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City nets $1.3M surplus - update

The city is poised to end 2009 on a green note with a $1.3-million operating surplus that’s nearly double projections from just two months ago.

The city is poised to end 2009 on a green note with a $1.3-million operating surplus that’s nearly double projections from just two months ago.

City council reviewed the preliminary year-end figures at a finance and audit committee meeting Monday. The operating surplus is partly the result of an increase in revenue from development activity, a better showing at Servus Credit Union Place, and with extra dollars from emergency dispatch.

Council will review the final numbers in March, when they decide what to do with the surplus cash. Some members have already stated it should go towards operating expenses for 2010, to offset the 2010 property tax increase.

Coun. James Burrows thinks the city should hold back some extra dollars in case of a major spring snowstorm. He also said electricity costs for December were almost $200,000 over budget — a clear indication council should choose wisely where to spend the excess funds.

“I don’t really want to form out a position right now until we get some more information,” said Burrows. “I am certainly not [averse] to lowering the tax increase again, but once we get the final numbers then we can decide what we really want to do with the funds.”

Revenues from development permits accounted for more than half the surplus, coming in almost $700,000 more than budgeted. The city also received about $300,000 in revenue from Alberta Health Services for ambulance dispatching through the new provincial scheme.

A major fiscal surprise was Servus Place, which ended the year with a $480,000 deficit amid a rise in users. The facility was budgeted to lose $1.7 million.

The year-end numbers far exceed city hall’s projections from December, when the surplus was pegged at around $700,000. The surplus would have been even higher had it not been for flagging investments and income from natural gas franchise fees.

Dean Screpnek, general manager of corporate services, said administration underestimated the dollars coming in from development permits, and didn’t anticipate any revenue coming in from Alberta Health Services.

Administration is expected to recommend allocating the funds to any potential funding deficits related to approved capital projects.

City manager Bill Holtby recommends paying off an estimated $900,000 in internal borrowings to Servus Place. This would allow the city to save about $215,000 from the 2010 operating budget, slightly reducing the 2010 tax rate by a quarter of one per cent.

The municipal portion of the property tax increase currently stands at 2.89 per cent for homeowners and 3.19 per cent for businesses.

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