At last Monday’s Committee of the Whole Council meeting, the audited financial statements for 2020 were presented. The audit was clean – KPMG signed off saying that the statements were truthful (that’s really what an audit does – looks for untruths or errors). Jennifer Heslinga, from the Town’s Finance Department made a long presentation and apart from a few interesting items, it was all about esoteric accounting details with an emphasis on what the pandemic did to the numbers and how the reserves work. Frankly, I did not understand the details on reserves so I’ll just report the interesting items. For example, where did the money come from and where did it go. Big picture? Cobourg gets only 47% of its income from the tax levy and the Police are the biggest expense.
Compared to budget, $11.9M went into reserves in 2020 compared to a budget of $2.2M. That’s because although some revenues like user fees went down, grants and other revenues went up. Plus expenses went down due to hiring freezes and reducing services. Northam Park remains profitable and provided a $2M contribution. The CCC is of interest to many; it has a remaining debt of $2.81M which matures in 2033.
Actual revenue for 2020 was $60.7M and 41% of this came from the tax levy – see all sources in graphic below.
So where does the money go? Here is a graphic showing expenses by Service.
And how much went on Salaries and Interest etc.?
In terms of performance, Cobourg did well in 2020 – the reserves had a substantial increase and will help cover pandemic problems in 2021. We learned some interesting things about the budget – I don’t recall this level of detail in previous reports by the Town although the County has provided this kind of breakdown.
I note that interest payments are low – that’s good. Jennifer said that the interest rate for long term debt is 2.49% to 3.47% and the interest paid in 2020 was $171K.
But the budget increase number that was agreed by Council on Monday was a levy target of 3.1% increase. It was not explained why a good 2020 still means a high increase in 2022. Do we need the extra $9.6M in reserves that we were not expecting? I guess you need to be an accountant to follow the reasoning. To be fair, Jennifer’s presentation came AFTER Council agreed to the target for the levy increase.