by Timothy Schafer
Local Journalism Initiative Reporter, The Nelson Daily
Despite the pervasive economic repercussions of the pandemic the city has managed to pull through and establish a sizeable surplus and rich reserves, according to the city’s annual report.
The 2021 City of Nelson Annual Report detailed several aspects of the last year in review as it pertained to city operations, including a sum for the surplus.
The total accumulated surplus for the city increased by $9 million in 2021, jumping from $204 million to $213 million in 2021.
“This amount includes the city’s investment in capital assets, as well as reserves set aside to continue its program of infrastructure replacement and improvement,” said Chris Jury in the report.
For reserves, balances totalled $39 million at the end of 2021, with an additional $5 million in surplus set aside for other capital and strategic priorities.
“The city looks to build reserves to a sustainable level to minimize the short-term pressure on tax rates while meeting the long-term capital replacement requirements set out in the five-year financial plan,” the report explained.
The reserves are drawn upon to help fund the asset management plans for the city’s water, sewer, hydro and public works infrastructures.
Overall, the city added or replaced $10 million in capital assets in 2021.
Capital asset replacement is funded through reserves, external funding such as grants, or with long-term borrowing.
The report explained that long-term debt at the end of 2021 was $7.7 million, a decrease of $3.7 million from 2020, “as the city paid off some of its borrowing, while not adding any new debt to the balance sheet.”
The financial health and operations of the city — in an audit report from Grant Thornton LLP — through the financial statements was presented “fairly, in all material respects, the financial position of the city as at Dec. 31, 2021, and its results of operations, its changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.”
Operations highlights include:
• Revenue from taxation increased by $300,000 from the prior year or 2.5 per cent. This was due to the budgeted tax increase of 1.75 per cent in 2021, as well as additional revenues from growth to the tax base through new buildings and construction.
• Overall, revenue decreased from the prior year, owing primarily to a decrease in conditional grants earmarked for specific capital projects.
• Expenses increased in 2021 by $700,000, or 1.6 per cent. Increases are primarily due to negotiated rises in wages, as well as inflationary pressures on materials and supplies.