City of Edmonton projects $68M operating budget surplus by end of 2022
The City of Edmonton is reporting a boon in its operating finances this year — a $45.3-million surplus as of Sept. 30, that's expected to grow to $67.8 million by the end of the year.
The city released the operating financial update report Thursday.
Some of the surplus comes from money not spent — about $20.5 million is from not filling vacant positions across all city departments, the report says.
"The surplus is partly attributable to savings in personnel costs," said Stacey Padbury, deputy city manager of financial and corporate services and chief financial officer.
"The delayed opening of the Windermere Fire Station meant that firefighters started work later in the year, a wet spring meant delays in the start of some construction work, and some positions were temporarily vacant while recruitments were done.
"Because salaries represent about half of the city's operating costs, the $20 million surplus represents about 1.3 per cent of the salary budget."
By the end of the year, the city projects it can save $41 million in financial strategies — a kind of savings account set aside to manage fluctuations in things like fuel and utility costs and for unforeseen costs over the four-year budget cycle.
Administration determined it won't need that money for the remainder of this budget cycle.
Ward pihêsiwin Coun. Tim Cartmell said the city can make money with the higher interest rates on that fund.
He said it's good news, to a degree.
"You've got to be cautious to think that this is some sort of a bonanza of dollars that's going to save us, it's not," Cartmell said in an interview with CBC News Thursday.
Cartmell said the city was careful in the last couple of years with COVID pressures and the situation ended up being better than anticipated.
"This is where we benefit on the inflation side of the equation. We will pay on the debt side and on the increased cost side of the equation as we look forward."
The city released the 2022 financial update just as council gets ready to debate the 2023-26 operating and capital budgets in December.
Transit recovery
The city is taking in more revenue than it projected in transit fares — $2.4 million by September and $4.6 million by end of the year, compared to its assumptions on ongoing lower ridership due to the COVID-19 pandemic.
Andre Corbould, the city manager, said the city continued to focus on safety on and around transit stations, and that's made a difference in restoring people's confidence when taking the bus or LRT.
"That has been successful from a transit safety plan," Corbould told city council's executive committee on Wednesday.
"We're seeing an increased ridership that is one of the highest levels in the country, post-COVID," Corbould said.
Steve Bradshaw, president of the transit union in Edmonton, said Corbould is correct, that ridership in Edmonton is up to 84 per cent from pre-pandemic levels.
At the beginning of the COVID-19 pandemic, when many people were working from home, ridership was down below 50 per cent, the city reported several times in 2020 and 2021.
Bradshaw, in an interview with CBC News Thursday, praised city council for deciding to put buses and LRT back up to normal schedule in the fall of 2020.
"City council, in its wisdom, put that service right back," Bradshaw said. "Once the service is there, people will start getting back on the bus. And they have. Our ridership is right up there leading the country."
Bradshaw was speaking anecdotally and from conversations with counterparts in other parts of the country.
The surplus goes into the financial stabilization reserve, which city council can draw on to pay for unexpected or unbudgeted costs.
The city can use it to pay for the proposed $7.5-million Jasper Place Wellness Centre shelter spaces, which city council will be asked to approve at a meeting Dec. 5.
