City of Powell River councillors were given an overview of the city’s consolidated financial statements, outlining the 2022 financial specifics.
At a special council meeting on May 12, manager of financial services Ryan Youngman provided an analysis of the 2022 draft statements prior to councillors receiving audit results from the city’s auditor. Youngman said the statements had been prepared by management and were pending acceptance by city council.
“The city’s external auditor BDO Canada has scrutinized the city’s accounts, processes and financial statements and have substantially completed their audit,” said Youngman. “The big story of the 2022 financial statements is that the city invested a lot of money into the consolidated wastewater treatment plant.
“In 2022, the city spent $64.6 million, or 65 per cent of the total cost of the wastewater treatment plant. To put that into perspective, that represents 47 per cent of the value of the city’s capital assets at December 31, 2022. It’s a big investment.”
Youngman drew councillors’ attention to the consolidated statement of financial position, which, he said, was a snapshot of the city’s finances at a point in time, which is December 21, 2022, as compared to the prior year. He said it reports on the city’s financial assets, liabilities, non-financial assets and accumulated surplus.
“To finance construction of the wastewater treatment plant, cash and cash equivalents decreased $21.5 million, to $30.7 million,” said Youngman. “Portfolio investments decreased by $5 million to $17.5 million, and long-term debt increased by $4 million to $28.7 million because the city borrowed an additional $5 million. This was offset by annual principal paydowns on other debts.”
Youngman said accounts receivable increased by $5.7 million to $13.6 million, primarily due to an increase in grants receivable from federal and provincial governments for construction of the wastewater plant.
Accounts payable and accrued liabilities increased $4.4 million to $17.6 million, primarily due to holdbacks increasing to Graham Infrastructure for the construction of the plant. Deferred revenues decreased by $15.1 million to $82 million as work was being completed on the facility.
“The city’s net financial assets position decreased $13.6 million to $12 million as the city invested in its tangible capital assets,” said Youngman. “Tangible capital assets increased $63.2 million to $200.1 million, primarily due to the increase in assets under construction, which is almost entirely related to the construction of the wastewater treatment plant.”
Previous year comparison
Youngman then drew council’s attention to the consolidated statement of operations, comparing 2022 to the prior year. He said it reports on the city’s revenue, expenses, annual surplus and accumulated surplus.
“Property taxes came in pretty much as expected,” said Youngman. “Other revenue increased by $4.9 million to $7.4 million, primarily due to proceeds from timber harvesting on the airport lands, which is a project required to meet Transport Canada’s tree height regulations for the airport.”
The timber harvest revenue was $5.2 million and expenses were $2.1 million, leaving net proceeds of $3.1 million for the project. A big increase was government transfers, going up $28.7 million to $44.6 million, primarily due to federal and provincial grant revenue for the wastewater plant.
“Overall, revenue is up significantly to $90.3 million, primarily because of the increase to the government transfers,” said Youngman.
Expenses increased $5.6 million to $40.5 million and the city came in under budget by $1.9 million, said Youngman.
“Overall, the surplus has increased significantly to $49.8 million, which is higher because of the government transfers for the wastewater treatment plant,” said Youngman. “Of this surplus, $42 million was transferred to the investment and tangible capital assets accumulated surplus account, with the remaining $7 million transferred to surplus and reserves as for the reserve bylaws and reserve funds council policy.”
