costs. By the second quarter and heading into the end of the third quarter, it looked as if the city had turned that forecasted deficit into a surplus of $500,000.
But the snowclearing expenses, combined with severance packages being negotiated with former city manager Bill Holtby and former director of St. Albert Business and Tourism Development Larry Horncastle, have swallowed up the bulk of that surplus, leaving the city projecting a zero position by the end of the year.
"You know you don't budget for such things," said acting chief financial officer Gene Peskens, referring to the two severance packages.
"It has a big impact," he added, but warned focusing solely on those items as the reason there would be no surplus was too easy. "There is more to this than that.
"We still have some savings because we don't have to pay those salaries anymore. They are gone for a awhile, but it's more than just a quick calculation."
The city did see higher than expected revenues in the third quarter, due largely to a $2.2-million land sale. That money is subsequently stashed in a reserve intended to buy more land, which equates to a zero impact on the budget.
"What stands out to me is that we are still very close to our budget that was approved last year. There have been a number of variances … but we are still pretty close to what we anticipated," Peskens said.
Mayor Nolan Crouse echoed Peskens' comments, saying coming in at zero in a budget exceeding $100 million shows the city's commitment to fiscal responsibility.
"I'm OK with where we are," Crouse said. "It'd be nicer to have a surplus … and better than it was six months ago when it was reported we were going to take a loss."
The city has historically banked a surplus at the end of each year. All surpluses are plowed back into reserves.
Capital budget
Peskens told council there are currently 140 capital projects underway, accounting for $105 million of the budgeted $144 million.
Coun. Malcolm Parker expressed concern the planning and engineering department was simply going to "spend it all" as some projects, to date, have not been started but plans call for the funds to be spent, according to the report.
"It looks to me like we're not spending the money and getting [the work] done on time.
General manager Guy Boston explained the department has experienced some setbacks in staffing and in its work that have forced it to make "elective decisions" on which projects will go forward first.
Crouse encouraged Boston to get the work done.
"Let's be ruthless with our close-outs," he said.
