OLDS — The Town of Olds' 2024 budget will see a deficit of about $590,000, corporate services director Sheena Linderman predicts.
Linderman made that prediction as she gave her department’s fourth quarter update during town council’s Jan. 27 meeting.
The corporate services department is responsible for everything from financial management -- including budgets -- to utility billing and information technology.
Linderman predicted that revenue accruing to the Town of Olds will be about $470,000 less than budgeted and expenses are expected to be $120,000 over budget.
In an operating budget summary (excluding utilities) Linderman said $22.8 million in revenue has been “recognized,” which is 90 per cent of the amount of budgeted.
She said $22.3 million has been spent so far, about 88 per cent of the budgeted amount.
Linderman and chief administrative officer Brent Williams said a big factor in the projected dip in revenue is that the FortisAlberta franchise fee is anticipated to be about $390,000 less than budgeted.
Also, Olds Aquatic Centre revenues are projected to be $40,000 less than budgeted.
Another factor is that grant-funded projects were not “totally expended” last year, according to Linderman’s report.
Coun. Wanda Blatz wondered if the loss of SNDL (formerly known as Sundial Growers, a marijuana processing facility) was a factor in the lower franchise revenue. SNDL announced in the fall of 2023 that it was closing its Olds facility.
“Correct,” Linderman said.
Williams said the precise amount of money that FortisAlberta or ATCO collect in franchise fees from certain houses or industries is confidential.
“We don’t get a direct report,” he said.
Williams said town officials are projecting the loss of SNDL alone will account for about $250,000 in franchise fees, “so quite a substantial hit.”
Expenses are projected to be approximately $120,000 over budget. Items contributing to this are higher than anticipated utility costs at both the Olds Aquatic Centre and the Olds Sportsplex as well as streetlights. Sidewalk repairs were also more expensive than anticipated.
Linderman listed several reasons for expenses being over budget.
Utility costs ended up being $237,000 more than budgeted and administration building costs totalled $178,000.
Repairs and maintenance costs were $327,000 over budget.
Linderman said while the increase in repairs and maintenance “may sound alarming,” other factors offset that.
For example, contracted services came in $512,000 under budget. Also, goods and supplies were $74,000 under budget.
Coun. Darren Wilson said the projected deficit is nearly $600,000.
“What are the implications for that,” he asked. “The money tree for that is located where? Or how do we handle that?”
Linderman said typically what happens in cases like this is that, with council’s approval, planned transfers to reserves wouldn’t occur and money would be transferred from reserves to cover the deficit.
“We do transfer approximately $480,000 every year of amortization to reserves, so that would be the first thing that wouldn’t happen,” she said.
