Although the specifics won't be available for another month, St. Albert will close out the books on the 2011 financial year in the black.
The standing committee on finance (SCOF) heard at its meeting Monday night that, with the exception of a few adjustments that might occur between now and next month, the city will bank a $645,000 operating surplus from 2011.
In presenting the numbers to councillors, sitting as SCOF, acting chief financial officer Ed Kaemingh said the estimate was preliminary, and exactly what led to the surplus has yet to be fully accounted for.
"There's no meaningful analysis at this point," Kaemingh said when asked what accounted for the surplus. He did say generally that two specific areas led to the figure — "favourable variances" in the city's insurance, and some investments.
The city's utilities also realized a surplus for 2011, but per council policy, that will be transferred to the utilities reserve, leaving the utility with a net-zero balance for the fiscal year.
The $645,000 surplus represents a 0.5-per-cent variance from last year's total operating budget of $122 million; meaning budget estimates came within one per cent of what was actually spent. Kaemingh supplied councillors with charts demonstrating such variances have become incrementally smaller over the last five years. In 2007, the surplus was $1.5 million or 1.3 per cent of the total budget. The city recorded successive surpluses of approximately $1.3 million in 2008 and 2009 but that number dropped to $530,000 in 2010, amounting to a 0.5 per cent variance for that budget year.
"I think we should be pleased that on a $122-million budget we would be on the right side of it," Mayor Nolan Crouse said. "Congratulations to city council for setting a tight budget and to our staff for managing it that way."
Recommendations
Kaemingh and the financial services staff will spend the next month finalizing the 2011 numbers before returning to SCOF on March 12 to present its recommendations for what to do with the surplus, as well as a list of completed projects and projects that will need to be carried forward.
Per council policy, the surplus can be used in one of three different ways — it can be pumped into the city's reserves, it can be used to repay any outstanding debt, or it can be used for a one-time expenditure.
SCOF will also receive three lists — one detailing the completed capital projects, one seeking approval for carrying forward incomplete capital projects and another to carry forward incomplete operating projects.
The completed capital projects list will detail each finished project, as well as whether the project came in over or under budget. Any under budget funds can be transferred to reserves for future projects. Those over budget can be funded from surpluses from other projects or from reserves.
Both incomplete capital and operating projects must receive council approval to continue, or carry forward.
Councillors will receive the final audited financial statements in April before setting the mill rate in May.
