City’s books in great shape, according to audit comte. chair
By Collin Gallant on December 26, 2017.
Medicine Hat News The city’s books are in great shape, according to a commercial banker who was returned to council during this fall’s elections. Coun. Darren Hirsch chairs council’s audit committee and commented on the city’s most recent financial update, received by council at it’s late December meeting. “Having had time to digest the details, I’m very happy to say we’re in strong financial position,” said Hirsch. “Quite frankly, we run an operation that is the envy of all the other cities in the province of Alberta.” The report, covering the period up to Sept. 30, states that for the first time in several years the municipal services budget will post a small operational deficit by year end. That amount is projected to be $117,000, compared to a near $160 million operating budget. The deficit is due to stepped-up debt repayment, higher than projected costs to subsidize infrastructure for developers, and an operating deficit at the Canalta Centre. Those shortfalls offset higher revenue and lower costs in several city divisions. Costs in the public services and development and infrastructure (D&I) divisions are on track to be a combined $1.8 million less than projected. Revenue from the D&I functions could be $1.6 million higher than projected by year end. The land department is expected to produce a $1.8 million profit due to commercial land sales. Petroleum production could be $3.2 million in the black on paper by Dec. 31, thanks largely to lower expenses and the sale of a large block of low-return wells; and therefore reduced liability. Initially a $38 million loss was predicted for the division. At the nine-month point the city’s debt sat at $318 million, or about 52 per cent of the mandated debt ceiling of $612 million. Payment of principal amounts and interest will total $6.8 million for 2017. Total reserves totalled $476 million, including $78 million deposited with the province’s investment management corporation (AIMCo). That mostly is almost entirely related to well-abandonment reserves. This year the city moved its financial reporting dates to a three-times yearly schedule, comprising a mid-year update, the traditional third-quarter update to Sept. 30, and then a year-end statement, due in March of the following year. The recent report was also delayed by the Oct. 18 election period after the remade audit committee did not meet until Nov. 30. Next year, three financial reporting periods would end in April, August at at the financial year end of Dec. 31. 17-16
