The town’s independent auditors, Adams Wooley, presented the
2013 draft audited financial statements at the regular open council meeting on
April 29th.
Lower long-term debt combined with higher reserve funds
resulted in a much improved net debt position. The town’s net debt at the year
ended December 31 was $100,942 compared with a net debt of $721,372 in 2012 and
$1.448 million in 2011.
The long-term debt at the year ended December 31, declined
from $3.515 million in 2012 to $3.262 million in 2013. Reserve funds in 2013
were reported to be up to $3.130 million at year end 2013, an increase of 16%
over last year.
Still of concern is the annual deficit; on an annual basis
expenses are greater than revenues.
Revenues for 2013 were reported as $8.738 million compared
with $8.645 million in 2012. Revenue in these financial statements includes
senior government grants, both conditional and unconditional.
Conditional grants usually provide funds for one-off capital
projects like the Resort Municipal Initiative grants and vary from year to
year, making the comparison of revenue from year to year not very meaningful.
In 2013 Golden received conditional grants of $594,448 compared with $598,185
received in 2012 and $2.783 million in 2011.
Conditional grants cannot be used to pay for operating
expenses. Including them in revenue overstates the revenue available to pay
operating expenses, distorting the true financial picture.
Excluding
conditional grants, revenue from all sources including property taxes, and
water and sewer fees in 2013 was $8.143 million a slight increase of 1.2% over
$8.047 million collected in 2012.
The reported deficit for 2013 was $308,020 compared to a
deficit of $500,517 reported in 2012. If conditional grants were excluded from
revenues, the annual deficit for 2013 would be $902,468 compared with $1.1
million last year.
Total operating expenses for 2013 at $9.046 million were
slightly lower than those reported in 2012 at $9.146 million. This reduction in
general government expense reflects the elimination of senior management
positions part way through 2013.
Operating expenses remain too high in relation to revenues
and will limit the amount of money available for future capital projects,
maintenance and upgrades to the town’s infrastructure (water, sewer, roads and
buildings).
In 2013, only $1.703 million was expended on capital
infrastructure, well below the amount required to maintain the tangible capital
assets (town’s infrastructure). Money that should be going to support
infrastructure is being used to fund operating expenses.
To attain financial sustainability, the annual deficit must
be eliminated. To achieve this expenses must be reduced by $902,468 and the
money added to the capital budget or reserve funds to maintain the town’s
infrastructure.
The opinions expressed in this blog are my personal opinions
and may not represent the opinions of other councillors nor the opinion of
council.
