City of Prince Albert says it has found a budget deficit of $3.4 million for last year. (Susan McNeil/paNOW)

By paNOW Staff

City Hall

City announces $3.4 million deficit for 2022

Aug 10, 2023 | 5:07 PM

In its financial report for 2022, the City of Prince Albert has revealed a shortfall of $3.4 million, a situation brought on by overestimating revenue, underestimating expenses and ‘lean budgeting’.

The city said it has not completely recovered from COVID-19 and inflation has also played a role.

“Revenues had not quite recovered to pre-COVID years and so we did not hit budgeted projections in areas like recreation and transit,” said Briane Vance, Senior Accounting Manager for the City of Prince Albert. “We also experienced situations that called for emergency repairs in addition to considerable inflationary pressures that drove up costs on things like asphalt prices, power, electricity and insurance.”

Despite the shortfall, finances are not unhealthy and the city has enough money in its fiscal stabilization fund to cover the amount.

Vance also said that fluctuations happen and things like emergency situations can lead to unplanned costs.

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The City’s auditors have completed the 2022 audit and continue to issue a clean audit opinion regarding the City’s reporting and financial health.

“Our ability to pay expenses and debts as they come due remains sound,” said Vance. “Based on the 2022 Financial Statements, the City’s current ratio is approximately 2:1, which means our current assets are able to satisfy our current obligations two times over as they come due. “

Lean budgeting, the term used for how the 2022 expenses and revenues were calculated, helped keep the mill rate low for the year.

Another factor, according to a report that will be part of council’s Monday agenda, is that council didn’t get timely reporting in order to make different decisions on spending.

Administration said they’ve already made some changes to the 2023 budget, adjusting items that were too low and trimming revenue targets.

The first quarterly report of the year shows a surplus but staff urge caution as there are still nine months left to report.

The report shows a large deficit of over $5 million in the general fund but those are balanced by surpluses in sanitation and the water & sewer utility.

Added to somewhat smaller deficits and the land fund and airport fund leads to a deficit of $3.4 million.

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panews@pattisonmedia.com

Twitter: @princealbertnow