A major unexpected rebound in Cochrane's growth played a major part in the town's $3.2 million surplus for 2021.
It also had unexpected savings that likely won't continue into 2022.
Last night, Cochrane town council received its audited financial statements and fourth-quarter financial report for 2021.
In a year where the town buckled down for the worse and expected little growth, the economy took a sudden uptick midway through the year in new home construction and real estate sales. That growth is expected to continue throughout 2022.
High growth saw town revenues come in $1.9 million higher than anticipated. It heavily factored into an increased revenue of $455,000 from user fees and taxes, and $647,000 in additional building permit sales for new homes and renovations.
Fines and penalties were $273,000 over budget. Operating grants and investment revenue comprised $311,000 of the surplus revenues and general revenue increased by $232,500.
While the town realized unexpected savings of $1.3 million, the fourth-quarter financial report of town financial services manager Tanya Galon concluded these savings aren't sustainable.
Staffing vacancies and staff training reductions accounted for $673,000 of these savings, $313,000 was due to drawing a debenture later than anticipated, legal costs were down $199,000, and the RCMP policing costs were $105,000 less than anticipated. Operating expenses dropped $117,000 largely due to a shift from in-person to virtual during the COVID pandemic measures.
Katherine Van Keimpema, Cochrane's Corporate Service executive director, said there are no indications of these tax savings will continue into the future.
"However," she told council, "it does provide the municipality of Cochrane an opportunity to have money in a savings account that we wouldn't have had before. There's $3.2 million more in our savings account, and earlier this evening I talked about how our reserve balances are decreasing."
How the public will react to the surplus seemed to weigh heavily on the mind of some councillors. They expect the natural reaction of whether these savings could be passed along and reduce the forecasted 10 per cent increase in property taxes for 2022.
"We do take a close analysis of the causes of the surplus, so I can tell you if it was a reoccurring cause of the surplus, then I would be the first person to stand before you and say I think we need to do a budget reduction," said Van Keimpema.
Councillor Tara McFadden says the surplus should be celebrated but in reality, it was an aberration of COVID.
"When I think back to how we were planning out last year's budget, we were still in the middle of COVID, there really wasn't an end in sight, and we were trying to button down and run on minimal resources. So the budget that we laid out was very much an emergency budget, it was a crisis management budget."
The entire surplus is being transferred into reserves, several of which had been on the slide or were scheduled to be dipped into to shore up the 2022 budget.
A total of $1,225,000 will be added to the operating reserves that will be drawn from this year for staffing increases. That same allotment had been scheduled to be drawn from reserves whether or not a surplus was realized.
A total of $600,000 will be placed in the infrastructure gap capital reserve. That same amount had been removed from the 2022 budget by council.
To help cover the costs of a review of the Municipal Development Plan scheduled for 2023, $200,000 has been placed in the planning operating reserves.
A total of $105,000 will be put in the police operating reserve and is anticipated to be used for retroactive pay compensation resulting from the new collective bargain agreement reached between RCMP members and the federal government last fall.
A total of $300,000 will be placed in the human resources operating reserve to help implement recommendations for a compensation review this year.
The town's facilities capital reserve is in a $3 million deficit, and $791,842 of the surplus will be designated to that reserve.
The town had been on track for a $1.25 million surplus by the end of the third quarter.