Editorial: Weathering a financial storm

It used to be an ominous day, unless you revelled in other people’s struggles: the presentation of the audited financial statements for the City of Estevan. 

Those days are past.

article continues below

The document was released at last week’s meeting of Estevan city council. It showed that the city has done a reasonable job of weathering the financial toll from the first year of the COVID-19 pandemic.  

Yes, the city took a hit on fees and services, but that was to be expected. After all, user fees for the Estevan Leisure Centre were going to be down because the facility was closed for 2 1/2 months, and some people weren’t as eager to get out and exercise or use a program as they were pre-COVID. 

And facility rentals were going to be down as well, because of restrictions on gathering sizes and limitations on what we could and couldn’t do. 

Taxes receivable were up due to the pandemic, because some people didn’t have as much money as they did a year earlier.  

Not that many years ago, the city would have to dip into the overdraft or need short-term borrowing in order to pay the bills until property taxes came in during the middle of the year

The city continued to pay down its long-term debt, which is the excess of liabilities over assets, and reduce the long-term debt, although it should be noted that long-term debt does account for much of the city’s liabilities, so paying down the long-term debt should, in theory, result in a lower net debt. 

There’s work to be done, but the picture is still better than it was a decade ago.

Council and the city like to point to the net debt, which was at $18.3 million at the end of last year, compared to $19.6 million at the end of 2019, but most of the public is more concerned about the long-term debt, which decreased from $23.7 million to $21.1 million.

It is an encouraging sign that both forms of debt are still lower than it was at the start of 2020.   

When COVID-19 first hit Saskatchewan nearly 15 months ago, we didn’t know the impact it would have on municipal coffers. We knew that it wouldn’t be as bad as the provincial and federal governments; after all, the city wasn’t going to have to trot out stimulus spending, or programs to help out businesses hammered by the pandemic, or people who lost their jobs. 

But the city was still going to feel the pinch of lost user fees, and allowing people to defer their property taxes and utility bills to a later date.  

From an overall financial perspective, the city was in pretty good shape at the end of last year. And once things do return to normal (or get as close to normal as we’re going to get for a while), the financial picture should still be pretty good.

Oh sure, we’re always going to be able to think of things we’d do differently. We’d spend less in certain areas, or not at all in others. We all want to see lower taxes, although a lot of us would be surprised at just what our property taxes and utility rates pay for if we did find ourselves in the decision-making seat.  

We can all think of a few areas where we wish council would spend more. We can all think of a few roads that we wish the city would resurface, especially in residential areas, although many might be surprised just how expensive it is to repair a road, especially if the underground infrastructure has to be repaired first.

Yes, the city and the elected officials can always do better. And they should always strive to do better. But when you look at where the city’s finances were when 2020 began, and where they were at the end of the year, they did a pretty good job of weathering the financial storm brought on by the final 10 months of 2020.  

© Copyright Estevan Mercury

Comments

NOTE: To post a comment you must have an account with at least one of the following services: Disqus, Facebook, Twitter, Google+ You may then login using your account credentials for that service. If you do not already have an account you may register a new profile with Disqus by first clicking the "Post as" button and then the link: "Don't have one? Register a new profile".

The Estevan Mercury welcomes your opinions and comments. We do not allow personal attacks, offensive language or unsubstantiated allegations. We reserve the right to edit comments for length, style, legality and taste and reproduce them in print, electronic or otherwise. For further information, please contact the editor or publisher, or see our Terms and Conditions.

comments powered by Disqus
ESTEVAN WEATHER