Trail in good financial shape: audit

A memorandum of Trail's financial audit revealed a surplus of cash and a hefty savings account.

The City of Trail has been saving for a rainy day, and this year it’s time to spend some of the nest egg.

A memorandum of the city’s 2012 financial audit was reviewed at Monday night council, and the report revealed a surplus of cash and a hefty savings account.

“We have been building up our capital over the years,”  said Mayor Dieter Bogs.

“Now we are in a good financial place to be able to start investing in some major improvements, especially in the downtown.”

Most notable is the $1.2 million earmarked for the Victoria Street Corridor gateway project, set to begin this summer.

“The city is in a healthy position,” said Craig Teindl, City of Trail  auditor from L. Soligo & Associates Ltd.

“This refers to the fact that as of Dec. 31, 2012, the city had enough cash and investments to pay off all the debt and still have some cash left over.”

The annual audit gives an overall picture of how the city is running, looking at it’s consolidated revenue by taking into account its general operations, such as water and sewer operations, and staff and capital funds.

The financial report memorandum, which is available for public viewing at trail.ca, notes a 2012 surplus of almost $2 million.

“The city had consolidated revenue in excess of expenses of $1.89 million for the year,” said David Perehudoff, chief administrative officer.

“Equating this to the private sector, this would effectively be the equivalent to net profit for the year.”

The main influx of cash is collected during property tax collection time.

Teindl said that in 2012, the total revenue of the city was almost $20 million, and of that total almost $12.5 million, or 62 per cent came from property taxes.

Another eye-catching figure noted in the report is the city’s $10 million in cash and short term investments.

“Cash and short-term investments are liquid assets of the city that may be used to fund operations or capital,” explained Perehudoff.“Strong cash balances allow the city to operate without having to borrow short-term during certain times of the year when cash is not coming in.”

More good news noted in the city’s financial statement is its growing accumulated surplus of $85 milllion.

“Accumulated surplus is basically the net value of the city that has been built up over time,” explained Perehudoff.

He said it is not specific to one year, but accumulated since the city has been in operation, and in relation to the private sector, equivalent to retained earnings.

In 2011, the city was sitting pretty with a $1.5 million surplus, with consolidated revenues of just over $19 million, and tangible capital assets of $82.5 million.

The Community Charter requires that before June 30 each year, council must prepare an annual report and make it available for public inspection.