• Thu. Mar 28th, 2024

City moves COVID-19 cash to savings

The City of St. Albert recently moved $5.1 million previously set aside for COVID-19 relief purposes back to a city reserve, signalling an end to the city’s financial response to the pandemic.

The City of St. Albert signalled the end of its financial response to the COVID-19 pandemic by transferring $5.1 million set aside for relief purposes back into the city savings account.

The $5.1 million in unspent pandemic relief funding stems partly from the city’s 2020 operating surplus of $10.3 million, and partly from previous council motions setting aside funds for the city’s Chief Administrative Officer to use as needed for COVID-19-related expenditures, city spokesperson Danelle Boivin said in an email. 

“(Some) $3.9 million of the relief (was) related to the 2020 year-end surplus which arose due to a grant received from the Province of Alberta.” 

Boivin said the city received about $7.6 million in total from the provincial grant, which was through the Municipal Operating Support Transfer (MOST) program.

“The grant was used to fund the additional costs and lost revenue (and) the city recognized a surplus (in 2020),” Boivin said. 

Of the surplus some $7.9 million was earmarked to offset future tax increases. Two million dollars was used in 2021 and $1.98 million in 2022 to offset tax increases.

In a Feb. 14 special city council meeting, council voted unanimously to split the 2022 operating surplus of about $2.3 million evenly between two reserves, council heard the uncommitted balance of the stabilization reserve had risen to $9.7 million, after starting 2022 with just $720,340. 

According to a council backgrounder prepared by city finance manager Brenda Barclay, the stabilization reserve’s balance grew significantly in 2022 from receiving the 2021 operating surplus of $3.9 million last February, and because the city returned $5.1 million in unspent COVID-19 relief funding to the reserve after council voted last December not to use one-time funds to offset the 2023 tax increase. 

Boivin said the provincial government’s decision to remove pandemic health measures in the first half of last year, and council’s decision not to use one-time funds to offset the 2023 tax increase, helped administration determine pandemic relief funds could be returned to the stabilization reserve.

When the 2023 budget was proposed by city administration last fall, it originally included a one-time use of $1.4 million to offset the looming property tax increase; however, a successful motion put forward by Coun. Sheena Hughes during December’s budget deliberations removed the offset.

“If we were to use one-time funding it would simply be a one-time relief, but that same amount would be an increase on the taxes the following year,” Hughes said.

“What we have is ongoing expenses, and if you try to just pay for it with a one-time lump sum, those expenses are still going to come the following year, so … all we would do is kick the can down the road by a few months.”

When asked why council hadn’t considered using some or all of the $5.1 million in pandemic relief funding on community-based social programs or organizations such as the St. Albert Food Bank, which saw a 40 per cent increase in demand in 2022, Hughes said one of council’s concerns is the city wouldn’t be able to provide lump-sum funding on an ongoing basis.

“One of the major concerns [is] we want to make sure that whatever money we’re providing is ongoing,” she said. 

Likewise, Coun. Mike Killick said council knows organizations like the food bank need additional funding because of rising demand through the pandemic, but the city has been working on more permanent solutions. 

“That’s going to be addressed when we look at additional funding being developed from increasing our population growth numbers all the time,” Killick said. 

Last month council passed a motion directing administration to annually increase funding for all per-capita based programs through population growth estimates and latest available census data.

Council is also looking to update the funding formula for the city’s Outside Agencies Grant program, which provides an annual grant to eligible non-profits to help offset operating costs. Currently, the city determines funding for the program by multiplying the latest population figure by nine dollars. 

Last month, council directed administration to deliver a revised funding formula for consideration before the end of June. The motion states the revised funding formula will account for inflation and widen the eligibility parameters. 

As the $5.1 million in unspent COVID-19 relief is now available for use in the stabilization reserve, only council has the authority to determine how it’s spent moving forward.

Coun. Ken MacKay said the stabilization reserve is used for many different types of projects and for council to address urgent or unplanned expenses. 

“I’m pleased that we have this much available and that we can actually put it back into reserves,” MacKay said. 

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