City in excellent financial shape according to audit

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At a special council meeting on Wednesday, June 27 Melfort City Council had a look at the city’s financial status. Council received  the Financial Statement for the fiscal year of 2017 and the numbers were not surprising to council.
The audit, which was done by MNP, came out as expected according to Melfort Mayor Rick Lang.
“As usual there were no concerns by the accounting firm that does the audit and that’s what we expected and of course that’s what we got,” Lang said.
“ I would say that’s a credit to the staff we have and the job that they do and it certainly, it would be surprising if there were some concerns,” he added.
The city’s accumulated surplus in the statement was $55,439,562 up from $53,896,816 in 2016. The surplus, according to Lang is viewed differently by council. They view it as income over expenses.
“My understanding is that the operating income over the expenses was approximately $90,000. So that will come to council at a later date because we disperse that operating surplus to different places,” he said.
That surplus is dispersed to the special capital fund and facilities maintenance fund and will come before council at a future meeting,
After reviewing the numbers Lang observed that Melfort is in  solid financial shape.
“The reserves are certainly a help to us to have that money available to do internal projects. In fact we have utilized some of that reserve money to do the Spruce Haven complex,” he explained.
By utilizing the reserves the city can finance projects like the Spruce Haven expansion.
 “When we finance those projects internally it helps us in two different ways. It generates interest income, which we then apply to our capital program and it supplies the funds to progress with the improvements to the city,” Lang explained.
The city’s total revenues in 2017 were $13,712,971 down from $13,752,468 in 2016. Expenses were $12,172,746 up from $12,172,225. The 2017 expenses included the completion of the Wellness Centre for $61,840, which did not appear in the 2016 expenses report.
Lang explained that financial statements are built on estimates and the actual budget is built on more realistic numbers. Accountants tend to air on the side of caution.
“So you will find that the revenue numbers are usually built on the cautious side too. When the expenses increase, typically your income numbers increase as well,” he explained.
“As long as we are running surpluses we don’t get too concerned,” Lang added.
According to Lang there have been only a few years where a deficit has been run since he was on council.
 “That is rare and those years are few and far between but when we run into a surplus like we have this year we don’t have any major concerns with it. It shows that everything is being run quite well,” he said.

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