The 2010 year end financials for the City of Yorkton were presented at the regular meeting of Yorkton Council Monday.
The operations of the City actually saw a surplus position before factoring in the costs associated with dealing with the flood of July 1, 2010, explained Lonnie Kaal, Director of Finance with the City.
"Revenues were $355,439 more than budgeted. Collectively departmental operations added $72,363 to the surplus. But when including the flood costs of $531,000 and the recommended transfer to reserves, the net deficit for 2010 is ($197,325)," added Kaal's report.
"The extra-ordinary costs of the flood of $531,000 have been absorbed by surplus with the exception of some $200,000," said Kaal.
To cover the costs, Kaal made two recommendations.
In 2008 funds were placed in an unspecified operating surplus reserve and $75,000 remains in this account. Funds can be withdrawn from this account to offset the 2010 deficit.
And, in 2009 $1,135,000 was placed in an operating annexation reserve account, from which it was recommended $125,000 be drawn.
Council would accept the recommendations unanimously, along with the entire report.
The good news of the report was on the revenue side where Kaal said there were $355,000 more than budgeted.
The increased revenue included;
*tax revenues adding $271,000 more than budgeted
*Crown surcharge revenue for municipal rights-of-way added $97,000 to the surplus (net of incentives like the Heavy Industry Power Surcharge Rebates Policy). Our target/budget revenue amounts are set at conservative values to ensure there is not a shortfall of earnings in this area.
*Normally land sales belong to the land fund and do not generate income in general operations. But in 2010 a parcel was sold that belonged to the general fund. This land was on the books for many years with a low book value which resulted in $186,000, less $100,000 for other land allowances = $86,000 profit.
However expenditures were heavily impacted by the flood.
"Residents submitted 1,165 claims totalling $4.1 million to the Provincial Disaster Assistance Program as a result of the 2010 Canada Day Flood. The City's costs of clean-up are not covered by the program as the deductible for Yorkton was $720,455. Direct costs of $531,000 were incurred and these costs do not include normal salaries where many staff were deployed in flood related activities instead of their normal jobs," detailed Kaal's report.
In terms of departmental budgets Kaal said most came in close to budget.
One that missed was the Gallagher Centre which "did not achieve the revenue targets and incurred a shortfall of ($159,630) after using the reserve allocation savings of $44,540. Excluding the extra expenditures that were approved after budget (convention equipment $32,000 and fixing grandstand $29,000), the deficit is $98,000. Lower ice rentals, $40,000 and higher arena costs account for the majority of the shortfall."
Another shortfall was "Community Development - Parks and Recreation department experienced various differences with Deer Park Revenues being $36,000 less than anticipated and some costs being higher for a net shortfall of ($55,230). The Library shortfall of ($23,190) was incurred excluding any flood related costs (as these were charged to a different section in the budget). The majority of this shortfall was incurred in building contracted services including air quality expenses."
However there were also positives in the department.
"On the positive side, savings were generated in recreation facilities ($26,579) with expenditures being less than budgeted. Outdoor parks saved an additional $19,896 with less maintenance costs and general program and admin savings of $21,833 provided a combined $68,308 surplus."
Also on the positive side was "Environmental Services landfill revenues were more than anticipated and contributed $150,460 to the surplus. This was primarily because of demolition and contaminated soil moisture and is not expected to happen on an ongoing basis."
"In prior years, the City has transferred half of any department's savings into a reserve for future capital expenditures. This practice has resulted in increased savings as managers are encouraged to save operating dollars on the assurance that some of the savings stay within their own department. Reserves increase the likelihood of proceeding ahead with needed capital projects.
Without this incentive, it is easy to fall into the typical government spending at year end where a "use it or lose it" mentality takes place," stated Kaal's report. "Administratively, we continue to recommend this practice of rewarding surplus by department. For those departments recording deficits, these are tracked and recorded such that future surplus transfers are not recommended until previous deficits have been covered."
With that in mind transfers were made to two departments $25,000 to Godfrey Dean reserve in Community Development - Parks & Recreation, and $75,000 to Landfill Reserve.
