At first glance it appears the Village of Fruitvale is rolling in riches.
With an $8.71 million surplus sitting in the “vaults” — according to a recent audit on their 2011 operations — the village appears to have an enviable position that most major B.C. centres would love to have: loads of extra cash.
However, the million-dollar number is misleading since it takes into account the asset valuation of all of the village’s capital and infrastructure works, around $8.4 million in total, and does not represent cash in the bank.
On Monday night Fruitvale council heard the state of the union in 2011 from Don Catalano, a chartered accountant with Soligo and Associates, the man charged with auditing the village’s books.
And the union is doing fine, Catalano said, with the village in a good position, having no debenture debt at the local level — although there is debt for shared services through the regional district.
The village really only has less than $240,000 in surplus, including $72,438 in unappropriated surplus, and $159,462 in reserve funds.
But the real story for the year was capital infrastructure replacement, said Fruitvale chief administrative officer Lila Cresswell, with a large amount of work accomplished and no borrowing incurred.
“We were fortunate in being successful for two major grants, the $400,000 towards the Hillcrest project and $610,000 for a sewer treatment plant upgrade,” Cresswell said, which will be the major village project completed this year.
The village’s overall cash position has gone down about $641,000 from last year to $63,700, but it isn’t a concern, she added. The drop in cash position is due to the extensive capital works program in 2011 drawing down from reserves.
That works program for the village was significantly larger than in previous years and included the full reconstruction of sewer, drainage, sidewalks and road surface for Hillcrest Avenue.
“It isn’t a problem in that the province owes us $400,000 for the Towns for Tomorrow grant which was outstanding at year end,” Cresswell noted. “We will have temporary borrowing costs associated with the length of time that the grant has been outstanding, but it will be paid when the Treasury Board approval occurs and, of course, the province is good for it.”
The only area of concern was road work on Hillcrest turned out to be more than anticipated — going $70,000 over budget — due to the poor condition of the roadbed structure under the existing pavement.
“So that extra amount was transferred from the Federal Gas Tax Reserve we received for capital projects,” Cresswell explained.
Looking ahead, a concern for 2012 is the looming possibility of extra costs due to flood control on Beaver Creek in the village, with the freshet shaping up to be one of the highest in recent memory.
And the other concern is the sewer system.
“Although we do have the funds for the treatment plant upgrade, we also have to plan for the next phase which is the outfall and diffusion system as required by the Ministry of Environment,” Cresswell said. “And infrastructure renewal costs are also always a concern on the horizon because of the potential future costs of replacement.”