City Receives Good Financial Report

2016 Financial Audit shows despite fiscal challenges, City sticking to long-term plan, policies and strategies.

According to 2016 Audited Financial Statements conducted by Ernst & Young Chartered Accountants, the City of Fredericton received a clean audit opinion showing good financial results.  The annual financial audit is a key component of public accountability and transparency, and the clean audit opinion demonstrates responsible governance.

Despite fiscal pressures from rising labour costs, and slowing revenue growth, the City adhered to its long-term financial plans, fiscal policies, and management strategies and paid down $3.7 million in long-term debt, invested $34 million in infrastructure, and followed a balanced budget plan, ending the year with a small surplus.

The City’s General Operating Fund ended the year with a surplus from operations of $3.3 million, or 2.8% of total revenue.  This surplus is the result of a combination of factors that will enable the City to address financial pressures in the next two years.  The Water & Sewer Utility Fund ended with a surplus of $2.1 million resulting from deferred capital projects.   These funds will be used to continue projects to replace aging water & sewer pipes. 

Other factors contributing to the 2016 year-end budget surpluses were early tendering of construction projects resulting in savings of approximately $1.6 million, and an increased focus on Federal and Provincial infrastructure funding resulting in $5.8 million in funding for 2016 projects.

Getting to a balanced budget plan for 2016 was challenging.  Salaries, which account for 53% of the budget, rose with inflation, while increases in property taxes from market assessments were below inflation at an average of only 0.76%.  Heading into the 2016 budget, the City had forecasted a budgetary shortfall of just over half a million dollars.  Despite these challenges, the City was able to find efficiencies and craft a balanced budget for 2016 without cutting services or increasing the tax rate, which has remained unchanged since it was reduced in 2011.

Since 2012, the City has realized total cumulative annual efficiency savings of $7.69 million from continued improvement and innovation projects and workforce reduction strategies.  These recurring savings from efficiencies are equivalent to 11¢ savings on the tax rate of $1.42.

“This is an important part of our report card every year,” said Coun. Greg Ericson, Chair of the City’s Finance & Administration Committee.  “It’s reassuring to receive a finance report card with good marks.  The City’s financial outcomes support its long-term service delivery and quality goals.”

The City is guided in its work by long-term strategic plans including the Municipal Plan, Long-term Financial Plan(s), the City Centre Plan, and other strategic plans with long-term priorities.  The City provides daily management of these plans, executing through visual management boards, key performance indicators, priority based budgets, annual CAO goals, and a Mayor and Council focused on setting priorities and monitoring results.

“The City’s long-term planning and the actions we’ve taken on them are attracting attention and receiving national recognition,” added Coun. Ericson.

These 2016 milestones and awards achieved include:

  • Fredericton achieved part of its Vision 2020 plan for economic development by receiving Startup Canada’s Startup Community of the Year award.
  • The Fredericton City Centre Plan was recognized by the Canadian Institute of Planners with the Award for Planning Excellence. 
  • The City was one of twelve municipalities invited to join the Leadership in Assets Management Program by the Canadian Federation of Municipalities, in part for its execution on the Long-term Financial Plan(s).
  • The inaugural Canadian Public Sector Lean Summit developed and hosted by the City of Fredericton was sold out at the Fredericton Convention Centre.
  • The 2016 audit and financial results were presented to the City’s Finance & Administration Committee on March 27, 2017. The audit was conducted by Ernst & Young Chartered Accountants in accordance with Public Sector Accounting Board (PSAB) standards set for governments by the Chartered Professional Accountants of Canada, which takes into account everything the municipality is responsible for.

The audit includes the City of Fredericton General Fund and Water & Sewer Fund, as well as City-owned entities like e-Novations, the Fredericton Convention Centre, and Newmarket Properties.

The City received a clean audit opinion.