Spruce Grove recalculates income and expenses during spring budget adjustment process

0

The estimated total property assessment growth at the time of Budget 2022 approval was $1,081,489 or 2.52%. After receipt of the valuation data, it was determined that the actual growth was higher than the original estimate of $1,105,586 or 2.61%. This generated $24,097 in additional property tax revenue due to growth.

MSI operating grant revenue was initially estimated at $239,000 based on information available at the time of the 2022 budget approval. When final allocations were announced by the Government of Alberta in February 2022, the City received funding in the amount of $259,530, resulting in additional operating grant income of $20,530 for MSI.

With increased development activity, the City has seen an increase in license and permit revenue, resulting in building permit and land grading permit revenue exceeding budget in the first quarter of 2022. By As a result, estimated building permit revenue has been increased by $100,000 and lot grading permit revenue has been increased by $10,000 for 2022.

Between March 2020 and September 2021, a number of City facilities were operating walk-in and rentals were temporarily closed due to the pandemic. This had a negative impact on the rental income the City was able to generate through its operations. Since many of these facilities have now been reopened and rental operations have resumed, there is an estimated increase of $39,900 in rental income for 2022.

The City charges ATCO Gas and Pipelines natural gas franchise fees for the exclusive right to provide natural gas services in Spruce Grove as well as access to City lands to construct, maintain and operate related assets. In addition, electrical franchise fees are charged to Fortis Alberta for similar rights. Due to the colder weather during the first quarter of the year, flow-through and utilization rates were higher, resulting in an estimated revenue increase of $206,473.

In the last quarter of 2021, a new contract for fixed rates for electricity and natural gas services was negotiated by the City. Contract negotiations have resulted in higher than expected rates for electricity and natural gas services in 2022. Increases in fuel prices have also resulted in an increase in the cost of purchasing oil and gas. The 2022 budget has been amended to include an estimated total increase in these costs of $326,000.

In the past, the City regularly conducted organizational effectiveness reviews. These exams have been suspended during the pandemic in an effort to manage costs. The City took over some of this work towards the end of 2021 and now proposes to continue this work in the future. A cost of $75,000 has been added to the spring budget adjustment to fund this ongoing work.

The overall impact of these spring budget adjustments on the 2022 operating budget and tax rate is non-existent, as the increase in operating revenue completely offsets the increase in operating expenses. Given the magnitude of the adjustment and the fact that it has no impact on the tax rate, the City has stated that no further communication is planned regarding the spring budget adjustment during future board meetings.

“Kudos to our administration for balancing the expenses we had planned with the revenue increases with no further impact to our taxpayers. All of this activity is a testament to those who want to invest in our community,” said Mayor Jeff Acker.

Share.

Comments are closed.