Fine fiscal management is running rampant in the Beaver Valley as its two villages posted surpluses in 2011, according to their recent annual reports.
Both of the corporations known as Montrose and Fruitvale are in the black for the 2011 budget year, and most of the reason for that has been good fiscal management.
According to their annual reports, Fruitvale posted a $759,930 annual surplus, while Montrose put up a respectable $183,061 surplus.
Although Fruitvale was the benefactor of an unbudgeted $400,000 grant from the federal government, grants were a focus of the village in 2011 and part of the reason for their surplus.
In the annual report, village chief administrative officer Lila Cresswell said the main financial focus for the year was fund sourcing, with “significant” resources allocated for grant applications.
It paid off. In total for 2011, more than one dozen grant applications were sent out, and approximately $1.1 million was earned by means of federal, provincial and corporate grants—that will be used on various projects now and in the coming years.
In Montrose, when a water main broke in spring major costs to taxpayers were averted when the village was able to draw down on reserves it had shrewdly accumulated since 2008.
“Anything that was extra we used on that water break, and then we went into the reserves,” said Montrose Mayor Joe Danchuk. “So there will be no money going into reserves this year.”
With federal government Small Community grants accumulating in village coffers since 2008, there were nearly enough funds in reserve to cover the $290,000 cost of the repair, the annual report showed.
A municipality’s annual report is a requirement under the Community Charter Act to provide a report available to the public as an subjective overview of the prior year’s operations, including the financial statements presented to village council in May.
The financial bliss has extended throughout the Greater Trail region to the Silver City itself, with an independent audit of city finances released in July showing the City of Trail sitting pretty with a $1.5 million surplus, according to 2011 audited financial statements done by L. Soligo and Associates.
In both village cases, auditor Don Catalano of L. Soligo said village financial statements “present fairly … the financial position of the municipality as at Dec. 31, 2011, and the results of its financial activities, net financial assets and cash flows for the year then ended in accordance with Canadian public sector accounting standards.”
Montrose by the numbers
In 2011 the Village of Montrose collected a total of $1,426,623 in revenue, with 27.8 per cent of it coming from taxes collected from the village ($396,255). Water and sewer user fees added a further 16.6 per cent to the pot with $236,974.
Transfers from other governments made up the largest portion of the revenue the village pulled in at $678,573, nearly 48 per cent of the total revenue.
And the village was miserly with its spending, doling out only $1,243,562 of that revenue to run the business of local government, around 87 per cent of the total revenue.
Of those expenditures, general government consumed the most at 32.5 per cent ($404,354), paying for the cost of administration, council operations, the office, legal and auditing services and liability insurance.
Water and sewer operations were close at 28 per cent of the expenditure total, with $348,956 spent on the supply and distribution of water, and the collection and treatment of sewerage.
Amortization—the process of decreasing, or accounting for, an amount over a period—costs of existing village tangible capital assets were the only other large item of note with $222,535 spent (17.9 per cent).
Although the village showed an accumulated surplus at the end of the year at $7,809,498, the real annual surplus of the village was $183,061, a marked improvement over the loss of $56,458 in 2010.
The accumulated surplus is money that is already spent, split between fixed assets, operating surpluses, and reserve funds as well.
Fiscal fruits of Fruitvale
Fruitvale now finds itself in the enviable position of 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 Cresswell, with a large amount of work accomplished and no borrowing incurred.
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.
“They received one relatively large provincial grant for $400,000 that wasn’t budgeted for, accounting for a majority of the surplus for the year,” said Catalano.
The village also made capital improvements of $1.2 million, took on $422,000 of amortization, and paid off more of their debenture debt ($30,000), but ended the year going $560,000 into their line of credit.
“There was nothing earth shattering that precluded us from completing our audit, or anything that making the statements false or misleading that we could find,” he said. “Cash went up in 2011, so did reserves (by $140,000), and they had a surplus for the year, all positive financial points.”
Water in the well
This year has been all about water as the Village of Montrose has struggled with a water main break, as well as drilling a new well and creating a chlorination facility to begin lifting the boil water advisory in the community.
Robbin’s Engineering has just finished drilling the new water well for the village, Mayor Joe Danchuk confirmed on Wednesday.
The village is a couple of weeks behind on the project, he said, but the tender for the construction of the pump house will be going out next week.
“That is progressing well and we’re hoping for around April for it to be completed,” he said. “They will be working through the winter.”
The footings for the chlorination facility should be in by late fall and work is expected to continue through to spring.