The City of Castlegar has released its audited financial reports for 2020 with independent auditor Grant Thorton giving the city a clean audit for the year.
Revenue
The COVID-19 pandemic affected the city’s finances significantly resulting $1.34 million revenue loss compared to the previous year.
Most of that loss came from the West Kootenay Regional Airport, with revenue $905,370 lower than budgeted.
The city also saw lower investment income revenue due to low interest rates, reduced property tax penalties and interest revenue lost from the city’s decision to defer the 2020 property tax due date. There were also revenue losses due to the pandemic closure of the gaming centre.
However, some of those losses were recovered through the provincial COVID-19 Safe Restart Grant which gave the city $2.18 million, although just $1.09 million was incorprated into the 2020 budget.
Revenues in the water and sewer fund were $214,000 above budgeted levels.
General fund revenues, which include all other city services, were about $60,000 above budget, primarily from building permit revenue which remained strong in spite of the pandemic.
Towards the beginning of the pandemic, city council made the decision to cut the 2020 operating budget by $364,000 to prepare for possible revenue losses.
Savings
City staff was also directed to review the budget for additional savings. City departments tightened their budgets and found reductions in operating expenses of an additional $555,000.
“This one-time savings shows the city’s continued commitment to reducing costs during the global pandemic,” said the city’s chief financial officer Ola Oladele in his report to city council.
The savings became part of the 2020 accumulated surplus.
Debt
The city uses debt to finance new infrastructure and major repairs. It also utilizes financing agreements for mobile equipment.
In 2020, debt increased by $2.12 million due to long-term borrowing for a fire truck and Orchard Avenue Phase 1, plus short-term financing for a new command vehicle and two pickup trucks.
Reserves
At the end of 2020, the city had $13.6 million in reserves — an increase of $4.4 million from 2019.
A large portion of the increase came from the unspent portion of the COVID-19 Safe Restart Grant and revenue from the sale of airport lands and transfers from the city’s utility funds.
Oladele says he is pleased with the city’s level of reserves.
“It is healthy, it allows us the flexibility to make decisions in the future without having to increase our taxation which is always a good thing to see.”
READ MORE: West Kootenay Regional Airport gets $720,000 in provincial funding
betsy.kline@castlegarnews.com
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