The Strathcona Regional District is in better financial shape than its B.C. counterparts, but an auditor warns tough times could be ahead.
Chartered accountant Brad Piercy of Meyers Norris Penny said the regional district’s debt and expenses are low compared to other regional districts across the province.
Expenses for 2012 were $9.9 million, up from 2012’s figure of $9.5 million, but revenue was up to $10.2 million in 2012 from $9.8 million in 2011.
“Your assets are greater than your liabilities this year,” Piercy said. “You’re better than the other regional districts – there’s one above you, but you’re right at the top. You guys are totally great. You’re fine, and it’s because you don’t have any huge debt.”
The debt stands at $493,596. The regional district also has a surplus of $347,560 in 2012 because there is money being held over for the $1.1 million Rod Brind’Amour Arena improvement project.
“You had a lot of repairs for Strathcona Gardens budgeted for 2012, but they are happening in 2013. Basically there’s a million dollars for Strathcona Gardens that’s going to get spent this year,” Piercy said.
It’s those improvements to Strathcona Gardens that Piercy said will alter the Strathcona Regional District’s financial outlook.
Piercy said that other regional district’s have higher debt simply because they’ve recently undertaken expensive infrastructure projects, while Strathcona Regional District has not – at least not yet.
“They don’t have to replace as much assets in the future as you guys do,” Piercy said. “At some point you’ve got to put a bunch of money into Strathcona Gardens and that’s happening next year. When you look at the next 10 years, you’re going to have to beef up your capital spending.”
Piercy also explained that each year infrastructure improvements are held off, the value of the regional district’s assets depreciate in value.
However, as Director Brenda Leigh (Oyster Bay-Buttle Lake) noted, lighting upgrades at Strathcona Gardens and a new ice surface for the arena would factor into the amortization of the regional district’s assets.
Piercy said the regional district is in a good spot now, but that could change in future years if improvement projects are needed.
“All of your trends are positive and they’re positive because all of your capital projects haven’t begun,” Piercy said. “On the flip side, your assets are more depreciated (than other regional district’s) because you haven’t spent the large dollars.”
Director Larry Samson said he’s concerned what that could mean.
“Keep in mind, the train is coming and future taxpayers and future (regional district) boards are going to get hit,” Samson said.
Leigh said her philosophy would be to use a mixture of borrowing, taxation and draws on reserves to fund future expenses.
Piercy said “there is no right answer” and it’s up to the regional district board to decide how it wants to spend its money.