Charlottetown delivers $9M surplus

The City of Charlottetown released details of its audited financial statements for the 2018-19 fiscal year, revealing the city ran an operating surplus of $9 million on $87.5 million revenue.

The city presented its financial statements to the finance, auditand tendering committee at a special council meetingFriday.

City officials say this is the largest surplus in Charlottetown's history.

While the financial statements didn't provide complete details as to exactly why the city found itself with such a large surplus, some of the contributing factors were:

• Spending on police and protective services came in $2.3 million under budget.
• A contingency fund of $3.5 million in the budget was unused.
• Miscellaneous revenues, budgeted at $43,000, came in at $2.5 million, including $1.1 million in the form of a donation from Canadian Tire to pay for playground equipment.

Finance chair Terry Bernard said the city also benefited from increases in municipal funding from the province, along with "a lot of work done within departments to reduce their costs.So overall we're pleased to announce the surplus that we have."

The city had been projectinga $1.5 million deficit. Because of changes in the Municipal Government Act, the 2018-19 budget period for Charlottetown covered 15 months.

How can you accept things if you don't get to look at them and see what's going on here? Coun. Bob Doiron

Even with the $9 million surplus, the city only ended up reducing its debt by $1.2 million after accounting for capital expenses, leaving the city with a net debt of $97 million.

When asked if residents might expect a future decrease in their taxes, Bernard said the city would more likely look to develop.Bernard said "right now the city's on good financial footing and we'd like to make sure it stays that way."

Referring to a $3.5 million deficit in 2015 when the city was hit with "snowmaggedon," Bernard said the city would now consider setting up a reserve account to deal withsuch contingencies.

Qualified audit opinion

For the second year in a row,accountants for the cityprovided a qualified opinionon the financial documents, essentially placing caveats on their endorsement that those documents provide a fair representation of the city's financial position.

Auditors with MRSB said because no physical inventory count was observed for the fiscal year ended Dec. 31, 2017, they were unable to determine the change in inventory value as of March31, 2019, the end of the last fiscal year.

Therefore, they said they were "unable to determine whether adjustments might have been necessary in respect of the net surplus" and net cash flows reported in the financial statements.

A similar qualification was placed by the same auditors on the city's previous set of financial statements.

Statements released late (again)

Also for the second straight year, the city's audited financial statements were produced months behind schedule.

According to the Municipal Government Act, the statements have to be provided to council members by July 15 and made available to the public by July 31.

Instead, Charlottetown councillors were only shown the statements Friday, less than an hour before they were asked to vote on them. The province had given Charlottetown until Monday to deliver the statements to the minister of communities.

Coun.Bob Doironsaid councillors should have been given more time to go over the figures, but instead faced pressure to vote on them right away.

"They were just completed today and then the council has to accept them and send them on to the province," he said. "But how can you accept things if you don't get to look at them and see what's going on here?.Give us some time, let us look at them, let us do the numbers, you know, do our due diligence and then vote on it."

Will ratepayers be confused?

Doiron worried city ratepayers would be confused to hear the city is flush with cash, considering big increases in water and sewer rates that came into effect back in April.

"There's a lot of people upset with the increase and we're trying to do our best, but if we go by these statements that we do have lots of surplus, then we should be able to do something about that."

A year ago the city reported an $11.2 million surplus for the 2017 fiscal year. But that value included capital transfers from other levels of government. The actual operating surplus for 2017 was $25,452.

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