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RFD- 3919 Administrative Updates   Item #   9. a.    
Regular Council Meeting Agenda
Meeting Date: 05/25/2020  
Title:    2020 First Quarter Financial Statements - Boje
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 2020 first 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.  Administration is available to provide Council with an overview and answer any questions about the financial statements.

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 March 31, 2020, as well as the results of its financial operations, changes in net debt, and changes in cash flows for the three months ended March 31, 2020. 

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 the year-to-date budgets as accurate as the annual budget.

Year-to-date operations are generally within budget:
  • The City's net debt position increased since year-end, as financial assets decreased and liabilities increased.  Financial assets decreased as accounts receivable and investments were lower.  2019 Federal Gas Tax funds ($4 million) were accrued as receivable at year-end and received in the first quarter of 2020.  In addition, funds were withdrawn from the City's high interest savings account to supplement operating cash flow.  Liabilities were higher as a result of deferred property tax payments ($5.3 million) for pre-authorized payments that will be applied to the receivable in the second quarter.
  • Operating revenues were comparable to budget and up from the same period of the prior year.  Expenses were slightly under budget and up from the same period of the prior year.  Salaries, wages and benefits were lower than budget as WCB costs were not paid until the 2nd quarter of 2020 and Blue Cross Premiums were overfunded in 2019 (credit artificially reduced 2019 expenses).  All other variances from budget were individually insignificant and the impact was reduced by higher than anticipated snow removal expenses in the first quarter of 2020.
  • The largest contributor to period deficit being greater than budget was the deferral of capital transactions planned for the first quarter of 2020.  The Westwind land sales did not occur so the City did not realize the anticipated gain on disposal of tangible capital assets.  In addition, the permanent park and ride project was planned for the first quarter and was deferred which resulted in less government transfers for capital being recognized in the period.
  • Net debt also came in higher than budget.  Again, the deferral of capital projects in the first quarter of 2020 was a major contributor to this variance.

The impact of COVID-19 is not readily evidenced in the first quarter actuals, aside from the shift in capital expenses.  Second quarter actuals will likely present a greater variance in the City's operational expenses and revenue comparisons to budget.
The interim financial statements have been posted on the City website and a copy has been distributed to the City's management team.
First Quarter Financial Statements

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