WESTLOCK – The Town of Westlock is moving $485,700 to its building reserve fund, surplus dollars found after less was spent in 2021 on materials, goods and supplies at facilities like the Rotary Spirit Centre and Aquatic Centre due to the pandemic.
At their March 14 meeting, councillors voted 6-0 (mayor Ralph Leriger was absent) to amend last year’s operating budget, upping the contribution to the building reserve almost 25-fold, $21,750 to $507,450, and increasing the budget for amortization from $2,802,930 to $2,928,538. With the additional $485,700, the building reserve, which funds things like replacing the hot water tanks at the pool, now sits at $630,560
Finance director Julia Seppola told councillors that revising the previous year’s operating budget is an annual exercise, although she's usually asking for “small amounts of money to top up capital projects.” In the case of 2021, Seppola said that “all of the projects came in under budget” while expenses were down as the pool and RSC were closed sporadically or operated on reduced hours due to the pandemic.
“The ice plant pulls a lot of energy so we saved quite a lot of money on that when we shut it down early. And there were some materials, goods and supplies that weren’t purchased because either we couldn’t get them or there was no one around to install them,” said Seppola, whose request for decision to council notes that the 2022 and 2023 operating budgets identify $90,800 in projects that’ll be funded via the building reserve.
Ultimately the increased transfer will be “well utilized” as Seppola said they normally try to bank $60,000, but haven’t met that bar of late.
“That amount has been reduced over the years because of inflation and zero per cent tax increases. So, we’ve been saving less over the years and this is a needed top up. I picked the building reserve because it’s been the most impacted and it covers some of the most major infrastructure we have, like the Spirit Centre and Aquatic Centre,” she said.
Seppola said the question of how much to save has been debated many times over the years, while councillors noted saving for a rainy day is a never-ending process.
“This seems to be a reasonable way to build the fund up. We’ll never have enough money to do it all, but if we’re strategic, which we’ve been trying to do and focus on the needed priorities we won’t get those big, ugly surprises,” said Coun. Curtis Snell.
Coun. Murtaza Jamaly noted a recent conversation between himself, Leriger and CAO Simone Wiley on the fact that the pool is now more than 25 years old and at some point they will have to begin socking away money to replace it.
“Even though this is a significant increase to what we’ve put in in previous years, the savings came from buildings. This is the natural place for the dollars to go. Even if it was $1 million it wouldn’t be enough,” said Jamaly. “It’s interesting that the Spirit Centre is 10 years into its life so we have 10 to 15 years before we have to start saving for the next Spirit Centre and the cycle just continues.”
As for the other change to the budget, Seppola explained that amortization is a non-cash item that marks the use of fixed assets and their expense during a single year of their life — no funding needs to be identified as amortization does not affect cash or cash flows to the operating budget.
She said the original 2021 estimate was not sufficient because there were projects that were completed early, namely the West Industrial Storm Pond and the 108th Street rehabilitation project which, although not entirely finished, has been partially paved and is in use which is “ … the marker for when I stop calling it construction project and start amortizing it.”
