Revenue from taxes and services was up some for the Strathcona Regional District in 2018, while grant money was down, or at least delayed.
These were a few of the highlights from a recent presentation of the SRD’s audited financial statements. These compared how the regional district had fared with the budget.
SRD chief financial officer Myriah Foort and Cory Vanderhorst from Meyers Norris Penny LLP gave a presentation on the audited financial statements at the May 8 meeting, with Vanderhorst discussing the audit process briefly, while Foort handled the details of the statements.
The presentation amounted to a laundry list of projects for the regional district last year and what the financial impacts were. For the tax requisition, there was a 1.5 per cent increase in 2018, from $11 million up to $11.2 million, as had been budgeted. Sales of services increased 21.9 per cent to $2.9 million, while government grants decreased by 38.4 per cent, or $986,000.
The SRD had budgeted in 2018 for $13 million in grants, but some have been delayed. The most notable example is the $11 million for the Connected Coast project, which was delayed until this year pending federal and provincial grant approval.
“We had hoped to receive those grants and actually start building in 2018,” Foort said.
Overall, regional district revenue increased by 4.4 per cent. On the expense side, the costs went up by 6.6 per cent. Some of this came from general government service or planning services. Environmental health services increased, especially from higher bulk water costs to Area D. However, the statements note that the costs came in $115,000 under budget because of water conservation efforts last year.
At the outset, Foort focused on SRD financial assets, which increased 26.9 per cent to $29.7 million in 2018. This included a $3 million increase in the SRD’s cash balance. Of this, $1.5 million is in reserves, much of it devoted to the REC-REATE project at Strathcona Gardens.
The SRD’s surplus funds increased by 8.2 per cent to almost $33.6 million. This included a $1.4 million increase to reserves, as well as $1.2 million for Strathcona Gardens, general administration and the Area D water service. The SRD has been relying on reserves to pay for the shortfall from Area D water service in recent years, Foort said, but with rate hikes the gap is lessening. The doubling of the water rates last year added $500,000, moving the service closer toward cost recovery.
“Area D is moving toward a more sustainable level,” she said. “We’re moving in the right direction there.”
As well, the SRD saw a $400,000 increase in operating funds, which Foort said is comprised of the annual surplus of each of the services.
Foort recommended the SRD should discuss whether to rely on surpluses or change to more stable, incremental requisitions and user fees. She explained that if the regional district ever spent what it budgeted, it would be faced with bringing in larger requisitions the following year.
Liabilities for the regional district have increased too, by 37.5 per cent, or equal to about $15.6 million. Some of this was from minor changes to accounts payable and deferred revenue.
A large portion – a $4.8 million increase to $8.4 million – was related to municipal debt from the City of Campbell River. The city obtained $4.3 million in long-term borrowing last year. To borrow through the province’s Municipal Finance Authority, regional districts act as guarantors on the debt, meaning the amounts are recorded on the SRD financial statements.
There was also a $426,000 increase in the overall regional debt to $2.3 million for its own projects.
“We continue to pay down the debt,” Foort said.
Included in this were $400,000 for corporate office renovations taking place, as well as the payoff for a fire truck for Cortes Island and Strathcona Gardens equipment. There are also continued payments for Area B Whaletown debt and the Craig Road water system. Finally, the SRD borrowed an additional $134,000 for the Quathiaski Cover sewer extension project on Quadra Island for its portion to match provincial grant money for the work.
The value of non-financial assets grew by 2.8 per cent to $19.5 million. Much of this came from land and improvements, such as from a Hyacinthe Bay land donation for a nature reserve, valued at $307,000, and a $177,000 purchase on Read Island for land to be developed into parkland.
Buildings, including the Hyacinthe Bay land’s cabin, and improvements at Strathcona Gardens also added to the value, as did other SRD assets such as machinery and equipment. The value of the expanded sewer at Quathiaski Cove increased by $936,000, as phase one was completed.
As well, the SRD amortized its assets to the tune of $915,000, which resulted in a net of $500,000.
“The good news is you want to continue to invest in those assets,” Foort said. “We’re continuing to invest in our services, we’re continuing to invest in our assets.”
The conclusion of the financial statements note that 2018 was a “busy year” with focus on moving forward on major initiatives such as the Strathcona Gardens REC-REATE upgrade, the Connected Coast connectivity project, community health network initiatives and infrastructure upgrade work.
“I would say our fiscal health is gradually improving,” Foort said.