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RFD- 3573 Administrative Updates   Item #   8. b.    
Regular Council Meeting Agenda
Meeting Date: 08/12/2019  
Title:    2019 Second 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 second quarter financial statements and major capital projects report 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 June 30, 2019, as well as the results of its financial operations, changes in net financial assets, and changes in cash flows for the six months ended June 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 the accuracy of the year-to-date budgets as good as the annual budget.

Year-to-date operations are generally within budget:
  • The City reported net debt of $8.6M at the end of the second quarter of 2019 (2018 - $7.0M net financial assets).  A primary contributor to this change was that net debt at December 31, 2018 was $4.2M higher than planned.  Planned net debt at December 31, 2019 is $37.4M (2018 - $23.3M).   
  • Operating revenues were generally in line with budget.  Sales and user fees came in slightly under budget as the volume of water sold in the quarter and photo enforcement revenue were less than anticipated. 
  • Operating expenses were considerably under budget.  This variance can be primarily attributed to the trend in water sales and photo enforcement revenues, combined with a delayed start on some Information Systems and Engineering projects which impacted associated amortization and general expenses.
  • Capital revenues were higher than planned as grant revenue of $9.9M was recognized to fund costs associated with the Protective Services Facility ($6.7M), the RCMP Facility ($1.4M), Road Rehab ($1.2M) and the purchase of 3 buses ($680k). In addition the City recognized some contributed tangible capital assets ($850k) during the period; these generally are not processed until the third or fourth quarter.
  • The combination of the above resulted in overall period surplus in excess of budget of $5.0M at the end of the second quarter of 2019.
The major capital projects report provides a summary of the status of capital projects with a budgeted annual cost of $1.0M or more, which represents 80% of the City's approved 2019 capital budget.  Projects are on schedule and are on budget as of the end of the second quarter of 2019.  A number of tenders came in under budget and there was a change in scope of another project.  Budget reallocations and scope changes were approved by Council.
The interim financial statements and major capital projects report have been shared with the City's management team.  The Open Books portal on the City's website will be updated to reflect the second quarter results.
Q2-2019 Financial Statements
Major Capital Projects Report

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