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City’s finances gradually improving

The current term for Estevan city council has been a roller coaster ride at times.

The current term for Estevan city council has been a roller coaster ride at times.

It’s no different than any other council in any other community – you’re going to have great times, excellent decisions, mistakes and decisions that will divide the community.

But when it comes to the handling of the city’s finances, which is one of council’s most important duties, council has actually done a pretty respectable job.

The audited financial statements for the city were released at Monday night’s council meeting. They continue trends we have seen in the past few years: reductions in long-term debt and net debt, a tidy surplus for the city’s coffers and a growing amount of cash in the bank.

The net debt is the one that the city likes to point to – the difference between financial assets (such as cash) and financial liabilities (the bulk of which is long-term debt).

The net debt now stands at nearly $19 million, compared to nearly $24 million a year earlier.

But voters aren’t as interested in net debt as they are in other factors, such as long-term debt and where their dollars are ultimately directed.

The long-term debt was at about $28 million at the end of last year, a far cry from where it was early in the decade, when it stood at more than $40 million.

The city’s cash now stands at $7 million, up from about $4.9 million at the end of 2017. Again, it’s a stark difference from where it was a few years ago, when the city occasionally needed a short-term loan, especially in the spring, before property taxes were due.

And the city had a surplus of $3.3 million, with about a third of it coming from provincial and government funding for capital projects.

The audited financial statements also give you an idea of where your money is directed. We might complain about some of the expenses by council, or the amount of overall spending. But it should be noted that expenses for the city were actually down by about $300,000 from 2017 to 2018.

This document also shows where the revenues come from; in the case of the city, about two-thirds of the $33 million in revenues came from property taxes.

The financial picture isn’t perfect for the city. One of the biggest concerns is that taxes receivable now stand at around $2.5 million, a number that has been growing since the economic slowdown started in 2014. With the uncertain future for Units 4 and 5 at the Boundary Dam Power Station, that number is likely going to keep growing.

But as a whole, the positive numbers outweigh the negative.

It’s also time to start thinking about what’s next.

People might want to ask about their property taxes when the financial picture is better than it’s been in years. The good news is the municipal share of property taxes went up just one per cent in 2018, and remained stable in 2019. There also wasn’t an increase for utility rates. It’s been many years since property taxes and utility rates remained stable.

At a time of uncertainty, when many people have faced job losses and businesses have experienced tough times, the last thing they want to experience is a property tax increase.

It’s also time for the city to take a serious look at its financial reserves. It now has $7 million in cash, and while about $3 million of that is restricted a rainy day fund would likely be welcomed by the people of this city.

Set aside some money from these surpluses each year. Make sure we’re as prepared as we possibly can be for what could be some difficult times in Estevan.

It also doesn’t hurt to have some money set aside in case there is a natural disaster, or in case we find ourselves in a situation like 2013 with Souris Avenue North, and a massive, unbudgeted rebuild of a road is needed.

City council and administration deserve a lot of credit for Estevan’s improved financial picture. But they also have to start thinking about how they can have the finances ready, in case the next few years aren’t kind.