Ponoka’s finances receive clean audit for 2011

Every year municipalities must go through a financial audit to ensure taxpayers’ money is managed correctly ...

  • May. 23, 2012 6:00 a.m.

Every year municipalities must go through a financial audit to ensure taxpayers’ money is managed correctly and Betty Quinlan, director of corporate services wants to hear one thing, “a clean audit opinion.”

“If there’s weak internal controls then they’ll have to give you a qualified opinion,” she explained.

It is Quinlan’s job to safeguard the assets for Ponoka and receiving a clean audit opinion means she is doing it correctly. “If they give you a qualified opinion that means there is something big enough wrong that you have to fix it.”

Ponoka received its audited 2011 financial statements from Rowland, Parker and Associates accountants recently and the company gave the town the expected clean opinion. The statements include various details from revenues, grants, money owed, councillors’ pay, and debt owed. Land for resale inventory went down to $2.29 million from $2.57 million, the drop came from land the town had developed, which was sold in 2011.

“That is land the town owns that is for resale purposes. That includes the southwest industrial and Hudson Green (Activity Centre),” she explained.

Ponoka’s long-term debt has also dropped to $7.6 million from $8.4 million, mainly because payments went to the principal. Sometimes municipalities take a project where it does not have enough capital funds to complete, which can include local improvements. “We pay principal and interest, but that’s just the reduction in the principal.”

With $35,660 into development levies compared to $141,008 in 2010, Quinlan said she does not budget for levies as they fluctuate from year to year.

Ponoka County also contributes to the town’s revenue through a government transfer as county residents also make use of the recreation buildings “for operating of the aquaplex, and the (culture and recreation) complex, the cemetery, and for recreational type activities.”

The transfers total more than $1 million, $196,688 from Ponoka County; the rest comes from the province, which includes funding for Family and Community Support Services and for the RCMP. “We get about $350,000 for police.”

Legislative expenses, which pay for council honorariums and expenses such as travel, was $161,366, down from $172,037 in 2010; budgeted was $143,206 but Quinlan said there were some submissions that had not been Ponoka’s finances receive clean audit for 2011 made by councillors. “It was just timing of receipts.”

Department heads for Ponoka input their budget numbers for the next year in August in an effort to prepare next year’s budget. Quinlan said they take into account the previous year and forecast the current year, which sometimes leads to some areas being over, or under.

Two examples are waste management, and wastewater treatment and disposal; the first was higher than anticipated fees to hauling from the town dumpsite at an expense of $675,909, budgeted was $618,204. For the second, Ponoka budgeted to spend $425,089 but was over by $69,477. Some of that was the fine Ponoka had to pay for contaminated effluent being released in the Battle River.

“That was the first installment on our fine,” Quinlan said.

Ponoka’s debt limits have increased to $23 million from $20 million in 2010, but its total debt has decreased to $4.6 million from $5 million. The Municipal Government Act calculates debt limits at 1.5 times the gross revenue of a municipality and the debt services limit at one-quarter of that revenue.

“You can’t have more than 25 per cent payments going to pay off your debt,” explained Quinlan.

Typically, municipalities have a tendency to stay below 50 per cent of their debt limits as revenues can change over the course of a year.

“If we were to go borrow $18 million, we would have to come up with $3.2 million of extra funding to pay for those taxes for 20 years. That’s a lot,” she stated.

Taxes would have to be increased to accommodate debt servicing. “You have to be careful with your debt load and use it judiciously, use it for things that are long term.”

Ponoka’s debt servicing for 2011 was $658,149 with a limit of $3.87 million.

Mayor Larry Henkelman and councillors also receive an honorarium for the work they do for the Town of Ponoka. Quinlan compares what other towns pay their councillors to ensure fair payment for the work. It also includes councillors’ pay for 2010 as there was an election and new councillors were voted in.

“Basically this is their salaries, their per diems that they receive,” said Quinlan.

• Mayor Larry Henkelman: paid $27,448 in 2011 and $32,088 in 2010.

• Coun. Marg Barr: paid $13,209 in 2010.

• Coun. Drew Dougherty: paid $13,762 in 2010.

• Coun. Doug Gill: paid $20,001 in 2011 and $18,590 in 2010.

• Coun. John Jacobs: paid $16,234 including $351 in benefits in 2011 and $17,831 in 2010.

• Coun. Jerry Siemens: paid $14,533 in 2010.

• Coun. Jack Surbey: paid $25,596 in 2010.

• Coun. Rick Bonnett: paid $15,340 including $322 in benefits in 2011 and $3,353 in 2010.

• Coun. Loanna Gulka: paid $16,330 including $354 in benefits in 2011 and $4,541 in 2010.

• Coun. Beva Hamilton: paid $9,468 including $173 in benefits in 2011 and $3,080 in 2010.

• Coun. Izak van der Westhuizen: paid $16,273 including $352 in benefits in 2011 and $3,074 in 2010.

• CAO Brad Watson: paid $144,006 including $22,654 in benefits in 2011 and $141,841 in 2010.

Ponoka’s accumulated surplus was $48.7 million, up from $46.5 million for 2010. Accumulated surplus includes assets that municipalities are required to account, but are not necessarily able to sell, such as bridges, culverts, and roads.

Total revenue was $13.2 million for 2011, down from $13.4 million in 2010, and expenses were $13.3 million, down from $13.4 million in 2010. About a $45,000 difference between revenue and expenses.

Ponoka has also received $41,634 in a category called “other,” mainly small revenue sources that don’t fit into anything else in the budget, such as a UFA dividend.

Quinlan said the budgeting process will begin in August with all departments planning for 2013.

By Jeffrey Heyden-Kaye

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