According to the financial audit report for 2023, the City of Fredericton continues with its strong record of financial responsibility. This reflects prudent fiscal practices to mitigate risk, the success of long-term planning and the effectiveness of the Mayor and Council's responsible governance.
Highlights of 2023 include a continued reduction of long-term debt, sustained investment in municipal infrastructure, significant investment from other levels of government, fully funded vacation and overtime liability, and leveraging cash to earn interest.
The City's combined revenue in 2023 totalled $203.8 million. The bulk of the new revenue can be attributed to increased third-party contributions largely related to infrastructure funding, the inclusion of new properties contributing to the City tax base from Local Governance Reform, increased revenue from property taxes due to significant new construction and increases to existing property values, as well as high return on investments due to interest rates.
The City's expenses also increased by 17.5% overall compared to 2022. This increase can primarily be attributed to salary and fuel costs. Overall, there is a net cash surplus of $3.2 million for the year, including a $769 thousand Water & Sewer fund surplus, which will be included in the 2025 budget to invest in much-needed infrastructure.
“I’m pleased to see the City end the year with a small surplus primarily attributed to third-party funding. This will help us continue to invest in infrastructure in the coming years and realize our goals for the city,” said Councillor Henri Mallet, Chair of the City’s Municipal Finance & Corporate Administration Committee.
The City plans to continue mitigating financial risks like inflation, extreme weather, volatile fuel costs, and increasing infrastructure renewal costs with long-term planning and sustainable funding, operational strategies that consider efficiency and effects like climate change, and results-based management that focus on achieving results that matter most to the community.
The 2023 City of Fredericton Audited Financial Report was presented and formally adopted by City Council on April 8, 2024. A clean audit opinion was provided by City-appointed auditors EY.
Audit Highlights:
- Expenditures by Programs Results areas for 2023:
- Public Safety - $55.3M
- Mobility - $35.9M
- Livable Community - $25.8M
- Waste & Wastewater - $18.4M
- Economic Vitality - $12.4M
- Environmental Stewardship - $6.7M
- Governance & Civic Engagement - $6.2M
- Sustainable Infrastructure $2.7M
- Corporate Services - $2.5 M
- In 2023, third-party contributions to the City for core infrastructure, local improvements, housing projects and other funding initiatives totalled $23.2M.
- The City of Fredericton has steadily decreased its net debt over the years. It has set a debt ceiling of 8%, which means that no more than 8% of revenues can be used for debt payments each year. In 2023, the City’s debt servicing costs to revenue were 2.3%.
- The long-term financial goal is to replace infrastructure as it reaches the end of its usable life, with money already in the budget, and not to borrow money or go back to the taxpayer for a tax increase.
- The total replacement value of the City’s infrastructure is $2.134 Billion.
- The Audited Financial Statements include all the City’s Consolidated Funds and Entities, including General Fund, Water & Sewer Utility, Land Funds, etc. Subsidiary entities like e-Novations Comnet, Inc., Newmarket Properties Inc. (Fredericton Boyce Farmers Market), and Fredericton Convention Centre.
- The City’s financial reporting is based on Public Sector Accounting Standards, which aim to provide a complete picture of everything the City is responsible for.
- Municipalities are mandated to operate with a balanced budget. Any surplus must be spent in the next available budget cycle. In this case, that is 2025.