Tuesday, March 18, 2008

Middleton Way gobbles up last year's Operating Surplus.

Last year's net operating surplus in the General revenue fund was $1,504,787. ($84,096 shown 2007 surplus PLUS Net Effect of Middleton Way project financing of $1,420,691).

Most of this surplus money was used to cover the shortfall in the Middleton Way project that was a project that was not in the original 2007 budget. Because it was used there were not sufficient monies left to place the $787,483 RCMP surplus in the RCMP Contingency Reserve as was required by Council Policy. (See details at Don Quixote Rant )

Most of the actual surplus came from the RCMP surplus and the underestimation of return on short term investments. (guesstimate of $1,000,000). This year the new CFO has budgeted for $1,500,000 in this category as compared to the last years BUDGETED figure of $240,000. Finally we get a revenue projection that is realistic. (at least in this line item.)

This type of budget surprise when a Council moves up a major project that is not in the budget is generally resolved by using an amendment to the 5 year financial plan as is required by the community Charter. This amendment is the authorization for the implementation and funding of the surprise project. It is generally used not only to give authorization and funding sources but also to preserve the historical record and to prevent a rogue Council from grabbing anticipated surpluses and throwing them at the 'flavour of the day' type projects.

Hopefully, this official transfer of this money INTO the Police reserve as is required by Council Policy will be accomplished in the near future by a formal resolution authorizing it and the ratification of the transfer OUT of this reserve for its actual use as a source of funds for Middleton will occur with a simultaneous motion.
---------------------
According to the figures presented at the last COW special budget meeting the Middleton Way Project which was budgeted for at $1,467,352.00 came in at $2,678,675.26.

No comments: