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Town of Banff predicting significant budget surplus for 2019

Banff's third-quarter financial statements predict a $984,620 unrestricted surplus. Town council will make final decision on what to do with unexpected funds.
Town of Banff
Banff town hall. RMO FILE PHOTO

BANFF – The Town of Banff is on a path towards an almost $1 million surplus this year.

The 2019 third-quarter financial statements, which were presented to Banff’s governance and finance committee last week, predict an unrestricted surplus of $984,620.

Town officials say the surplus is due primarily to $630,000 in increased revenue from building and street use permits related to ongoing construction activity, as well as a $470,000 reduction in wages and benefits for municipal staff in several departments.

“There are a number of other offsetting variances throughout the organization, but those are the two things that are driving, in large part, the overall variance in the unrestricted surplus,” said Chris Hughes, the Town’s finance manager.

Building permit revenue is up by $440,000, while development permits have been increased by $95,000.

“It’s worth noting that we ended with less than $80,000 worth of building permits in 2018 and we’re forecasting $740,000 in 2019,” said Hughes.

"I think it highlights the volatility and variability and difficulty in predicting these revenues when you see a 10-fold increase from year to year.”

Street use permit revenue increased by $97,000, which Hughes said is mainly related to ongoing construction activity in Banff.

“If you’ve driven around town, you’ll have noticed there’s a lot of it,” he said.

Councillor Chip Olver voiced concern about the workload for the planning and development department.

“This is so much more than what was expected, so much more work for staff to do this in a timely manner, “ she said.

Randall McKay, interim town manager, said the department is coping, but there has been a lot of changeover with the restructuring of the department.

“These were projects that were ready to go … a handful were ready to go, and they were just held over until 2019 to start,” he said.

The $470,000 reduction in wages and benefits comes from many departments as a result of staff turnover, vacant positions, restructuring of several departments, and departure of top paid Robert Earl, former town manager.

Due to business activity in town, business licence revenue is also up for the planning and development department to the tune $36,000 over historical volumes of business licences.

In addition, Banff Lake Louise Tourism is getting $160,000 more than it anticipated in schedule B fees due to increased revenue.

“They’ll be grateful to us, won’t they,” said Coun. Peter Poole.

Banff’s financial plan recommends transferring any unrestricted surplus into the budget stabilization reserve – a fund used in the event of an unforeseen annual deficit, or for council to fund one-off projects – until it reaches its set cap.

For example, last year Banff ended 2018 with a $410,000 surplus. Council opted to put $180,000 into its budget stabilization fund and the remaining $230,000 in the general capital reserve.

Following cuts in the United Conservative Party’s 2019 provincial budget released last month, the Town of Banff is facing a capital funding shortfall as well as uncertainties surrounding funding for important community social services programs in the community.

“We will, at year end, bring back options to use this surplus as council sees fit,” said Hughes.

Banff's 2020 budget and service review meetings kick off Monday (Dec. 2) from 9 a.m. to 4 p.m. at Town Hall.

 




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