City of Kingston records $3.9M budget surplus, will direct extra funds to reserve accounts

The City of Kingston posted a tidy $3.9-million budget surplus last year, but don’t expect any tax rebate cheques in the mail.

The city has a long-standing policy to tuck away any operating budget surpluses into its reserve accounts for future capital needs and unforeseen expenses.

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“The surplus from general municipal operations of approximately $3.9 million represents less than one percent of the total operating budget,” according to city treasurer Desiree Kennedy.

Tweet This Click to share quote on Twitter: "The surplus from general municipal operations of approximately $3.9 million represents less than one percent of the total operating budget," according to city treasurer Desiree Kennedy.

The latest financial numbers show that the 2018 operating budget of $378 million was left with a surplus partly because of staff vacancies, lower discretionary spending and higher-than-expected revenues in engineering services, cultural services and Kingston Fire and Rescue as well as additional gas tax receipts in transit.

City finance officials say the engineering department recorded a $177,000 surplus due to higher revenues and savings from the switch to LED street lighting.

The parking division, responsible for handing out parking tickets, generated a $672,000 surplus due to more fines being issued and also staff vacancies.

Kingston Transit also recorded a $286,000 surplus due to additional provincial gas tax subsidies.

The community services department — which oversees social services, Ontario Works, the Rideaucrest seniors’ home, planning, building and licensing, cultural services, local rinks and the Leon’s Centre — racked up a surplus of $1.9 million on a net budget of $40.7 million.

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Kingston’s flagship arena finished 2018 with a $655,000 profit, about $60,000 higher than expected. That figure is based on revenues of $2.8 million and operating costs of $2.2 million at the Leon’s Centre.

Even though the city-owned but privately managed venue hosted only 34 concerts, family shows, trade shows, conventions and other events — far fewer than the 61 events it expected — revenues were on track due to the Kingston Frontenacs’ playoff run last spring, more ice rentals and lower costs to run the sports and entertainment centre. Over 216,000 people passed through the turnstiles last year, about 11,000 fewer than expected.

Of all the municipal rinks that require tax subsidies, only the Memorial Centre exceeded its revenue targets with $435,000 compared to the budgeted goal of $425,000.

The fire department’s year-end surplus of $521,000 is based on higher revenues, reduced contracting services and lower staffing costs.

While tax spending was lower in some municipal departments, other departments went over budget.

The city’s fleet of municipal vehicles guzzled $500,000 in extra fuel.

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The cost of winter control also took a toll on the budget.

The public works department had a $1.2-million deficit in 2018. Of that, an extra $830,000 was spent on winter materials such as salt, sand and contracted services. The remaining $289,000 deficit stemmed from higher costs to maintain local parks.

The city’s blue box program also took a financial hit last year as revenues from the sale of recyclables were down by about $200,000.

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“Throughout 2018, we continued to see a weakening in the markets for recyclables, which put pressure on projected revenues from the sale of these materials,” Kennedy’s year-end report to council on June 4 said.

Kennedy says the net result is a $3.9-million surplus in the municipal coffers.

Staff asked council to direct almost all of the surplus into four reserve accounts: workplace safety and insurance, transit, library and a working fund reserve.

The lion’s share of the surplus will be put into the working fund reserve account, which is used to cover one-time or unforeseen expenses and to help cover any costs related to council motions.

City officials say that extra money could also come in handy due to ongoing uncertainty over the impact of provincial funding cuts to municipalities.

That wasn’t the only good financial news to reach council.

Utilities Kingston took in $5 million more than it spent last year for water, sewage treatment and natural gas distribution services.

But rather than offer rate rebates for customers, the surplus will be placed into capital reserve accounts for utility upgrades in the future.

The city-owned public utility lists a combination of higher-than-budgeted revenues and lower-than-expected spending for the net surplus.

For example, a colder-than-expected winter meant homeowners turned up the heat more often, resulting in extra gas distribution revenues, according to the city’s financial report.