SUNDRE — The municipality as of the end of the first quarter of 2022 remained “in a very good cash position” despite increasing costs, council heard recently.
However, the fiscal year is yet young and statements from January to March offer “just a small glimpse” of the whole year, Chris Albert, director of corporate services, told local officials while presenting financial reports during council’s June 13 meeting.
“It doesn’t always provide the best indicators for what the rest of the year is going to look like,” said Albert, adding administration continuously monitors the municipality’s financials.
Offering council a few highlights from his report, Albert started off with a “pretty self evident” note.
“I’m sure everybody is aware, but utility and fuel costs are way up so far in 2022,” he said, adding those forecasted expenses have exceeded budgeted amounts based on last year’s numbers “right off the bat.”
Whether that trend continues remains to be seen.
“That’s not necessarily indicative of the rest of the year,” said Albert. “Those costs, they’re commodities – they should fluctuate. So, we’ll see how the year progresses.”
When costs unexpectedly increase, all of the municipality’s departments are mandated to work within their approved budgets, he said.
“So, if one cost increases above what we’re expecting, we have to figure out where to create savings elsewhere before we start relying on that rationale that costs have just increased. We should be able to work within in our budgets,” he said.
“We’ll see how that progresses throughout the year and if these costs stay extraordinarily high, or if – as some people are predicting – fuel costs are going to go even higher than they already are, which I hope not.”
Among the highlights Albert deemed noteworthy to present to council was under the municipality’s legislative services’ contracted services budget line, which he said is “significantly higher” than last year.
According to the figures in Albert’s report to council, that year-to-date expense amounted to $19,670, up from $2,168 at the same time last year.
“That is pretty much a direct result of legal costs in regards to FOIP (Freedom of Information and Protection of Privacy Act) requests for the fire department,” he said.
In the corporate services department, he told council revenues were “quite a bit higher” than at this time last year.
So far in 2022, that department’s revenue is at $107,351 – up from $73,234 recorded last year.
“And that is pretty much a result of penalties on delinquent accounts, both taxes and utilities,” said Albert. “So, we are seeing those penalties increase.”
Albert also pointed to a change in the Sundre Fire Department’s honorarium allotted to firefighters.
“Instead of paying them on an annual basis, we are now paying them quarterly,” he said.
Additionally, he said the costs of a number of large excavations carried out for the municipality’s water and wastewater infrastructure will not show up until the second and third quarter reports.
“Water and wastewater will be monitoring their budget and will give council more information as those costs start appearing into the appropriate quarters.”
As well, contracted services under planning and development were also up “significantly higher” than at this time last year, he said.
The 2022 first quarter amount presented in the financial report was $12,209, as compared with barely more than $100 in 2021.
“We have had some additional engineering support that didn’t happen in 2021,” said Albert, adding there were also some area structure plans that have come through.
“We’ve got a few more costs that are associated in there that we did not see at this time in 2021, which is actually a good thing because it means we are looking at growing. So, when I see those costs higher than the previous year, I’m actually happy.”
And while municipal facilities such as the Sundre Arena have incurred more operating expenses than last year during pandemic-related restrictions and closures, that’s simply as a result of the increased use.
“For 2022, we actually had full usage of the arena in the first quarter,” he said. "That’s why we’re seeing a lot of the expenses, but we’re well within budget. So, that’s a good sign.”
According to the background information in council’s agenda, which is available in full on the town’s website, the municipality as of the end of March was sitting in a cash balance position of approximately $1.5 million in the operating account, as well as roughly $868,000 in investment accounts and $6.7 million in restricted surplus accounts, representing a total holding of a little more than $9.1 million.
“We are still in a very good cash position,” he told council.
As for the restricted surplus account report, he pointed out an item that will not be reflected until the second quarter.
“For 2022, we have over $1 million in capital purchases that we’re planning on,” he said, adding among those expenses is a new pumper truck that’s on order for the fire department.
Mayor Richard Warnock asked if the municipality faced a risk regarding its ability to borrow as interest rates are set to increase.
“Our debentures are fixed rate, but do we have at risk any loans at this time?” Warnock asked.
“Currently, we do not,” replied Albert. “Last year, we got out of the operating line of credit that we had that was on a variable rate.
“Our only risk at this point in time is where interest rates go in the future, and the future debenture borrowings that we may do for large capital projects that are coming up.”
Without further questions or discussion, council carried a motion approving the report for information.
