Halfway through the year, it appears the City of St. Albert will stay in good financial shape until year-end and beyond.
The city has brought in $74.4 million in revenue so far, which is 51 per cent of the 2016 budget, while expenditures are $44.6 million, or 46 per cent of the budget.
Financial Services Manager Ann Victoor explained the forecasted surplus at year-end is somewhat less than that amount, being roughly $2.8 million.
“This is primarily due to an increase in fire-service recovered cost, planning permit revenue, photo radar fine revenue, RCMP and snow-removal contract savings,” she said.
The increase in fire-service revenue and expense relate directly to the work city firefighters did in response to the Fort McMurray wildfire last May. Several crews rotated into that community to help bring the fire under control.
On the capital-expense side, Victoor explained there are 172 municipal capital projects underway in 2016, including several dating back to 2014 or sooner, that are still ongoing.
In total, the city has only paid out $46 million of the budgeted $127 million to complete all the capital projects council has already approved as part of prior years’ budgets.
Utilities are also on track for cost recovery, with both revenue and expenses coming in at nearly 50 per cent halfway through the year.
In terms of overall financial health, the city’s assets far outweigh its liabilities. In addition, the city has about $180 million in cash and investments, while the city’s debt load is roughly one quarter that amount at $43.5 million.
The city of St. Albert’s reserves have nearly tripled over the past four years, with most of that increase coming from off-site levies. As of June 30 the city’s reserves sat at $122 million, with $68.7 million uncommitted as of year-end.
“This positions the city to provide stability in property tax, contingency funding, and reduces the need for debt financing,” Victoor said.
This is roughly triple the amount of reserves the city held in 2011, which was about $44 million. The rationale for why that figure increased so significantly was presented in a report responding to a June 7 information request from Coun. Sheena Hughes, which showed a significant portion of the increase came as a result of off-site levy reimbursement.
Finance Director Diane McMordie explained money is constantly being put into and pulled out of reserves on an ongoing basis in accordance with departmental budgets, but the overall increase can be attributed almost entirely to the reimbursement of off-site levies, which the city charges developers.
Essentially, developers are required to pay the cost of infrastructure like roads and sewers in new developments. The city pays the up-front cost of those projects, and then developers pay the city back once the development is complete.
McMordie explained much of the funds now in reserves will be used to provide the up-front cost for future developments and capital projects. For example, she said $10 million would come out of reserves to fund the major trunk sewer project known as Project 9, which is still in the planning stages.
