TAMRMS#: B06
11.1
REQUEST FOR DECISION
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Audited Financial Statements and Year-End Annual Report **TIME SPECIFIC 9:30 AM
Presented by: Bill Fletcher, Chief Administrative Officer
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RECOMMENDED MOTION(S)
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That the City’s 2025 Annual Report, including the audited Consolidated Financial Statements for the fiscal year ended December 31, 2025, be approved.
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SUMMARY
The purpose of this report is to bring forward the City’s 2025 Annual report including the Consolidated Financial Statements for approval.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
Section 276 of the MGA provides as follows:
Annual financial statements
276(1) Each municipality must prepare annual financial statements of the municipality for the immediately preceding year in accordance with
(a) Canadian generally accepted accounting principles for municipal governments, which are the standards approved by the Public Sector Accounting Board included in the CPA Canada Public Sector Accounting Handbook, and
(b) any modification of the principles or any supplementary accounting standards or principles established by the Minister by regulation.
(2) The municipality’s financial statements must include
(a) the municipality’s debt limit, and
(b) the amount of the municipality’s debt as defined in the regulations under section 271.
(3) Each municipality must make its financial statements, or a summary of them, and the auditor’s report of the financial statements available to the public in the manner the council considers appropriate by May 1 of the year following the year for which the financial statements have been prepared.
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. The report highlights the City’s major accomplishments, and it presents the City’s audited consolidated financial statements, statistics, and management commentary.
In 2025, Administration continued to deliver over 150 services to the community with some service highlights provided in the report. In addition, great progress was made on advancing, supporting and enabling achievement of priorities outlined in the Council’s Strategic Plan.
Below are highlights of the projects completed in 2025 across the five Council priority areas. The 2025 Annual Report contains more information on all other projects.
Economic Prosperity
In 2025, the Lakeview Business District Servicing project moved from planning to implementation, with construction commencing in June. By year-end, the first draft of the design brief was completed, and detailed engineering for roadways and underground utilities progressed. The St. Albert West Area Structure Plan (ASP), Lakeview Neighbourhood Plan, and Neighbourhood Plan C were approved, enabling development and shifting planning to the Badger Neighbourhood Plan. For the Infill Strategy, technical growth and servicing studies were initiated and planning is underway for Transit Corridor and Neighbourhood Intensification, with public engagement scheduled for 2026.
In 2025, projects planned to advance the Downtown Vibrancy priority have been completed, including the presentation on the Downtown Area Redevelopment Plan to the Standing Committee of the Whole. Work also took place to explore the development of the Millennium Park, with Council deciding not to proceed with the development of the park.
Community Wellbeing
In 2025, the 22 St. Thomas Street mixed market housing project secured $14.5 million in joint Provincial and Federal funding in July, and primary planning phase was completed by the end of the year. The Inclusion, Diversity, Equity and Accessibility (IDEA) Strategy was approved by Council in July, and implementation of the 2025-2029 strategy began in Q3. Community Amenities Planning was completed in the first quarter, including technical site studies and partnership reviews, with functional design work scheduled to begin in 2026.
Adapting to a Changing Natural Environment
In 2025, the Green Environment Strategy transitioned from planning to implementation, supporting environmental operations and sustainability goals. The Clean Energy Improvement Program was launched to provide residents and businesses with energy efficiency incentives, with outreach conducted to increase participation. The Climate Adaptation Plan was finalized, with work underway to integrate resiliency measures across municipal departments to support infrastructure and asset management. Waste Minimization Strategies progressed through refinement of diversion targets, technical reviews of waste management processes, and exploration of waste-to-energy opportunities.
Financial Sustainability
In 2025, online options for building and development applications were expanded through integration into the online portal, enabling digital submission, tracking, and payment. The Asset Management Strategy and updated Asset Management Policy were finalized, with inventory of core infrastructure assets completed, and lifecycle replacement schedules established to support long-term financial planning.
The Digitization Directive was implemented in July, establishing a framework for transitioning physical records to digital formats and enabling the decommissioning of off-site storage. The transition to a multi-year budgeting framework was completed, aligning departmental business plans with a four-year financial forecast. Standardized capital project and contract management procedures were also established, including project gate reviews and centralized contract tracking to support consistent project delivery and budget oversight.
2025 Financial Highlights
Administration is pleased to present the 2025 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 $71 million in net assets, which is equal to the City’s financial assets of $300 million less liabilities of $229 million.
The City’s financial assets grew from 2024 by $6.6 million, as a result of an increase in cash and cash equivalents by $1.9 million offset by a decrease in investments of $5.3 million, and an increase in accounts receivable of $10 million. The increase in cash is due to timing of grants and debenture financing as well as cash from the maturity of investments. The increase in accounts receivable is due to the Local Government Fiscal Framework (LGFF) funding.
On the other side of the equation the City’s liabilities increased by $19.2 million from 2024, due largely to an increase in long term debt by $11.5 million due to more debentures as well as increase in deferred revenue of $7.6 million. Total debt taken out this year was $20.7 million, which was for Transit Garage Expansion ($6 million), North St. Albert Trail ($5.5 million), Fire Hall 4 ($4.7 million), and Villeneuve Road ($2 million) along with a reclass of the Clean Energy Improvement Program (CEIP) loan of $2.5M. Deferred revenue increase is a result of the timing of projects and when grant was received.
The City’s non-financial assets of $1,441 million was an increase from 2024 of $74.8 million. These non-financial assets include tangible capital assets (TCA), prepaids and inventories of material and supplies. $74.9 million of this increase is attributed to TCA which is made up of buildings, land, roads, and machinery and equipment.
In a little more detail:
• Engineered structures increased by $49 million which is made up of over $13.3 million in contributed assets from developers for Nouveau, Cherot, Riverside and Jensen Lakes, $5.6 million for North St. Albert Trail, $4M for roadway rehab program, $4 million in sediment & erosion control, $3.3 million for the pump station and reservoir rehab, and $3 million for Villeneuve Rd rebuild.
• Assets under construction increased by $43 million due to $19 million increase in municipal facilities repairs & renewals, $8.3 million increase in Ray Gibbon Drive, $7.5 million increase in transit garage expansion, $4.5 million in storm management LOS.
• Vehicles increased by $11 million due to $4M in transit bus lifecycle, $3.1M fire aerial apparatus, $2.5M in Mobile Equipment replacement plan.
• Land improvement increased by $6.7 million due to $1.5M on Oakmont Trail Ph2, $1M on North St Albert Trail Improvements, and $.9M on pump station & reservoir rehab, and $.9M on Villeneuve Rd rebuild.
Overall, the City’s Accumulated Surplus or municipal equity increased to $1,511 million from $1,449 million in 2024. The majority of the accumulated surplus is $1,328 million in equity in TCA. This is tangible capital assets, less depreciation, less debt, 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 $3.2 million. The City continues to maintain a healthy financial position by seeking cost reductions and managing service levels.
Total operating revenues increased by $13.3 million from 2024. This was due mainly to changes in the following areas:
• Property Taxes increased by $7.8 million to support the 2025 Budget which was approved by Council.
• Sales and User Fees increased by $5.9 million due to increased primarily due to higher demand for services and adjustments made through the City’s annual fee review process for recreation, culture, and utility rates.
• Franchise fees increased by $1 million due to delivery rate adjustments and St.Albert’s growth for natural gas franchise fees.
• Licenses and permits decreased by $0.9 million due to decrease in building, development, and electrical permit activity.
• Investment Income decreased slightly by $0.5 million due to a change in the mix of investments.
On the other side, the operating expenses increased by $16.4 million in the following functional areas:
• Planning and Engineering Services increased by $4.1 million due to inflationary increases in salaries, wages and benefits, amortization costs and non-capital transfer expenses.
• Utility Services increased by $3.6 million due to annual utility rate increase, purchase of Wastewater treatment costs from a third party and amortization expense.
• Public Operations increased by $2.5 million due to inflationary increases in salaries, wages and benefits, increased transit contract costs for growth areas and ridership, as well as snow and ice removals due to unfavourable weather and a switch to contracted services for Nakî Transit Centre as compared to 2024.
• General government increased by $1.8 million due to inflationary increases in salaries, wages and benefits, insurance expenses and the recruitment of new staff. This is offset by slightly lower amortization costs as compared to prior year.
• Community and Recreation Services increased by $1.7 million due to inflationary increases in salaries, wages and benefits, and the recruitment of new staff.
Near the bottom of the page, capital revenues increased by $15.8 million which was mainly due to an increase in government transfers including Ray Gibbon Drive Grant of $9.5 million as well as timing of completed projects under MSI and CCBF. The increase in developer contributions and levies of $5.3 million more developer contributions for transportation and sanitary sewer. These are offset by a decrease in Contributed assets of $8.3 million due to timing of the completion certificates received on developments.
Overall, the City’s annual surplus remains financially strong at $62.1 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 17, 2026.
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
Not applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A.
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 file with Municipal Affairs on time and would require an extension.
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Report Date: April 21, 2026
Author(s): Varsha Dua and Stella Tam
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher