Meaford councillors were presented with the audited financial statements for 2017, and according to Traci Smith of BDO, the municipality is in the best shape it has been in years.
At their May 28 meeting council was told that 2017 saw another operating surplus, increased cash in reserve funds, reduced debt, and for the first time in a number of years the municipality has net financial assets.
“The municipality did have an operating surplus for the year of $332,910 combined with a surplus from last year of $420,000, so the total accumulated surplus is $753,119,” Smith told council. “It's very exciting for me to say this year you actually have net financial assets. You are no longer in a debt position. This is a very important financial indicator. It's positive, so now that means you have more assets than you have liabilities. You still have external debt, but you are no longer in an overall debt position, so that's a great financial indicator to see that becoming positive.”
According to the statements provided to council, at the end of 2017 the municipality had $12.5 million in cash and investments, up significantly from five years prior when cash and investments totalled just $6.9 million. In the same period of time reserve funds increased from $6.3 million to $11.2 million, and long term debt decreased from $9.9 million in 2013 to $6.5 million at the end of 2017. As a result, while Meaford had net financial assets of -$5.9 million in 2013, that indicator is now in the positive at $832,468.
While the statements contained positive news, Smith cautioned that municipal infrastructure assets are aging and will need significant funding in the years to come.
“Overall the municipality had another strong year financially. You're in a positive financial asset position for the first time in a number of years; so you've paid down debt and have put money aside in reserves. However, if you do take a significant amount from your reserves in the future, then you could be in a net debt position again,” Smith noted.
Meaford Treasurer Darcy Chapman was pleased with the audit report.
“Generally I think the statements are great,” Chapman told The Independent. “We are in a good position to weather any storm with healthy reserves. We've finally got to a stable point where we are spending more on capital than the annual amortization. In the same regard, we need to continue investment in our assets as amortization is based on historical cost not current or future cost, so there is still an infrastructure funding gap although far better than it was 5-10 years ago.”
While the news was positive, Chapman said there is still room for improvement.
“Certainly having a substantial surplus is not something we strive for, and although the surplus was explainable and based mostly on one time savings or extra revenues that could not be predicted during budget preparation, ensuring the budget reflects the actuals at year end is always something we will strive for or at least ensure we are ± 2.5%,” said Chapman.
Meaford Mayor Barb Clumpus was also pleased with the news contained in the audit reports.
“It's a lot of information, but it really is a good story to tell,” said Clumpus.