The acting Chief Financial Officer of the city of Prince Rupert has outlined his plans for the city’s accounting reserves, which if all goes according to plan should give the city a bit more breathing room when times get tougher.
Squirreling away money here and there will apparently help us out in the long run.
The Daily News had the financial blue print for us in its Wednesday edition.
CITY FINALLY GETS FINANCE NEWS IT CAN CHEER ABOUT
The Daily News
Wednesday, August 16, 2006
Prince Rupert councilors happily endorsed a report Monday night at city council, where the Acting Chief Financial Officer outlined various accounting reserves that will help the city’s finances in the future.
Coun. Ken Cote summed up everyone’s feeling on the subject, when he said: “I’m just ecstatic that we’re actually talking about being able to use reserves. I’m very happy about that.”
Acting Chief Financial Officer Jim Bruce outlined to council how the accounting reserves will work.
“The reason behind hits … you don’t have to raise your tax-base to cover an influx, “he said.
“There’s much more flexibility.
“If you have a shortfall, you can access the reserve to cover it.”
Funding the reserves will be done from operating surpluses, he said.
Those accounting reserves include: Election Reserve, Employment Cost Reserve, Snow Removal Reserve, Assessment Appeal Reserve, Insurance Reserve, Computer Equipment Reserve and the Rushbrook Floats Development Reserve.
These accounting reserves, in the future, will give the city more options to cover unexpected shortfalls, as opposed to trying to access the statutory reserve, which in past yeas the only reserve available, said Bruce.
“You would have to have a bylaw in place to get that money back,” he said.
“The requirements for spending that reserve are much more difficult.”
Coun. Joy Thorkelson agreed that having the reserves in place makes sense, but she inquired about the process council must go through to access those reserves.
“I sort of have an accounting reserve in my own personal life,” she said. “Like if something happens, I can move money from my holiday’s reserve, and there’s no penalty.
“But is there a penalty to pay if we had something terrible happen to our income?
“I can see the upside; we’ve got money squirreled away when it’s there, but the downside … what if we didn’t have enough money to cover?”
Coun. Tony Briglio also pointed out that a $60,000 commitment has been made by the city for when Prince Rupert hosts the Northern B. C. Winter Games in 2010, and he wondered if a special accounting reserve should be set up for that fund.
“I would like to see an accounting reserve include that,” he said.
Bruce agreed that setting up that reserve was a good idea.
“It would be in the best interest of council to set it up as an accounting reserve,” he said. “It will be there, and council will be able to see it.”
Briglio added: “Council has delivered what may be needed to be used by a different council in the future.”