Trail’s financial audit paints positive picture

An independent audit of city finances has shown the City of Trail sitting pretty with a $1.5 million surplus.

The city’s cash cup runneth over, but you won’t be receiving a cheque in the mail.

An independent audit of city finances has shown the City of Trail sitting pretty with a $1.5 million surplus, according to 2011 audited financial statements done by Craig Teindl of L. Soligos and Associates.

The city was able to bring in more and spend less in the last fiscal year, putting it in a spot where it now has some spare cash to kick around.

But it won’t be kicking the cash back to taxpayers, or handing out a tax cut, said councillor Kevin Jolly, the chair of the city’s general government and finance committee.

Instead, the city will be moving ahead with a few projects—including the Gateway phase of the Downtown Improvement Plan—and creating a rainy day fund.

The city does operate on a budget of conservatism and budgets for potential expenditures that could jeopardize the plan, but it often does not work out that way, he said.

“It’s not common, in my opinion, that you should have a significant surplus all of the time, but we have one this year,” he said. “(The money) will get re-invested in the city’s operations. The city is in a position now that we can afford to do more because we had a decent year last year.”

This isn’t the first time the city has come out on the plus side of the ledger. In fact, the City of Trail has been able to more than balance the books for several years now, said city chief administrative officer David Perehudoff, but this is the largest one in several years.

“We try to budget in such a way that we break even, but in this case we are better in a number of areas so we generated a larger surplus than typical,” he said.

Although the city budgets to break even, in this case the city did better in a number of areas—including acceleration of the Small Community Grants payments from the provincial government, meaning cash from previous years was deferred to 2011.

The glowing financial picture is even brighter if audit practices of three years ago were applied, leaving out depreciation and amortization of city assets. Three years ago the current $1.66 million increase in net financial assets would show the city with a total surplus of $2.7 million.

“What this means at the end of the day is the city is in a very, very healthy position,” said Teindl.

In the city’s current year they had total amortization of assets of $3.3 million.

The audit gives an overall picture of how the city is running, looking at the city’s consolidated revenue by taking into account general operations, water and sewer operations, staff and capital funds, marrying it all together into one statement.

The city had consolidated revenues of $19,128,549, around $1.8 million over budget for the year. On the other hand, consolidated expenditures were $17,606,440, approximately $3.21 million less than what the city had budgeted for.

Looking deeper, if the city took all of its net financial assets—including cash receivables—and turned them into cash and paid off all of its bills (including long-term debt) it would end up with $2.7 million left over.

The equation does not include tangible capital assets and non-financial assets, said Teindl.

“So this means is the city is in a real liquid financial situation and that’s very, very good,” he said.

The city’s tangible capital assets are at $82.5 million. These are the assets the city physically owns, not financed by debt or lease.

“Because of the age of some of its infrastructure, some of the assets are completely depreciated and others aren’t,” said Teindl.

The city’s audit of its financial statements—approved by council—will be posted to the financial section of its website once it has been passed through council in its annual report in August.