TAMRMS#: B06
9.1
REQUEST FOR DECISION
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Audited Financial Statements and Year-End Annual Report *TIME SPECIFIC: 1:00 p.m.*
Presented by: Bill Fletcher, Chief Administrative Officer
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RECOMMENDED MOTION(S)
recommendation
That the City’s 2024 Annual Report, including the audited Consolidated Financial Statements for the fiscal year ended December 31, 2024, be approved.
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SUMMARY
The purpose of this report is to bring forward the City’s 2024 Annual Report, including the Consolidated Financial Statements, for approval.
BACKGROUND AND DISCUSSION
The Annual Report is an important element of the City’s communication efforts, providing residents and stakeholders with transparent and quality information on the City’s performance and financial position.
The report highlights the City’s major accomplishments, and it presents the City’s audited consolidated financial statements, statistics, and management commentary.
Administration has continued to deliver over 150 services to the community, with some highlights of these services provided in the report. In addition, great progress was made on advancing, supporting and enabling the achievement of priorities outlined in the Council’s Strategic Plan.
Below are highlights of the projects completed in 2024 across the five Council priority areas. The 2024 Annual Report contains more information on all other projects.
Economic Prosperity
The Lakeview Business District Servicing project advanced with Council’s approval of Capital Project Charter ENGS-085, covering road redesign, utilities, and infrastructure. Funding was secured through Borrowing Bylaw 26/2024. The St. Albert West Area Structure Plan (ASP) was approved in September, enabling Neighbourhood Plan development for the Badger Lands and Lakeview, with completion extended to March 2025. The Collaborative Economic Development (CED) project finalized its Framework, Memorandum of Understanding (MOU), and funding commitment letter, with the MOU to be presented to Council in early 2025. The updated Land Use Bylaw (LUB) 18/2024 and related Master Rates Bylaw changes were approved, with next steps focused on system alignment.
Downtown Vibrancy
The focus in 2024 was on exploring the development of Millennium Park. Following several activities to explore possible options for development, Council decided not to proceed with the Park development. All other projects planned to advance this Council priority have been completed in previous years.
Community Wellbeing
In 2024, Council approved a $2.84 million contribution for Mixed Market Housing at 22 St. Thomas Street, with Homeland Housing securing conditional loan approval through the Canada Mortgage and Housing Corporation.
The Youth Transitional Housing Feasibility Study concluded with a Needs Assessment Report and Council’s unanimous support to explore potential operators.
The Community Amenities Needs Assessment progressed with site studies and program reviews, setting the stage for 2025 decisions.
The Inclusion, Diversity, Equity, and Accessibility (IDEA) Strategy was advanced through employee engagement, policy reviews, and stakeholder interviews conducted in collaboration with the Colbourne Institute for Inclusive Leadership.
Progress also continued on developing a Reconciliation Action Plan/Indigenous Framework and building relationships with First Nations and Métis communities.
The Community Social Needs Assessment concluded with a "What We Heard" report, stakeholder engagement, and the release of the Community Social Roadmap to guide future initiatives.
Adapting to a Changing Natural Environment
Initiatives supporting this priority were completed in prior years, except the development of a Resilient Infrastructure Long-Range Strategy, which is scheduled to begin in late 2025.
Financial Sustainability
Several key initiatives advanced in support of this Council priority. The Long-term Debt Strategy progressed with the refinement of the Debt Management Policy, approved by Council in June.
The Mature Asset Management (AM) Program advanced with the finalization of the State of Infrastructure Report, vendor evaluations for the Enterprise Maintenance Management System, and updates to the AM Governance Structure.
The Multi-Year Budgeting Initiative progressed with project plan approval, stakeholder engagement, and data collection efforts to modernize financial planning.
The Procurement Audit Implementation project saw the successful launch of the Goods and Services Training Module and the development of standardized purchasing processes and directives, streamlining workflows and laying the groundwork for Phase 3 of the procurement initiatives.
The Records and Information Management Practices advanced with several notable achievements, including the award and finalization of the offsite storage contract, approval and publication of the Digitization Directive in July and development of related procedural documents.
The Integrated Risk Management Framework was advanced with updates to the Corporate Strategic Risk Register, enhancing risk awareness and strategic integration across the organization.
Significant progress was also made on the Strategic Plan performance measure to help plan and monitor performance. Having performance measures also meets the Government of Alberta's requirement for the Budget award.
2024 Financial Highlights
Administration is pleased to present the 2024 audited consolidated financial statements. The City’s auditors, KPMG LLP have audited these statements and have provided an unqualified opinion.
These financial statements meet the requirements of section 276 of the Municipal Government Act and are consistent with Canadian Generally Accepted Accounting Principles as recommended by the Public Sector Accounting Board and the Chartered Professional Accountants of Canada (CPA).
These financial statements represent the consolidated operating and capital activities of the City of St. Albert, the City of St. Albert Public Library, and the Arts and Heritage Foundation of St. Albert.
Administration offers the following high-level financial analysis:
Consolidated Statement of Financial Position
The City’s financial position remains strong at $83 million in net assets, which is equal to the City’s financial assets of $293 million less liabilities of $210 million.
The City’s financial assets grew from 2023 by $18.8 million, as a result of an increase in cash and cash equivalents by $31.7 million offset by a decrease in investments of $12 million, and a slight decrease in accounts receivable of $0.9 million. The increase in cash is due to the timing of grants and debenture financing, as well as cash from the maturity of investments. Also, more cash was held in the City’s bank accounts at year's end as the rate was more favorable than short-term rate quotes. Debenture financing was higher at $16.7 million compared to $9 million in the prior year.
On the other side of the equation, the City’s liabilities increased by $13.2 million from 2023, due largely to an increase in long-term debt by $7.1 million due to more debentures and an increase in offsite levies of $6.9 million due to more developer contributions for transportation and sanitary sewer. This is offset by a decrease in accounts payable and accrued liabilities due mainly to the timing of payables. Debt taken out this year was $16.7 million, which was for North St. Albert Trail ($10 million), North St. Albert Trail Corridor Management ($3 million), and Fountain Park Recreation Centre ($3.7 million).
The City’s non-financial assets of $1,366 million were an increase from 2023 of $43.9 million. These non-financial assets include tangible capital assets (TCA), prepaids and inventories of material and supplies. $45 million of this increase is attributed to TCA, which is made up of buildings, land, roads, and machinery and equipment. This is offset with a slight decrease of $1.1 million in prepaid expenses relating to a deposit in 2023 that was cleared in 2024.
In a little more detail:
• Engineered structures increased by $67 million which is made up of over $25 million for the pump station and reservoir rehab, $17 million in contributed assets from developers for Cherot, Riverside Developments and Jensen Lakes, $9 million for North St. Albert Trail, and $4.6 million for Water Network Level of Service.
• Assets under construction decreased by $7.3 million due to $15.9 million decrease for pump station and reservoir rehab put in service during the year. This was offset by an increase of $2.2 million for arterial and roadway rehab, $1.6 million for local and collector roadway programs and $1.3 million sediment and erosion control
• Building improvements increased by $6 million due mainly due to St. Albert Place renovations.
Overall, the City’s Accumulated Surplus or municipal equity increased to $1,449 million from $1,400 million in 2023. Most of the accumulated surplus is $1,262.4 million in equity in TCA. This is tangible capital assets, less depreciation, less debt, and less asset retirement obligation. The second component is Reserves of $188 million.
Consolidated Statement of Operations and Accumulated Surplus
This statement details the City’s revenues and expenses on a consolidated basis. The first section of the statement focuses on the consolidated operating revenues and expenses, which resulted in an annual surplus before capital revenue of $6.2 million. The City continues to maintain a healthy financial position by seeking cost reductions and managing service levels.
Total operating revenues increased by $21.5 million from 2023. This was due to changes in the following areas:
• Property Taxes increased by $9.6 million to support the 2024 Budget, which was approved by the Council.
• Sales and User Fees increased by $6.8 million due to increased demand for recreation services, facility rentals and transit services.
• Licenses and permits increased by $2 million due to development growth, including new subdivisions and recovered costs from a third-party fiber optics utility review.
Investment Income increased by $1.4 million due to favorable interest rates
• Electrical Franchise Fees increased by $1 million due to higher electricity delivery rates and growth.
On the other hand, the operating expenses increased by $12.1 million in the following functional areas:
• Emergency Services increased by $3.8 million due to an increase in contracted services for RCMP and overtime.
• Utility Services increased by $5.3 million due to increased Wastewater treatment rates and due to fluctuations in the discount rate used in adjusting for environmental liability. There was also an increase in contracted and general services due to contract renewals and an increase in services performed.
• General government increased by $2.8 million due to an increase in learning and development, due to better utilization, insurance costs due to higher premiums, and IT contracts costs due to annual increases from a vendor.
• Community and Recreation Services increased by $2.0 million with an increase in salaries due to step and COLA increases and an increase in casual wages as Fountain Park was closed at the beginning of 2023.
• These increases were offset by a decrease in Corporate Financing of $4.6 million due mainly to one time accounting accrual adjustment of employee benefits in 2023 and only a small adjustment was required in 2024.
Near the bottom of the page, capital revenues decreased by $20.7 million which was mainly due to a decrease in Contributed assets of $15.3million due to timing of the completion certificates received on developments and decrease in government transfers of $4.1 million due to timing of projects that had significant expenses in 2023 but wound down in 2024 and some projects where approval was delayed till 2025.
Overall, the City’s annual surplus remains financially strong at $49.4 million. This annual surplus is different than operating surplus as it includes non-cash items, such as amortization, accretion and contributed assets.
More detailed variance explanations on the functional divisions can be found in the fourth quarter report that was presented to Council on February 11, 2025.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
The Annual Report, once approved, will be posted to the City website.
IMPACTS OF RECOMMENDATION(S)
Financial:
None at this time.
Compliance & Legal:
As per section 276 of the MGA, a municipality must prepare annual financial statements for the immediately preceding year. Once approved the municipality must make its financial statements and the auditors report available to the public by May 1 of the current year.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
None at this time
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
N/A
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
Corporate Reporting - Corporate reports are provided to Council quarterly to meet Council’s need for regular and formal communication from the Chief Administrative Officer.
An Annual Business and Financial Report that includes progress towards the City's Strategic Plan and the City's Audited Financials, in accordance with the Government Finance Officers Association (GFOA) criteria and timelines.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
As per section 276 of the MGA, a municipality must prepare annual financial statements for the immediately preceding year. Once approved, the municipality must make its financial statements and the auditors' report available to the public by May 1 of the current year. Annual audited financial statements are required to be submitted to Municipal Affairs by May 1st of each year.
IMPACTS OF ALTERNATIVES CONSIDERED
ALTERNATIVE 1:
Council does not approve the annual report, which would delay the filing with Municipal Affairs and an extension would be required.
Compliance & Legal:
Annual audited financial statements are required to be submitted to Municipal Affairs by May 1st of each year. We would not be able to file with Municipal Affairs on time and would require an extension.
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Report Date: April 15, 2025
Author(s): Stella Tam and Varsha Dua
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: Bill Fletcher