I am writing today to bring public attention to a potential financial crisis in the County of Stettler.
I am alerting the public that the County of Stettler is likely to experience a monetary shortfall of perhaps eight million dollars needed to fund the upcoming years expenses.
If this occurs, this amount of money is one third of the normal amount of money that the county has for the upcoming year.
The signed bank reconciliation at the end of August 2017 reports an overdraft of almost one million.
This is alarming because the bank reconciliation from the same month one year previous reported a cash bank balance of almost four million dollars, this is five million dollar difference.
Over the previous years the county often had a bank balance at the end of August in a range of three to four million dollars.
In a one-year period up to August 2017 the county has spent over five million dollars more than normal.
These financial facts are alarming, but the actual financial information is much worse.
The overdraft at the end of September is projected to be close to two million.
By the third week of October the bank balance could be close to $2.75 million based upon current projected spending. The actual end of September bank reconciliation will not be available till the November county councillors meeting.
The only fact we currently have is the August 2017 bank reconciliation.
The important bank balance date is the third week of October which is the time that the county will start collecting their tax income from county ratepayers.
By the end of October 2017, the county should have a positive bank balance.
The real problem becomes apparent because the money used to pay back the overdraft will not be available to fund next years county expenditures. And the situation is much worse than that.
The real amount of money not available for county expenditures in the upcoming year is the sum of the actual overdraft at the third week of October plus the normal amount of money that would be in the county bank account at the third week of October.
If the county normally has two million dollars in the bank account at the third week of October, then the funds not available for funding next years county expenditures could be two million plus the overdraft which could be $2.75 million at the third week of October which is potentially $4.75 million.
This is alarming, but the situation is much worse.
The latest County of Stettler budget mentions that oil related M&E tax income is expected to be two million less than previous years.
Actual discussions with councillors would estimate that the actual reduction in M&E is closer to $2.5 million less than previous years.
To make the funding crisis worse, last years council promised to transfer two million of next years money that would normally be used for road building back to general reserves.
This means that this two million is not going to be available for normal road building in the upcoming year.
The general reserves are currently depleted, and the county can not operate without any money in the general reserves, so this transfer of funds is going to be necessary.
The sum total of this financial shortfall could possibly be six million to eight million dollars which is one third of the money that the County of Stettler normally has available to pay expenditures.
The fact that support this statement is the provided August 2017 signed bank reconciliation report which shows five million dollars less money in the bank than the same time one year previous.
We have the county budget for upcoming years which predicts two million less oil related M&E income.
We have the documentation from the County of Stettler website addressing the need to return two million to the depleted general reserves.
Ratepayers should not be confused when looking at the financial reserve statement provided by the County of Stettler.
Most of the financial reserves both in operating and capital reserves is segregated and reserved for the operation of the county departments.
This money is NOT available for discretionary spending.
Do not let county representatives tell you that there is lots of money in reserves.
There are different kinds of reserves.
The fact is the general reserves, which are available for discretionary spending is depleted, and that the bank account is depleted and was in an overdraft situation.
To my knowledge, the bank account has never previously been in an overdraft situation since the county was organized.
The county is going to experience a critical cash shortfall.
County representatives have access to a great deal of information regarding the county finances and I would ask for a rebuttal stating how the county thinks they will fund normal operations for the upcoming year.
The land in the Town of Stettler that is currently owned by the county may be contaminated and may not be available for sale.
The county had communicated that this land was worth millions, but until it is actually sold, it is difficult to determine a value.
The land may not be easy to sell, or the cost may be greatly reduced.
The ratepayers of the County of Stettler need to be alerted and made aware of this financial situation.
Email me with your concerns at email@example.com.