The City of St. Albert ended 2023 with a $4.58 million budget surplus, which council has elected to put into reserves.
The surplus, according to the city's fourth-quarter report released on Feb. 9, resulted from a number of factors, including the city saving $700,000 on fuel purchases from lower-than-expected costs, and saving over $1 million on staff salaries because of position vacancies.
The fourth-quarter report shows the public operations department had the highest budget variance, as it finished the year $2.1 million under budget. The department's surplus was due in part to generating $415,000 in more-than-expected revenue from transit ridership, spending $853,000 less than expected on snow clearing and street sanding because of reduced need, and the $700,000 in fuel savings.
Another city department that finished the year substantially under budget was community and recreation services, which posted a nearly $1.5 million department surplus.
The report states community and recreation services generated $417,000 in greater-than-expected revenue from facility admission fees and recreation passes and $184,000 in greater-than-expected revenue from lesson fees. However, while recreation revenue in 2023 was better than expected, the report shows the city came $93,000 short in revenue from advertising in city facilities than what was expected, and $133,000 short from cultural event ticket sales such as Arden Theatre shows.
The community and recreation department also saved $819,000 on staff salaries because of job vacancies.
The city's planning and engineering department was the only city department to go over budget in 2023, according to the fourth-quarter report, although the department was only $194,000 over budget mainly as a result of higher-than-expected costs for powering the city's street lights.
Another aiding factor behind the $4.58 million surplus was that the city generated $3.86 million more-than-budgeted-for investment revenue, which was slightly offset by high interest rates, leading to $2.7 million in unexpected interest-related expenses such as debt payments.
During the Feb. 13 standing committee of the whole meeting, St. Albert Mayor Cathy Heron said a $4.58 million surplus may sound significant, but it represents a small percentage (2.3 per cent) of the city's 2023 budget.
“Thanks for the tight budgeting,” Heron told administration. “It sounds like a lot of money, but it's pretty good as a percentage of the total budget.”
Likewise, Coun. Mike Killick told the Gazette he thinks the surplus representing a small percentage of the budget is a compliment to city administration's budgeting.
“It's a significant dollar amount but a small percentage of the overall budget, so it shows that [administration is] doing a good job coming in on target and on estimates,” Killick said.
“We all got a bit of a break on shovelling our driveways, although it's kind of scary when we think about not getting enough moisture.”
Coun. Sheena Hughes wasn't as pleased with the surplus amount.
“While we can say it's just two per cent of the budget, the reality is that we collected $4 million more in taxes than we needed to to operate the city last year,” she said in an interview.
“I do not want to see that number get even higher next year because that's $4 million that was collected that was not necessary for operations.”
On Feb. 13 council approved administration's recommendation to split the surplus evenly between two city reserves: the municipal land and facilities reserve, and the capital reserve.
The municipal land and facilities reserve is used to purchase land, refurbish city facilities, and develop city-owned commercial land, while the capital reserve is used for a myriad of projects and capital expenditures.
Each reserve will receive a $2.29 million boost as a result of the 2023 surplus.
According to a report to council written by city financial manager Brenda Barclay, the municipal land and facilities reserve's new balance will be about $3.7 million, while the capital reserve's balance will be about $5.3 million.
“Over the next several weeks, there will be some adjusting entries that may impact the final operating position,” Barclay wrote, referring to the annual audit of the city's finances that takes place in March and April.
“These adjustments will be finalized as accounting cutoff dates are realized and further direction regarding various issues is received from the auditors.”
