Strathcona County boasts $16M surplus

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Upon the finalization of year-end statements, Strathcona County’s ledger was significantly in the black.

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During council meeting held in April, it was revealed that the municipality boasted a $16 million surplus from its 2023 budget. It marked one of the biggest surpluses for Strathcona County in recent years.

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But Mayor Rod Frank wasn’t deterred by the large sum, highlighting $16M represents 4.5 per cent of the overall budget.

“With an overall budget of $400 million, it’s hard to budget to zero. It would mean that you’d need a crystal ball on January 1st. You’ll never be able to get zero, zero, zero in consecutive years. I’m glad that we’re having a discussion about a surplus rather than a deficit,” Frank told The News. “When I put it in the overall context of $400 million, it’s acceptable. I get it, the public will ask why such a big number, but it’s within that range that I find acceptable around that five per cent mark, so I’m fine with it.”

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A number of factors contributed to the high surplus, including county staff not spending the full amounts for budgeted expenses, higher than expected revenues from local recreational facilities, higher revenue from speeding tickets, and higher than anticipated revenue from the county’s investment portfolios.

“We do budget conservatively in the sense that we don’t overestimate our revenues and we account for all of our costs. Going forward, we might not be as conservative with those numbers,” Frank said. “Again, if this was your own household, you’d be happier with this situation rather than being in a deficit.”

Unlike the federal and provincial governments, municipalities are not allowed to run deficits under legislation. The mayor noted surplus ranges between three to six per cent are considered best practice for municipalities.

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“I watch both sides of the ledger. Whenever we talk about a new capital spend or a new operational cost, I try to round of the conversation with how we’re going to pay for it,” he said.

Council quickly reallocated the surplus dollars in April, putting $10 million into road repairs and maintenance projects and $6 million into reserves.

“Council supported reinvesting $10 million into our road maintenance operations, as approximately $25 million was reduced as part of the capital road program over the next five years in a response to keep taxes lower,” the mayor explained. “Roads are the single largest asset in the county, as well as one that almost everyone uses every day.”

The health of local reserve funding has been a concern of the county’s Finance Department as they were tapped significantly during 2021 and 2022 in order to offer zero per cent tax rates while taxpayers were feeling the economic uncertainty of the COVID-19 pandemic.

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In response to possible concerns from taxpayers who think they’re being overtaxed, the mayor recalled how during his first term in office taxes were cut by 1.35 per cent for his first three years and during this current term, taxes increases have been below inflation.

On Tuesday, May 7, the tax rate for 2024 was set at 4.84 per cent.

“This year will be under five per cent and I’m pleased with that, but that might be slightly above inflation,” Frank said. “But if we’re talking about a six or seven year period where only one year is above inflation, and then you look at all of the capital builds that we’re doing, these don’t come without revenue requirements.”

In an aim to be more proactive ahead of the Budget 2025 debate this fall, throughout a joint motion of the mayor and Ward 4 Coun. Bill Tonita tabled at the beginning of this year, council tasked administration to cut the upcoming budget by five per cent or approximately $14 million. Those budget reduction discussions between council and administration are expected to start in June.

“We need to be responsible with any tax increase, so let’s take a look at our entire operations,” Frank said. “What I don’t want to happen is having us running around in November like chickens with our heads cut off, trying to figure out the budget, and that’s why we wanted to start discussions earlier in the year.”

lmorey@postmedia.com

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