Lacombe improves financial position according to 2018 audited financial statements

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The City of Lacombe improved its financial position in 2018, according to audited financial statements released earlier this week.

The statements showed the city had an operating surplus of about $318,000 in 2018, which came from a combination of increased interest revenue, lower than expected debt payments and minor variations in departments. As a result of improved financial position, extra cash was able to be invested into Guaranteed Investment Certificates (GICs).

“Council is pleased to have another clean audit showing that the City of Lacombe is operating in a fiscally responsible manner,” said Mayor Grant Creasey in a release. “We are pleased that an external organization has confirmed that our staff are doing great work in conscientiously managing public funds.”

The city had used about 41 per cent of its statutory limit debt capacity and 24 per cent of its debt-servicing capacity as of Dec. 31, 2018. The debt capacity, as set out by the Municipal Government Act (MGA), is 1.5 times the city’s revenue, meaning as revenues grew, the debt capacity increased by $1.8 million over 2017.

Capital revenues  for 2018, meanwhile, were under budget. This was as a result of delayed government transfers which are only received follow the completion of capital projects, such as the West Area Servicing Project that began in 2018 but will not be completed until 2019.

Net municipal taxes were within 0.4 per cent or $64,000 of what was expected, while debt and interest payments were under budget by $241,000 due to delayed borrowing for the West Area Servicing Project.

“The city’s 2018 operating expenses were largely in line with departmental budgeted amounts,” said Senior Manager of Financial Services Justin de Bresser. “We were slightly under budget due to lower than expected debt repayments and reduced utility costs.”

The audit of financial statements takes place yearly in order to ensure “transparency and sound financial management” according to Chief Administrative Officer Matthew Goudy, which he says citizens place a high value on.

The 2018 City of Lacombe Consolidated Financial Statements can be viewed online at www.lacombe.ca/home/showdocument?id=11964.

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