The City of Prince George’s annual surplus for 2024 was more than twice as large as that year’s budget estimated.
At a Wednesday, May 7 meeting of the city’s Standing Committee on Finance and Audit, KPMG Canada’s Corey Naphtali presented the city’s 2024 financial statements as well as the results of an audit.
Those documents show that after budgeting for an annual surplus of almost $19.5 million in 2024, the actual surplus came in at around $42.5 million — around $23 million more than expected.
Though the city’s expenses for the year turned out to be around $4.2 million more than was budgeted for, revenues were almost $27.4 million higher than expected.
A breakdown of the city’s revenues for included in KPMG’s presentation shows that tax revenues increased from around $138.8 million in 2023 to just over $148 million in 2024.
Revenues from services, user rates and rentals increased from around $56.6 million in 2023 to around $60.6 million in 2024. Investment income went up from around $13.3 million in 2023 to around $14.1 million in 2024.
For expenses, the largest increase came in the protective services category. After spending around $63.2 million in 2023, protective services costs went up to almost $69 million, which Naphtali attributed to likely being related to the city’s contract with RCMP.
When it comes to the surplus generated in the city’s operating budget, it was around $28.8 million in 2024, up from around $24.5 million in 2023.
The city’s director of finance and IT services, Kris Dalio, said the surplus is guided somewhat by sustainable finance policy.
“Basically, if we have an excess of five to 10 per cent of our operating expenditures for a year in that surplus, we do have the option of transferring it out to the capital expenditures plan of its fund, whether that be general or sewer or water,” Dalio said.
Committee chair Coun. Cori Ramsay said that taxpayers might wonder why they’re seeing an increase in taxes despite running a surplus.
“If you were to boil it down for a household, if you have the ability to have savings in case your roof falls in or you had some sort of emergency that came up, that’s what that surplus is for … but on our municipal scale, which is quite large,” Dalio replied.
Coun. Tim Bennett asked why there was such a discrepancy in between the budgeted and actual surplus in 2024.
Part of that, Dalio said, is because there’s different reporting for a budget compared to audited financial statements due to accounting standards.
He pointed to note 14 in the audited financial statements, which state that the surplus was adjusted by removing the purchase of tangible capital assets, debt servicing and deferred revenue and including expenses from amortization.
“When we present a budget to you, it truly is your revenues, your expenditures, your debt, your transfers and they all balance to zero,” Dalio said. “And so, we do have a balanced budget, that’s part of a Community Charter requirement. But when you look at it in a financial statement format, it doesn’t look that way.”
On infrastructure, Dalio said the implementation of the one per cent yearly addition to the city’s tax levy going to the general infrastructure reinvestment fund “is one of the most important financial long-term decisions that council has made.”
“I think it’s so important and it needs to be there for quite a few years more, actually,” Dalio said. “But if we get to the point where the community is saying ‘we’re paying too much,’ then we have to start talking about services that we are going to provide again.”
KPMG’s presentation showed that the city also has total financial assets worth around $301.7 million and liabilities worth around $199.2 million for a net position of around $102.5 million.
That is better than the projected net financial assets projected in the 2024 budget of around $88.4 million.
Prince George also has non-financial assets — comprised of prepaid expenses, inventories of various kinds and tangible capital assets — worth around $838.3 million.
