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RFD- 3754 Administrative Updates   Item #   8. b.    
Regular Council Meeting Agenda
Meeting Date: 11/12/2019  
Title:    2019 Third Quarter Financial Statements - Frostad
Department: Corporate Services  
Strategic Vision Element: This topic relates to all three of the City’s strategic vision elements contained in Council’s Strategic Plan Related Goal: n/a

Request for Decision Summary
To publish quarterly financial information to allow the routine monitoring of financial activities.

Proposed Motion
That the 2019 third quarter financial statements be received as information.

The financial statements have been prepared and presented by Administration, which is responsible for their accuracy, objectivity, and completeness.  

Interim financial statements are consistent with annual statements except that they are condensed, unconsolidated, and unaudited.
  • Condensed financial statements do not include the complete note disclosure, but refer readers to the annual financial statements.
  • Unconsolidated financial statements do not include the financial results of the TransAlta Tri Leisure Centre or the Library.
  • Interim financial statements are not normally audited.
The financial statements represent the financial position of the City at September 30, 2019, as well as the results of its financial operations, changes in net financial assets, and changes in cash flows for the nine months ended September 30, 2019.

Quarterly financial statements include year-to-date budgets, which are helpful in comparing planned and actual results during the fiscal year.  Some budget variances are due to timing differences in the year-to-date budget.  Administration continues to work on making year-to-date budgets as accurate as the annual budget.

Summary of year-to-date operations:
  • The City reported net debt of $21.2 million at the end of the third quarter, which is an improvement from year-end but higher than the comparable period in the prior year.  The 2019 budget reports closing net debt of $37.7 million.
  • Financial assets are down $3.1 million from the prior quarter, as most outstanding developer levies have now been collected and only one new developer agreement was signed in 2019.
  • Liabilities are up $10.7 million from the prior quarter, where $9.8 million of this increase can be attributed to taking on additional long-term debt.  Principal repayments of $924 thousand and interest of $964 thousand have been paid on this debt year-to-date.
  • Over the last nine months, the City increased its non-financial assets $32.9 million.  Major tangible capital asset expenditures included Pioneer Road, TLC outdoor rink, RCMP facility, Protective Services facility, the water main expansion (Century Road to Pioneer Road), storm system upgrades and the local roads.
  • Surplus of $22.2 million was recognized at the end of the third quarter, which is $1.6 million higher than planned.
    • Operating revenue and expenses came in under budget and the net result was a period surplus before capital items of approximately $6.5 million better than expected. These results can be attributed to a combination of factors: cost savings and deferrals identified by departments during budget preparation, unpredictability of ATE revenues (also impacts contract costs), lower than planned water consumption (also impacts contract costs), and timing differences in the recognition of revenue and expenses.
    • Capital revenue came in $4.1 million under budget, where the majority of the shortfall can be attributed to a decline in developer activity.  As previously mentioned, only one new developer agreement was signed in 2019.  Historically, six to nine developer agreements have been signed per year and for higher dollar values.
    • Contributed tangible capital assets are generally budgeted to occur in the fourth quarter as inspections are completed and assets are turned over to the City, although we did complete a few this year in advance of the fourth quarter. 
The interim financial statements have been shared with the City's management team and the Open Books portal on the City's website will be updated to reflect the third quarter results.

Fiscal Impact
Financial Implications:
3rd Quarter Financial Statements

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