SUNDRE — Town council recently heard from the director of corporate services during a departmental report on the second quarter that the municipality remains in “a good financial position.”
Chris Albert told elected officials during the regular Sept. 12 meeting that “most of our results are pretty much where I’d expect them to be about halfway through the year.”
That being said, Albert reminded council the financial information presented was a recap of revenues and expenses to the end of June.
“There were some surprises throughout the year,” he added. “It always happen. Our goal now is just to account for them and course correct as we need to.”
Overages in certain areas are often offset by other line items coming in under budget. Variables that cause financial forecasts to fluctuate up or down include but aren’t limited to factors beyond the municipality’s control, such as staff positions that have been advertised but remain vacant, emergent issues pertaining to for example infrastructure repairs, and the unpredictable and potentially volatile price for commodities such as gas.
The pandemic of course also had impacts, such as reducing revenue from user groups at municipal facilities, but also bringing well below budget anticipated travel expenses to conferences and events.
Corporate services was among the numerous departments Albert highlighted.
“The revenues for 2022 are higher than both 2021 and budget,” he said, adding the department’s revenues are generated largely through penalties and interest on bank accounts.
“Interest rates in this particular case have been favourable in terms of savings, so we have earned more interest,” he said, adding there so far in 2022 has also been a higher level of penalties or delinquent accounts.
Revenues under fire services were also “significantly higher” than last year and budget, he said.
“That is pretty much a sole result of increased call volumes,” he said. “If current trends for 2022 stay the same, it looks like fire services is set to exceed another record in terms of call volumes for this year.”
However, he said there were also a lot of equipment and vehicle repairs, including the re-certification of breathing apparatus that had not previously been done.
“This is one of the areas where we’ve come across some surprises in 2022,” he said. “One of the big expenditure in early 2022, is their breathing apparatus and the tanks that they wear.”
The apparatus are to be regularly re-certified every five years, and many were found to be in desperate need of servicing.
“I think we ended up with 15 or so tanks that needed to be either replaced or repaired in order to get them re-certified,” he said, adding vehicles have also required repairs.
“Once all that’s done, we do not anticipate those numbers continuing [to increase] into Q3 and 4.”
Many roads department expenses under contracted services will appear in the third quarter reports because June was a wet month that forced a lot of projects to be postponed later into the summer, he said.
The water and wastewater department also discovered some unanticipated major leaks that required urgent repairs, but Albert said fewer such major repairs are anticipated moving ahead into the second half of the year.
Regarding the gas department, Albert said members of council might have noticed that both revenues as well as materials and supplies “are significantly above both budget and prior year. That is strictly because of gas purchase prices – the price of natural gas, as we all know, has kind of gone through the roof in 2022.”
That is reflected in both revenues and expenses, he said.
“We buy the gas and we sell it for what we buy it for with a slight mark-up.”
As of June 30, the municipality had about $3.8 million in its operating account with an additional roughly $872,000 in investment accounts plus approximately $6.7 million in restricted surplus accounts representing a total holdings of nearly $11.5 million, according to the background information outlined in council’s agenda package.
“We are in a very good cash position,” said Albert, pointing out there remain some major budgeted capital expenses on the docket.
“The biggest one of note to remember, is the new wastewater treatment facility,” he said. “We do have the cash ready to pay for that when our portion of the payment is due.”
Coun. Connie Anderson asked how much that town’s portion of the bill would be.
“Our portion is about $4 million,” said Linda Nelson, chief administrative officer.
That project’s cost of about $11.5 million is being largely borne by provincial funding in the amount of $7.5 million.
Following Albert’s presentation, council proceeded to carry a motion approving the report for information.
