The city came out $1.5 million ahead on its 2021 tax supported operating budget, and the extra funds will be put towards several city reserves.
In a report presented to council committee Monday evening, city CFO/treasurer John Henry explained the city’s 2021 budget varied from its actual financial results, and that the favourable variance in last year’s budget was partially due to the pandemic.
“The big theme really in many of these variances was really related to COVID,” Henry said.
The staff report outlined a number of budget variances, some of which include:
- A $1.062 million 'favourable variance' for transportation services, $537,000 of which is owing to "positive winter conditions and staffing shortages."
- A $370,000 favourable variance in recycling and landfill, which is largely due to higher than anticipated landfill tipping fees and garbage tag sales totaling $198,000.
- A $985,000 favourable variance for facility operations, owing to pandemic facility closures that brought utility savings of $600,000 and labour savings of $260,000.
- A $1.4 million 'unfavourable balance' for recreation, owing primarily to the pandemic, as revenues in programming, facility rentals and parks were significantly restricted by public health measures.
The total $1.5 million in favourable variance accounts for 2.15 per cent of the city’s $69.7 million net expenditure budget for 2021, excluding property tax related revenues. The staff report states that a 2 to 5 per cent variance is normal.
“The city overall was in a better position year-over-year, so we're pretty comfortable there, but there's still work to be done,” Henry said. “There's a few reserve groups which have improved, but they're still in a relatively negative position and we're building on that.”
Of the $1.5 million "favourable budget variance", $536,778 will be transferred to the city’s winter stabilization reserve; $217,023 to the tax appeal reserve fund; $178,458 to the building standards service continuity reserve fund, as per the city’s reserve and reserve fund policy.
The remainder of the city's budget variance will see $510,387 transferred to the city’s general asset management reserve fund, and $56,710 to the tax rate stabilization reserve,
Coun. Jay Fallis questioned whether some of the funds might be contributed to the city’s affordable housing reserve, as well.
“I want to propose that … $150,000 (of the $510,387 going to the general asset management reserve) be allocated to the city's affordable housing reserve,” Fallis said.
“The reason being is, of course, all the challenges around affordable housing in the city. I think it's very appropriate that we start looking at trying to allocate as much as we can to the reserve, but also just with big decisions that we anticipate coming, it would be best to prepare ahead," said Fallis.
“If there's any justified reason for us to consider an exemption to a policy, I would certainly support that conversation. The only thing I would dampen that suggestion with is … we did just set reserve policy (recently),” responded Mayor Steve Clarke. “We have one hell of a housing crisis, and there may be different ways of looking at that or addressing that, so this conversation is not over, I can assure you.”
Henry said the city is currently undergoing its annual financial audit, and the numbers reported to council committee may be subject to change.
“The city is currently engaged in the annual financial audit, so the figures could be subject to change,” he said. “At this stage, we're pretty comfortable with these figures and findings, but if there is anything that comes with the audit that's material, we'll be sure to notify you accordingly.”