The City of St. Albert will transfer an expected $3.9-million surplus to a reserve it has depleted over the past year, council heard Monday.
The $3.9-million surplus is the result of a combination of vacancies, facility closures, and delayed projects mainly due to COVID-19, interim CAO Kerry Hilts told council. While council typically uses a portion of an annual surplus to top up its stabilization reserve — cash used for one-time or unanticipated events — administration noted that this year the reserve is at an all-time low.
Brenda Barclay, city manager of financial operations and reporting, said this past year council has used about $3.8 million from the stabilization reserve. Council typically withdraws an average of around $1.8 million from the reserve each year, said Anne Victoor, the city's manager of financial services.
Currently, the uncommitted portion of the stabilization reserve sits at $720,340.
“We have not seen the balance this low in the uncommitted portion of the stabilization reserve,” Brenda Barclay, city manager of financial operations and reporting, said.
Some examples of council decisions that pulled money from the stabilization reserve over the past year include: $135,000 for solar-farm pre-construction work, $100,000 for a library audit, and $325,000 for comprehensive public engagement on the names of city infrastructure.
At a Feb. 7 meeting, council voted to put $300,000 from the stabilization reserve towards an infrastructure opportunity, the details of which were discussed in camera. According to the meeting’s agenda, the conversation was held in private because it could affect the city’s competitive position and/or interfere with contractual or other negotiations.
Council also previously withdrew the same amount — $300,000 — from the reserve the year before on March 15, 2021, also citing an infrastructure opportunity.
Council recently voted to cancel its $1-million waste-to-energy pilot project, restoring $944,000 to the reserve.
“It’s great that we have this surplus, but if we didn’t have it and if we hadn’t unfunded the waste to energy, we would have no money in that account,” Coun. Sheena Hughes said. “We’d actually be overdrawn.”
Hughes put in an information request to seek additional details on how the reserve was spent over the past year. As with all information requests, the results will be publicly available on the city’s website.
“I think that we’ve been taking this fund for granted,” Hughes said. “We thought that we’d always have millions in there and that we had a comfortable cushion ... so these numbers are a surprise for us.”
Coun. Ken MacKay seconded Hughes, noting surplus funds are the sole source of funding for the stabilization reserve.
“We can see that we were slowly starting to draw down on [the reserve] right into dangerous levels,” MacKay said, adding that administration’s recommendation to transfer the entire $3.9-million surplus to the reserve is “a prudent decision.”
Council voted unanimously in favour of transferring the surplus to the stabilization reserve.
