Dipping into reserves negated city surplus, councillor says

If it seems too good to be true, it usually is. At least, that may be the case for the city's 2007 operations budget, according to one city councillor.

If it seems too good to be true, it usually is. At least, that may be the case for the city’s 2007 operations budget, according to one city councillor.

“It wasn’t all rosy,“ Coun. Doug Graham commented at Monday’s standing committee meeting where council was presented with the 2007 financial statements for the city.

Valerie Anderson, the city’s manager of financial services, presented the year-end statement to council, showing a surplus of $49,976.

The surplus was arrived at by subtracting the water and sewer fund deficit of $162,958 from the general fund surplus of $212,934.

As Graham pointed out as well, the city dipped into a number of reserves throughout the year. It means there really is no surplus, he argued.

“We transferred almost $800,000 out of reserves in order to cover the deficit,“ he said. “And I think we should be perfectly honest and up-front.

“We had a contingency reserve that we raided for $775,000 to help pay off the deficit that we ran up during the year.“

The city initially adopted a more than $57-million budget for 2007, but over the course of the year, the city approved spending another $6.5 million, which brought it up to $64 million.

“The budget increases are mainly attributable to $5 million for re-budget requests to carry over funds from 2006 to 2007, $875,000 for the 2007 Hamilton Boulevard extension payment, $200,000 for ICSP funding from (federal) gas tax funds and $70,000 for Selkirk well development,“ reads the report Anderson presented to council.

One of the largest over-budget expenses was the city’s recreation facilities, which went $357,000 over-budget - $156,000 of that at the Canada Games Centre, $130,000 at the Takhini Arena and $71,000 of that at the Mount McIntyre Recreation Centre.

Much of that was due to the Canada Winter Games, which were held in the city in February and March 2007, said Anderson.

Other expenses that went over-budget were:

- an additional $621,000 to cover future employee benefits such as union contract provision and severance and such;

- an extra $71,000 in legal expenses for labour relations;

- an additional $117,000 in administration changes for pubic works;

- another $60,000 more for relocation and recruiting staff;

- an additional $39,000 for the annual audit;

- an extra $425,000 on snow and ice removal;

- another $127,000 for parks and playgrounds;

- an additional $77,000 in wages and benefits for planning services;

- another $380,000 in electricity costs; and

- an extra $133,000 in gas, oil and diesel costs.

Meanwhile, propane and heating fuel came in under-budget by $116,000.

Next week, council will vote on whether to approve the audit documents and whether to pay the water and sewer deficit from the water and sewer reserve with the general surplus going to the city’s contingency reserve.