Pincher Creek council holds special meeting for 2020 finances

·5 min read

Oftentimes people keep quiet and don’t ask questions when facing unfamiliar information for fear of appearing ignorant or foolish. However, as the old proverb goes, “He who asks is a fool for five minutes; he who does not ask remains a fool forever.”

After questions were raised by council members during the March 8 regular meeting about the town’s 2020 financial statement, a special meeting was held March 17 to allow director of finance Wendy Catonio to explain how last year’s figures were reached.

Initial questions centred on the town’s expenditures appearing to outpace its annual revenue, yet the resulting deficit did not appear in the financial statements.

According to provincial legislation, municipalities are not allowed to run a deficit in their budgets. Instead, additional expenses not accounted for as revenue in the annual budget are covered by municipal reserves. Reserves basically act as savings accounts for municipalities. Currently, the town has $9,583,224.49 saved.

Reserves allow the town to save up for big future expenses or projects. A new hockey arena, for example, accounts for $2.6 million of municipal reserves. Having money set aside also allows the town to apply for grants that require matching funds.

Since receiving grant money is never guaranteed, funding from higher levels of government is not budgeted as revenue in the yearly budget. The town’s reported revenue accounts only for predictable income, like property taxes and utility fees. Money received through things like grants, selling municipal land, or financial transfers from the MD is counted as accumulated surplus that is placed in reserves.

The town’s 2020 financial statement lists its revenue as $8,936,376. Unexpected income through the sale of two lots ($137,700), a contribution from the MD toward construction of the early-learning centres ($500,000), investment income ($299,158) and a Community Facility Enhancement Program grant for the Lebel Mansion elevator ($42,503) accounts for $979,361 of accumulated surplus.

The actual revenue collected by the town last year available for use, then, was $9,915,737.

The town also experienced decreased expenses as a result of the Covid-19 pandemic closing facilities and forcing municipal training to transition online, cutting down travel costs.

The surplus helped cover deficit spending that had originally required transfers from reserves. The 2020 budget anticipated a $919,437 withdrawal from the town’s savings for operating expenses, but only $297,122 was actually needed.

Keeping track of just how much money the town was receiving and spending in this scenario, said Ms. Catonio, was a little tricky because the pandemic created a new source of unexpected surplus.

“I can understand where people were confused,” she said, “because when you look at the statement of operations it looks like we’re saving all this money in unspent expenses, such as salaries or goods and services, so where is that money? It was used to fund the expenses that we were going to use the reserves [for].”

Laying out the information to see where exactly the money is going, said Coun. Brian McGillivray, was a useful exercise that would be beneficial for members of council and the general public, especially during the times of the year when the budget is created.

“I took the financial course through the AUMA during the first convention that we went to 3½ years ago — things have changed since that date,” Coun. McGillivray said. “That’s why I think by doing this in conjunction with our budget process every year, anything that does change we pick up and make it easier for everybody to understand.”

Part of the confusion, added Mayor Don Anderberg, results from the town needing to meet the expectations of higher levels of government.

“A lot of this is driven by new rules, and I believe a lot of it is driven by the federal government wanting specific types of information broken out,” the mayor said. “To get the information that they want, there’s been significant changes to how we report.”

Council also took the opportunity provided by the special meeting to make a few adjustments to the 2021 budget.

A major item is paying for the twinning of the sanitary force main, which was discussed in closed session after council had a chance to discuss finance options for the early-learning centres.

Two other adjustments were made in regard to the water treatment plant and golf course.

Upgrading water valves at the treatment plant will be paid for through reserves. The valves’ price tag was initially set at $100,000, but options being explored by public works aim to decrease that amount by half.

A reserve fund was also created specifically for replacing the irrigation system at the Pincher Creek golf course. Council had approved setting aside $150,000 per year for five years as part of the original 2021 budget, but the manner of funding was undecided until the special meeting.

The town intends to apply for a cost-matching grant to help offset some of the cost. No money will be spent until specific plans on the irrigation replacement are finalized.

The 2020 financial statement analysis presented at the special meeting can be viewed online at The 2021 capital and operating budget is available at

Sean Oliver, Local Journalism Initiative Reporter, Shootin' the Breeze