Edmonton projecting $67.8M surplus, council considering 'Band-Aid' investments

Edmonton City Hall in a file photo

The City of Edmonton is projecting a small surplus this year of nearly $70 million, with council mulling how best to incorporate that money into a challenging budget cycle.

After better-than-expected cost-savings and higher interest returns on investments, the city says Edmonton is projected to end this fiscal year in the black with $67.8 million. That projection comes after administration received its third-quarter financial results.

The finalized amount will be known by the end of March once the city provides end-of-year financial statements. For budget deliberations over the next few weeks, councillors will have to decide what to do with around $42 million of the surplus that is available.

"In the grand scheme of things of a $3.2 billion budget, it's a bit of a drop in the bucket," said Coun. Keren Tang, who represents Ward Karhiio.

"It's a bit of a Band-Aid in the near term, and we need it because we are bleeding."

Mayor Amarjeet Sohi said on social media Thursday afternoon that he would prefer to invest the "benefits of our good fiscal management" to build more affordable housing, "take bold climate action," and expand the city's industrial tax base.

"I aim to tap into the city's smart use of funds to make sure your top priorities are funded," Sohi added.

The City will have a $67.8 M surplus this year. My goal will be to use the benefits of our good fiscal management to invest this surplus to build more affordable housing, take bold climate action, and to expand our industrial tax base. #YEG #YEGcc pic.twitter.com/pq3EsgOp5q

— Amarjeet Sohi (@AmarjeetSohiYEG) November 24, 2022

Many major initiatives like on-demand transit, the Touch the Water Promenade, Anthony Henday Drive interchange at 135 Street and improvements to snow clearing remain unfunded by the proposed municipal budget that is already calling for four years of 3.9 per cent property tax rate increases.

Tim Cartmell, Ward pihêsiwin councillor, says the city has to be prudent with how it spends the surplus to not add further operating costs to future year budgets where a surplus is not guaranteed.

"Interest rates went up, we gained more money because of it," Cartmell said. "But on the other side of the ledger, what we are going to talk about in the next three weeks are a number of projects, a number of initiatives that require more money to support.

"If we borrow more money, that money is more expensive, loan costs are going up. So there's a bit of a yin and a yang here, so I would not get too carried away."

His concern is that if the whole surplus is spent on a new capital project, that would require the city to borrow money and a further $5 to $6 million in debt servicing costs — which approximately amounts to a 0.3 per cent property tax.

"It might help with some of our choices, but it does not solve our problem over the next three weeks," Cartmell added.

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Tang said the province revealed a projected surplus of $12.3 billion, which could make more of an impact on helping Edmonton deal with homelessness.

"I don't know what amount of money is going to resolve our challenge because the need keeps rising," she said. "At the same time, there are some pieces that need some immediate solutions."