City surplus has less money to allocate than previously thought

When members of city council left a meeting on Apr. 25, some of them were pondering what to do with $147 million in uncommitted funds from last year's budget surplus.

But by the weekend, they found out that figure was much lower than they had originally anticipated. 

On Friday, administration sent an email to council members outlining that the $147 million surplus was actually $143 million.

The email also noted that council had boosted spending for this year by $38 million during last November's budget adjustments ⁠— bringing the grand total down to $105 million.

Several members of council were left confused by what happened.

"I was flummoxed," said Coun. Evan Spencer.

"Especially because we just spent the whole week using $147 million in the news and in the council chamber."

Clarity wanted

Spencer, who was first elected last October, said there has been plenty of discussion among his colleagues since they received the email on Friday.

"There's been lots of conversation. Plenty of text messages. Plenty of phone calls and it's been an ongoing conversation over the whole weekend so we're hoping for more clarity here."

Coun. Sonya Sharp said she's disappointed council wasn't informed with the correct figures before last week's special council meeting on the annual financial report.

She said council gets agenda documents ahead of its meetings and that the information presented at the special meeting lined up with the $147 million figure. 

When the details changed after the meeting, Sharp said it took several days to get to council members.

"If there was a memo for clarification, it should have come out within 24 hours of our council meeting, not five days later," said Sharp.

With planning underway for the upcoming four year budget plan, Sharp said the misunderstanding of the surplus is a concern. 

"We [went] from $147 to $143 [million], now we're saying we have $105 [million]. Council needs to understand where we're really at with the surplus and we need to understand that as we go into the next budget planning cycle."

CFO took questions

The city's chief financial officer, Carla Male, handled many of the questions from council about the 2021 financial results in that meeting.

She told council that it had $147 million in uncommitted funds to make decisions on.  

Her recommendation was that council should keep that cash in the city's fiscal stability reserve and make decisions about it during this November's budget debate.

But when the meeting ended, several councillors suggested they would bring forward motions at upcoming meetings on ways of spending that money before November.

Male said the numbers in the audited statements presented to council last week weren't actually finalized until several days after the meeting.

She was then told by her staff that council voted last November to spend $38 million from the 2021 surplus funds before that surplus had even fully landed. 

"We were confident that the funds would be available," said Male.

Public trust

Coun. Kourtney Penner said administration and council have a responsibility to communicate clearly with Calgarians and that she wants to see that improve.

"I think we could argue to a degree there has been hurt in the sense of public trust and public confidence in how we communicate."

Rather than focus on the surplus discrepancy, Penner said she'd rather look forward.

"How do we prevent this from happening in the future? How do we clearly communicate to Calgarians what is the fiscal position of the City, what opportunities that affords us and where different funds are flowing from?" said Penner.

Aside from any potential motions from councillors on how to use the remaining money in the surplus, council will discuss indicative property tax rates for the upcoming four year budget during its meeting on May 10. 

Once council approves those targets, administration will draft a budget plan that meets those numbers and council's strategic direction.