Red Deer City Hall. (Advocate file photo.)

Red Deer City Hall. (Advocate file photo.)

City surmounts pandemic challenges to retain good financial position, city council hears

However, efforts will be needed to rebuild operating reserves

The City of Red Deer is in decent financial shape, considering pandemic challenges, but needs to work at rebuilding its savings, city council heard on Monday.

Chief Financial Officer Ray MacIntosh told councillors that 2021 wasn’t an entirely bad year, all things considered.

While revenues in transit, utilities and land sales were still down and property taxes were flat, some extra grants were provided to municipalities from higher levels of government and the overall expenses of running the city were lower, he added.

“Facility user fees and rentals have not decreased but have not recovered to their pre-pandemic levels.”

MacIntosh said the city had budgeted for an operating deficit of $38 million, but due to managing expenses, the actual deficit was $31 million.

However, some impact can be seen in The City’s reserve balances. End-of-year operating reserves decreased by approximately $18.7 million.

Council heard that the city’s operating reserved were less than where they should be, optimally, and it will be necessary to make efforts to rebuild them in the coming years.

But Macintosh said federal and provincial government stimulus grants allowed the City of Red Deer to get a start on more capital projects than were anticipated in 2021.

“Total capital funding received during the year exceeded total capital expenditures,” he said, and this resulted in a decrease of $7.3 million in the capital deficit.

The city helped Westerner Park get though the pandemic, and took other actions “to blunt the results due to COVID-19 by reducing tax increases to zero, holding the line on other fee increases, and working closely with those finding difficulty in payments and drawing from reserve to make ends meet,” said MacIntosh.

“We have weathered the storm. By and large, our capital reserves are still strong, our debt reasonable and our tax rates in line with comparable municipalities. The City is positioned well to take advantage of a bright future,” he said.

Robyn Eeson, a partner with the city’s auditor KPMG, confirmed to council that the city remains in a good financial position.

Red Deer City Council