The city is expecting to post a surplus of $575,000 for 2010, council learned Monday.
The figure isn’t final and will be subject to the city’s annual audit process but it should be close to the final number, said finance director Gene Peskens.
“I feel pretty comfortable with the 575 right now,” he said. “It won’t be a million and it won’t be $200,000.”
In November Peskens was projecting a surplus of $326,000.
One large factor contributing to the surplus is the better-than-expected performance of the city’s investments, he said.
The city’s 2010 budget was $116 million so a variance of around $600,000 is just 0.5 per cent, a sign of tight management, said Mayor Nolan Crouse.
“It’s certainly better to be on that side than short so they’ve done a good job of managing it close to the bottom line,” he said.
Administration will bring a more detailed report to council on March 14 along with a recommendation of what to do with the surplus.
Crouse is aware that a segment of the populace will want to see their tax rates lowered.
“I have been in favour of doing some of that in the past,” Crouse said.
However, he has a couple of other ideas for this particular surplus, such as topping off the stabilization reserve, which would take more than $400,000 and putting money toward the national winter Special Olympics in February 2012. That’s expected to cost the city $300,000.
“Topping off the stabilization reserve as well as the Special Olympics has to be paid for, if not this year, next year,” Crouse said. “We pay for it sooner or later.”
He added that he’s “pretty flexible” and “willing to listen to the recommendation” of administration.
The stabilization reserve is capped at two per cent of the city’s operating budget or about $2.3 million, and is for one-time expenditures.
Council debated whether or not to amend the budget policy to allow surpluses to be applied to the tax rate. As it traditionally does every year, administration recommended that this option be eliminated from the policy so that surpluses can only be used for reserves, one-time expenses or repayment of debt. Council voted the other way, so reducing the tax rate will remain an option.
“I’d like to keep it in simply because it allows more flexibility and choice for council,” said Coun. Cathy Heron.
