By Cole Parkinson
As 2018 continues to roll on, the Municipal District of Taber got a chance to look back at some of their 2017 financials in the way of an audit.
KPMG provided the audit for the year ending on December 31, 2017 and they had a delegation present in M.D. council chambers during their regular meeting on March 27.
One of the financial statements highlighted was the drop off in cash for the M.D. of Taber.
While there was a slight dip in that area, there was a reasonable explanation for why.
“We’ll notice our cash is down a little bit from prior year. Even though when we get to our statement of operations, we see that from a financial statement perspective we had a very strong year, a lot of that had to do with capital funding, capital acquisitions of land and those type of things. When we look at our cash, we’re very consistent and close to breaking even from where we were prior year,” said Derek Taylor, auditor for KPMG.
Cash at the beginning of the year was slated at $21,258,627 and decreased to $20,947,069 over the year compared to $22,516,207 at the beginning of 2016 and $21,258,627 at the end.
Other financial assets also saw slight dips in revenue, including land for resale inventory.
Over 2017 it was at $1,277,197, down from $1,748,198 in 2016.
“Our land for resale inventory is down a little bit. Looking at the rest of our financial assets, it’s very consistent to our prior year, a little bit of fluctuation there when we compare to financial position of the M.D. overall,” said Taylor.
Land for resale was down to $37,299 compared to $43,723 in 2016 and other financial assets saw minor setbacks as well.
The biggest highlight with liabilities in 2017, according to Taylor, was the deferred revenues which saw a massive increase to $2,428,443 with 2016 being set at $18,544.
The funding increase was received from senior levels of government and the use of the money is restricted to eligible capital projects scheduled for completion in 2018.
“The M.D. does have sufficient financial assets to offset all of its liabilities and not every municipality in Alberta is in that position. Municipalities have had to go out and borrow money to fund capital infrastructure and those types of things,” added Taylor.
With the audited numbers coming in after M.D. tax season, council was cautiously optimistic about the numbers in front of them.
“The reality is we have 10 more months for the municipality to run on that amount, so the December probably isn’t the best, November would probably be the best for where our true numbers are at,” said Reeve Brian Brewin. “Taxes are due in November, so this is probably the best-case scenario.”
M.D. staff also agreed that the numbers coming from December would be higher due to the money coming in from taxes.
“The net financial asset number, and you can see in 2016, $20 million and in 2017, it’s about $16,700,000. That’s more of a true reflection after we pay all of our liabilities, the remainder of our cash would be something that would be available. We use that cash to operate right until November 15 of the following each year in order to meet our obligations for the next year until when taxes are collected,” said Bryan Badura, director of corporate services.
The M.D.’s net surplus rings in at $150,163,014 with $9,326,284 coming from unrestricted surplus, $6,160,112 from operating reserve, $9,862,124 from capital reserve and $124,814,494 from equity in tangible capital assets.
On the operation side for the M.D., numbers look fairly similar from the prior year.
Minor changes for line items highlighted were in respect to net municipal property taxes and rental fees.
Net municipal property taxes were at $15,257,569 in 2016, but they decreased slightly in 2017 to $14,565,333.
Rent on the other hand saw a slight bump up to $2,043,559.
“If we look at our net municipal taxes, they are actually down a little bit from prior year. We can see a slight increase in our rent and a large gain on disposal of capital assets this year. When we get to your bottom line and we look at the $12 million, excessive revenue is over expenditures. You have a large one-time gain of $1.5 million that results from disposition of certain assets,” said Taylor. “When you’re looking at ongoing operations, it’s very important to take that into account.”
The bottom line for revenues saw a slight jump up to $21,986,684 in 2017 compared to 2016’s $21,257,306.
While their revenues saw a few little changes throughout, their expense remained largely in tact from the previous year.
“It’s very consistent from prior year. You do see some slight in-fluctuation over various line items, but it’s very, very consistent. When you compare budgets, it’s very close as well,” added Taylor.
Total expenses clocked in at $21,013,727 for a decrease of $119,875.
One of the bigger jumps councillors got a look at involved excess of revenue over expenses.
Totals for 2017 were set at $12,008,908 which is a big decrease from $18,167,532 in 2016.
“When people see that they think that’s an awfully large number, and it is, but again, once we start backing out things such as those contributive land transfers of just about $8.5 million, the gain on disposal of assets of $1.5 million and the transfers you’ve received for capital. That $12 million comes down to a much more manageable balanced number,” continued Taylor.
Another big thing Taylor wanted to show was how much money was being reinvested back into the M.D.
“While yes there was that positive cash flow, you’re investing in infrastructure for the M.D, there’s a lot of reinvestment into the M.D,” said Taylor. “You’re not building a kingdom out of cash, you’re using it and investing it in infrastructure that you need to provide service moving forward and that’s probably where you want to be for your rate payers.”