Monday, October 15, 2018 - 5:15 PM

Executive Report on Revenue and Expenditure, 2017

The City of St. John’s 2017 Executive Summary Report on Revenue and Expenditure was presented at the regular meeting of St. John’s City Council today by Councillor Dave Lane, lead councillor for Finance and Administration. The Executive Summary report, while still based on audited information, is reported using the cash basis method of accounting and allows for direct comparison of budget vs actual results which serves to ensure the City is open and transparent in its financial planning and reporting.
“The report for 2017 shows a surplus of $3,075,597,” explained Councillor Lane. “This surplus equates to 1.04 per cent of the City’s total gross adjusted budget of $296,605,853.”
Overall, revenues exceeded the budget by 12.26M, or 4.13 per cent of the gross adjusted revenue budget of $296,605,853, while actual expenditures exceeded budget by $9.18M, or 3.1 per cent of the gross adjusted expenditure, resulting in a surplus. The gross adjusted budget reflects changes that happen throughout the year – the biggest of which is transfers from the City’s reserves. Excluding these items, the overall revenue variance is $2.44M, favourable, or 0.82 per cent of gross revenue. The comparable expenditure variance adjusts from unfavorable of $9.18M, to a favorable $634K, or 0.21 per cent.
Breakdown of variances in revenue and expenditures is in the attached Executive Summary Report.

“Given that the City is projecting a deficit in 2019, a surplus from 2017 will certainly be a benefit,” explained Councillor Lane. “Applying this surplus - plus funds held in reserve from previous years -towards reducing our pension debt provides both immediate and long-term benefits to the tax payer.”

The City will pay down $6M of its pension debt which will result in the elimination of payments from future operating budgets as follows:

2019 2020 2021 2022 2023
$1,590,000 $1,590,000 $1,590,000 $1,590,000 $397,500

This is a total reduction of $6,757,500. Given the initial contribution by the City is $6M, this results in interest savings to taxpayers of $757,500.

This approach reduces the City’s net debt, reduces interest costs, and provides some mil rate relief by permanently reducing the projected operating budget deficits. The City still holds an additional $6M in reserve as protection against unforeseen events, contingencies and emergencies. The option of investing some of the surplus in energy saving programs/technologies may also be explored.
Media Contact:

Kelly Maguire
Media Relations
City of St. John's