October 31st, 2020

City has $82 million in reserves in 14 funds


By Kalinowski, Tim on November 22, 2019.

City treasurer Hailey Pinksen gives and overview on City of Lethbridge reserves during the Community Issues Committee meeting this week at city hall. Herald photo by Ian Martens @IMartensHerald

Tim Kalinowski

Lethbridge Herald

tkalinowski@lethbridgeherald.com

The City of Lethbridge has about $82 million in reserves spread out over 14 different funds. While on the small side compared to other jurisdictions across the province, city treasurer Haley Pinksen told council during this week’s Community Issues Committee meeting that she felt those reserves were adequate as they stand, albeit with room to improve upon if council so desired.

However, Pinksen also told councillors certain reserve funds may have outlasted their original purpose and should possibly be reconsidered and consolidated. She pointed to the Mayor Magrath Drive Beautification Reserve as a good example of this. It was established in 1984, and its original purpose is no longer clear. It holds $100,000 which does not get tapped for such beautification projects anymore.

The Municipal Revenue Stabilization Fund by comparison is tapped quite often, and at $28.7 million is the City’s largest reserve. Pinksen said the fund, while lacking a singular scope or purpose, acts as a useful catch-all to help “stabilize the effects of fluctuating revenue and expenditures.” Which, she admitted, could refer to a whole variety of things, and often does in practice.

It’s all a bit confusing, admitted Coun. Jeffery Coffman, as to how such reserves are established in the first place and what operating principles they are disbursed under thereafter. Coffman proposed to bring forth a motion to direct City staff to undertake a review of the usefulness and purpose of each of the existing reserve funds at Monday’s city council meeting, and to report back to council at a future date with their recommendations.

“The purposes can be a little loosey goosey,” said Coffman. “There is not necessarily policies behind them. It’s not that funds are not being allocated as prescribed, I would just like council to have greater control over these reserves in terms of how they are created and why they are created. The big takeaway (from city treasurer’s CIC report) for me is we do need to have greater insight. We do need to be reviewing them on a regular basis. I would propose once a term. The purpose of reserves are definitely going to change as economic or community conditions require, and we need to address it that way.”

Coffman felt such a review was particularly important given the economic uncertainties and provincial budget pressures the City could be facing in the years to come.

“We are in fairly decent financial stead relative to other municipalities across the province, but like any aspect of your financial holdings you have to maintain it, you have to keep an eye on it, and you have to be sure it is being allocated and handled appropriately as required,” he said.

“We all have this concept of a rainy-day fund, but it does rain,” added Coffman. “We have to realize that reserve funding does get drawn upon in order to make up for the shortfalls.”

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Citi Zen

This is absurd. Gross mismanagement of taxpayer’s money, then they have the gall to increase our taxes again every year. Time for an external audit. Let’s bring Lethbridge taxes into line with other municipalities in Alberta.