The City of Calgary reported an operating surplus of $238 million in 2023

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The City of Calgary posted a positive operating variance of $238 million in 2023, taking into account “higher-than-expected investment returns and incremental revenue,” according to a report presented at Tuesday's executive committee meeting.

Chief Financial Officer Carla Male highlighted the advantage when presenting the city's 2023 renewal to council members.

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He said the $237.7 million surplus was the result of higher revenues, lower-than-expected expenses and a favorable variance on several tax-supported services.

“In 2023, we've worked hard to deliver results and improve the lives of Calgarians,” Male said during his report to the committee.

Operating advantages are inherent to Canadian municipalities striving for balanced budgets, Male said. The most recent positive operating variance follows a $259 million surplus in 2022.

“They generally arise due to factors and events that are different from those contemplated in the budget plan, including budget contingencies for contingencies that may or may not be realized or other circumstances over which the city has limited or no control,” he said.

According to the report, the operating variance is 5.2 percent of total budget expenditures, net of reimbursements.

The report shows a $164 million variance in corporate programs, which can be attributed to $68.6 million more revenue collection than budgeted and a $73.7 million tax-supported variance caused by “higher revenues, lower wages and salaries.” and several one-off effects”.

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Male noted that the council voted during budget deliberations in November to allocate $100 million from an expected surplus beginning in 2023 to support priority investments, including projects related to housing, public safety and transit.

The remaining $137.7 million will go into the Fiscal Stability Reserve, Male said after council approval.

Local entrance fee

The city also collected $200 million more in local affordability fees than it budgeted for 2023 because of changes to variable rate pricing that dramatically increased the cost of electricity last year.

According to Male, the Council allocated $165 million from the city's local entrance fee to fund the capital investment.

The remaining $35 million in franchise fees will be deposited into a fiscal stability reserve, such as excess revenue from Enmax's dividend.

Capital costs

The report notes that the city will spend $1.5 billion on capital investments in 2023, or 52.5 percent of the $2.8 billion budget.

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Some of the major expenditures cited by the man on Tuesday include expanding Vivo, renovating Glenmore Athletic Park, resurfacing the track at Foothills Athletic Park and completing Haskayne Legacy Park.

Other capital priorities outlined in the report include downtown revitalization efforts, including a downtown event center, the Rundle Redevelopment Project for affordable housing, and the Arts Commons and Olympic Plaza transformation projects.

The city's capital budgeted investment rate rose to 52.5 percent last year, Male said, up from 44.4 percent in 2022.

However, he said, the city's capital spending is affected by rising costs, supply disruptions and other “systemic contributing factors.”

According to him, from 2023, the unspent budget of 1.3 billion dollars will be transferred to 2024.

“This is not a one-time event that never happened.”

1st district. Sonja Sharp often beats the drum that the city doesn't need to resort to major tax increases while simultaneously announcing major operating variances.

He reiterated that position after Tuesday's meeting, saying that while there are more surpluses than deficits, true fiscal responsibility comes with balancing the budget.

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“If we're going to see these kind of surpluses almost every year, then we have to reassess the level of risk we can tolerate,” he said. “Are we being realistic about how we predict these benefits?” This was not a one-time event that never happened. We're seeing continued benefits.”

Sharp noted that this year's surplus could not be used to offset taxes for 2025 because that would create a ripple effect, but that “we need to start putting the administration in a position to be able to use that money.”

He noted that the council recently decided to change how the city collects local entrance fees and changed the formula to ensure that the fee collects consistent and predictable revenue in the future.

However, he admitted that the change would not take effect until 2027.

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