BONNYVILLE – The 2021 financials for the MD of Bonnyville have been reviewed by a third-party accounting firm and reflect a $10.86 million annual surplus for the municipality.
The MD’s 2021 auditors report was completed by Metrix Group LLP and was presented by Jeff Alliston during the April 13 regular council meeting.
Alliston told council that a snapshot of the MD’s financial assets saw an increase of about $4.8 million compared to the previous fiscal year, which includes cash and temporary investments.
The MD finished 2021 with $68.5 million worth of financial assets.
“The MD had generated positive cash through its operating activities of $25 million,” explained Alliston. “You then spent $800,000 on debt repayments, another $18 million on tangible capital asset purchases, and moved about $1.5 million net into your investments.”
During the 2021 fiscal year, the MD saw an increase in taxes and grants in place of taxes.
In relation to some of the increased trends to property values, taxes received by the MD saw an increase of about $713,000 compared to 2020.
The MD received just over $2.8 million in municipal taxes in 2021, which makes up roughly 87 per cent of the municipality’s operating budget, according to information provided by Metrix group.
Another substantial increase in funding received by the MD was from other governments, which saw the addition of $7 million for capital projects.
This included about $6.1 million for the Municipal Sustainability Initiative (MSI) received from the Government of Alberta and roughly $863,000 from the Canada Infrastructure Program, among other government receivables, Alliston outlined. “With $8.8 million receivables to be collected subsequent to the (municipality’s) year end.”
After factoring in the MD’s investments, the municipality’s total financial asset position is $124 million, up from $111 million in 2020 – a $13 million increase in financial assets.
This growth is in relation to additional grants that are owed to the MD, as well as an overall increase in cash balance.
Municipal liabilities
The municipality finished 2021 with $34 million in liabilities, which is an increase of $3.7 million from the previous year.
These liabilities include deferred revenue and grants related to various capital projects not yet complete, $1.4 million left owing to the Village of Glendon in relation to an Inter-municipal Cooperation Program (IMCP), and $1.7 million worth of assets not yet turned over in relation to ID 349 agreements.
“Once you take your cash to pay off your liabilities you are left with $89.8 million net financial assets, plus the municipality’s gravel inventory, prepaid expenses and then long-term debt associated with the MD’s equity,” stated Alliston.
The MD’s net financial assets reflected an increase of $9.2 million compared to the 2020 fiscal year.
“This is where you get an indication of the financial health of the MD. So, what this is telling you is that you do have sufficient financial assets in order to offset your current liabilities and be left with $90 million of excess cash for your net financial asset position.”
When it comes to the MD’s non-financial assets, which are made up of the municipality's roads, water and sewer lines to provide services to residents, $20.5 million worth of additional assets were acquired in 2021.
“The various additions and the construction in-progress (included) the regional water line for $1.2 million, Township Road 630 with $3 million spent on that, the Cold Lake Campground expansion, about $2.6 million spent on that, Kinosoo Adventure Park and chairlifts about $2.2 million and then various bridge replacements,” elaborated Alliston.
“Those are some of the larger capital purchases in the year. Also under machinery equipment, you purchased a new sweeper as well as two new excavators. And then, included in buildings are the Ardmore and Fort Kent Fire Halls.”
The municipality wrapped up 2021 with a total of $319 million worth of non-financial assets. The combined financial and non-financial assets resulted in an accumulated surplus of $409 million for the MD.
Operating Revenue
By the end of 2021, the MD received more than $26 million in operating revenues compared to what they had budgeted for.
The municipality’s 2021 operating revenue came in at $94.9 million.
Alliston says this jump is directly related to a 35 per cent increase in the assessed value of ID 349 properties in the year.
“Net municipal property taxes make up 87 per cent of (the municipality’s) total operating revenue. User fees make up five per cent versus six per cent in the prior year. And then government transfers for operating (make up) three per cent,” said Alliston, breaking down the where the MD’s revenue is derived from.
The municipality also generates some income from investments and sales to other governments, however, these income sources account for less than one percent of MD’s total operating revenue.
However, this operating revenue was offset by $87.2 million in operating expenses for the municipality, which was $22 million higher than what had been budgeted for.
Alliston told council that while most expenses did come close to budget, items related to ID 349 transfers to local governments and amortization expenses for items such as roads and lights caused certain budget expenses to be skewed – coming in substantially higher than budgeted.
“After looking at revenue and expenses, the MD ended up with an operating surplus of $7.6 million. You then incur other income or transfers from government for capital purchases of $2.6 million,” summarized Alliston.
This left the MD with an annual surplus of $10.8 million.
Concluding his auditor's report, Alliston stated there were no significant control deficiencies, unusual accounting policies or estimates discovered.
Although, a couple of unrecorded misstatements were noted by the report. Overall, the accounting firm did not encounter any significant difficulties while performing their audit.
