City’s Audited Financial Statements Show Surplus

City’s Audited Financial Statements Show $9 Million Operating Surplus
Posted on 10/25/2019
The City of Charlottetown released the results of its 2018-19 audited financial statements, capping off the fiscal year (January 1, 2018 – March 31, 2019) with an overall surplus of $16 million. When adjusted to remove intergovernmental transfers and pension obligations, the City’s net operating surplus is $9 million. The financial statements were presented to the Finance, Audit and Tendering committee and Council at a special meeting today (Friday, October 25).

“This is the largest surplus in the Capital City’s financial history. It’s great news for the City corporation and the citizens of Charlottetown,” said Councillor Terry Bernard, Chair of the City’s Finance, Audit and Tendering committee. “There are four key factors that contributed to the City having this surplus: good managerial oversight, increased revenues, strategic spending, and better alignment with accounting standards.”

The City received $900,000 in government rebates (Workers Compensation Board surplus distribution and HST rebate). It also received an increase in the municipal capital expenditure grant of $900,000, and $1.3 million more in intergovernmental transfers in the form of the municipal support grant. The City had also budgeted $3.5 million in an unspent operating contingency in the 2018-19 fiscal period. Some of the other increases in revenue for the 2018-19 fiscal year is attributed to more construction. In 2018, the Planning and Heritage Department issued 414 building permits at a value of $105 million, an increase of $14.7 million over 2017. Parks and Recreation also saw increased revenues through higher participation in programs, along with a $1 million donation from Canadian Tire Jumpstart Charities for an inclusive playground at Victoria Park.

“With this surplus, the Finance committee would like to make sure the City remains on a solid financial foundation by recommending to Council that we establish a contingency for strategic investments and unforeseen events,” Councillor Bernard said. “We commend our CAO and senior management for their continued budget oversight and we thank MRSB – our auditors – for their work on these financial pieces that allow us to provide a clear financial picture to the public. We also want to thank the other levels of government for their continued support of the municipality.”

As required by the Public Sector Accounting Board and the City’s tangible capital asset policy, expenditures that were traditionally expensed in the same year incurred, will now be expensed over the life of the asset.

The audited financial statements of the Water and Sewer Utility, which is a separate entity from the City corporation, ended the fiscal period with a $1.15 million operating deficit. The deficit, which was reported during the City’s budget announcement in April, will be offset by the rate increase in the 2019-2020 budget, which was also part of the April announcement.

The City corporation and Water and Sewer Utility operated on a one-time 15-month budget during the last fiscal. The 2019-2020 budget returns to the standard 12-month budget, with the new fiscal period of April 1 – March 31 annually.

The City’s audited financial statements for the City of Charlottetown are available under the Mayor and Council tab, under Finance.