Town borrowing capacity improves from 67% in 2012 to 51%

Times Reporter    

 

The Town’s financial statements were audited and then presented to council at the April 3 regular council meeting. Darren Adamson from Young Parkyn McNabb LLP highlighted parts of the report at the meeting. 

Last year there was a fear that the Borrowing Bylaw being implemented could see the Town reach 66.7 per cent of its debt limit. In the recent audit Adamson stated that according to the debt limit calculation, which allows the Town to take on further debt without approval from the government, was $34 million. 

Currently the Town is sitting at $17 million, which is approximately 51 per cent of the borrowing capability. 

“Of course that varies each year depending on what your revenues are, but as the calculator sits right now there is still room for more debt,” said Adamson.  

Some of the other highlights from the audit include: the financial assets are at about $25 million, which is up from $19 million last year. The liabilities are approximately $22.9 million up from last years $19.4 million.

The subtotal net financial asset, which is found when the total liabilities and the total assets are subtracted from each other, is a positive $2.1million. Last year was a slight financial debt situation, which according to Adamson was the first in a few years. This year that number has improved.  

The non-financial assets total $173.6 million, which is largely due to the tangible capital assets, which are the buildings and the roads. The total accumulated surplus is $175,772,000, which is up a little over $6.5 million from last year. This year the revenues from operating activities came in at about $22.4 million up from last years just over $20 million. 

“So we’re about just under $3.5 million over budget on total revenues. The main reason for that is the gain on disposal of the water reservoir. The total proceeds were about $3 million,” said Adamson.

“The costs were about $500,000 so there was a gain on the disposal of the reservoir of about $2.5 million. So of the $3.5 million overage in revenue $2.5 million is from the sale of the reservoir. The other  $980,000 or so is largely from user fees and sales of goods and from investment incomes.”

Expenses come in at about $20.6 million in total compared to last year’s $20.5 million. The budget was $20.8 million so the town was under budget by about $220,000. 

“There were quite a few areas where there was a bit of an overage or a bit of an underage compared to budget but when I looked down it was remarkably close to budget for most of the items,” said Adamson.

Excess of revenue over expenses before other surplus of about $1.8 million and the budget was for a deficit of about $1.8 million, came in about $3.7 million better than budget. Capital revenues totaled $4.8 million between the government grants and contributed assets from developers. There is a $6.6 million surplus and $4.8 million from capital and $1.8 million from operations. 

“All in all a good year from a financial perspective, a $1.8 million surplus from operations,” said Adamson. 

Council approved the audited financial statements, and the summarized financial statements are included on page 4 of the Strathmore Times for further reference.