The City of Lacombe is expecting to see a budget surplus of around $500,000 by the end of 2020.
The surplus was outlined in the third quarter report presented at the last council meeting on Nov. 23. In the report it states several areas where the city was able to make cost saving decisions to contribute to the excess funds, such as the cancellation of BOLT services.
“Lacombe City Council is pleased to see the city is on solid financial footing heading into 2021,” said Deputy Mayor Thalia Hibbs.
“Through prudent measures, the city will be more able to weather any unpredicted future costs that may come with the ongoing pandemic.”
In addition to consciously made decisions, the pandemic also resulted in some unexpected savings such as operating costs for municipally owned buildings being lower and temporary city staff layoffs. This combined with city council directed savings allowed for a lower budget estimate in the first place.
“We were fairly conservative in our budgets going into 2020 for how much we would see returned,” said Matthew Goudy, Chief Administrative Officer for the city.
“We actually had greater savings than we originally thought.”
However, many costly infrastructure projects like the crack sealing of roads were put on hold due to the pandemic and contributed to the surplus. When operations return to normal it is expected these projects will be rescheduled and continue as planned.
“Most of these [projects] are reflected in that surplus and it is actually a matter of work that didn’t happen rather than true savings,” said Goudy.
The $400,000 to $600,000 estimated surplus also does not include a grant of $1.4 million from the Government of Alberta.
The Municipal Operating Support Transfer (MOST) grant was provided to municipalities to help alleviate COVID-19 related impacts. It will be used to offset revenue losses due to facility closures and other increased expenses as a result of the pandemic.
In addition to the third-quarter surplus, city revenues are under budget by approximately 1.1 per cent or $408,000. This is due to a combination of factors such as user fee reductions, tax and utility payment deferrals along with other utility-funded operations.
Revenues from tax-funded operations such as investments, however, are expected to be slightly above budget by the end of 2020.
The report also outlines how city expenses are trending under budget by $924,488 or 2.8 per cent. It is important to note that most expenditures are incurred in the third quarter of the year and so the exact amount won’t be known until the end of the year.