The City of St. Albert is forecasting a $2.82 million budgetary surplus for the year, according to the third-quarter corporate report published this week.
The expected surplus is mainly a result of investment revenue, more-than-expected recreation facility admission and pass sales and staff vacancies according to the report,
On a department-by-department basis, much of the estimated surplus is a result of the city's community and recreation services branch being on track to finish the year $1.15 million under budget.
The report shows that the branch is estimating $757,000 in savings from vacant staff positions, while at the same time generating $361,000 in more-than-expected revenue from facility admissions, as well as $196,000 in additional revenue from swimming lessons alone.
Daniele Podlubny, the city's interim director of recreation and parks, told council on Tuesday that the significant savings from staff vacancies were a result of a departmental reorganization that took place earlier this year, during which there was a hiring freeze.
Another factor aiding the branch's financial position this year is the $260,000 transfer from Sturgeon County as part of the cost-sharing agreement for recreation facilities that the two municipalities signed in May. The three-year agreement entails the county providing St. Albert $265,000 next year, followed by almost $271,000 in 2025.
Offsetting the branch's surplus, city spokesperson Marci Ng confirmed in an email, is the Arden Theatre is expected to fall about $175,000 short in revenue from ticket sales.
The city's emergency services department, which includes the RCMP, EMS, and St. Albert Fire Services, is set to run $519,000 over budget this year, the third quarter report shows.
Some of the main factors behind the department going over budget are significant revenue shortfalls ($653,000) from photo radar tickets, and an unexpected $415,000 in overtime pay for firefighters and police officers as a result of limited staff and wildfire deployments. Council heard on Tuesday that much of the overtime pay was specifically for the city's firefighters who were sent to help firefighting efforts in Parkland County and Edson in May at the beginning of the wildfire season.
Likewise, the city's planning and engineering department is also expected to go over budget this year by $323,000, mainly because of $184,000 in additional power costs for city street lights.
The public operations department is expecting to come $376,000 under budget this year, according to the report.
Aiding the department's surplus is $160,000 in more-than-expected revenue from transit pass and ticket sales, $55,000 in unexpected revenue from the municipal cemetery, and $288,000 in savings as a result of fuel prices dropping below expectations.
Public operations have also managed to save $110,000 as a result of staff vacancies.
The city's financial services branch is also forecasting a nearly $1.2 million department surplus this year, thanks entirely to $4.1 million in more-than-expected investment revenue.
The report states that the city has $270 million in cash and investments, and as of Sept. 30 of this year, the city's investment income has totalled roughly $6.8 million.
Offsetting the city's investment revenue is $2.7 million in higher-than-budgeted interest payments and charges.
Coun. Sheena Hughes said she expects the surplus to be much higher by the time the city's yearly finances are finalized next April, as the last quarter of the year, October to December, is when most of the city's contracts and construction projects are completed and reconciled.
“We will be looking at least at another $1 million in the surplus at the end of the year,” Hughes said, meaning that she expects the final surplus to be about $3.8 million.
“While it is good news because we'll have money to put into reserves, it's not so great news in that taxpayers paid $4 million more than necessary to operate the city this year.”
Besides getting an insight into how the city has performed financially through most of the year, Hughes said another benefit of receiving the third quarter corporate report now is that it gives council an opportunity to make budget adjustments for next year during 2024 budget deliberations next week.
“When I look at the quarterly report, especially this third quarter report, my focus is trying to find where do we have reasons for surplus that we could [make changes to] the budget going forward to reduce next year's upcoming taxes,” she said.
Coun. Ken MacKay said for the time being there was nothing in the third quarter report that stood out to him as something to be concerned about.
The savings from lower-than-expected fuel prices “shows you the volatility of the budget and the volatility of trying to forecast where you think prices are going to be because you just don't know what factors will be in place 12 months from now,” MacKay said. “You put in a budget line trying to extrapolate where you think it'll be and then realize you're for whatever reason you've substantially missed your targets.”
Prior to council voting to receive the report as information, Coun. Wes Brodhead said the city forecasting a surplus, especially for an operating budget of about $125 million, shows that the city is functioning responsibly.
“It indicates that our administration is on top of the myriad of things that go on within a corporation the size of St. Albert,” he said. “At the end of the day, the picture is that the corporation of the city of St. Albert is well run and is in line to be close to budget.”
“When you got a $130 million budget, a variance of what we're talking about here is immaterial.”
