City using surplus funds to buy transit bus

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This article was published 05/04/2024 (907 days ago), so information in it may no longer be current.

The City of Brandon ran an operating surplus of about $3.8 million and a utility deficit of around $250,000 in 2023, according to a financial return presented at Brandon City Council at its Monday meeting.

Half of the surplus, $1.9 million, is being directed toward the future purchase of a second office building for the Brandon Police Service and a further $52,212 to buy new police radios.

From the surplus, council approved putting $1,073,622 into the transit equipment reserve and spending $881,700 from it to move up the purchase of a new Brandon Transit bus from the 2026 fiscal year to this year.

Coun. Jason Splett (Ward 8), delivering a report from the audit and finance committee, said that will let the city purchase four buses this year instead of three and that it would reduce the amount of appropriations needs for bus purchases in future years.

Another member of the finance committee, Coun. Glen Parker (Ward 9), said there were discussions about using that portion of the surplus in this year’s budget, which included a 9.4 per cent property tax increase. However, it was determined that it would have a “miniscule” effect on the amount of tax the city needs to collect each month.

“We thought by utilizing those funds to purchase a bus, which we’re going to have to do, it accelerates the replacement cycle of our fleet somewhat and will probably also facilitate far more favourable pricing now by buying it now rather than two years hence,” Parker said.

“So we’re probably going to save $100,000 or more by doing that. We just felt that versus putting them into a big black hole and doing nothing, we would come up with a specific project, a tangible item that taxpayers see they’re getting for their money.”

He said it would probably reduce the needed tax hikes in the next two years by around one per cent each year.

Coun. Shawn Berry (Ward 7) said he was caught off guard with the size of this year’s surplus, saying that if there’s a discussion around big black holes, there are plenty of potholes around the city.

“I guess the thing that really set me back a little bit is we’ve had no discussion about this until tonight and now it’s on the table that we’re going to buy a bus and we haven’t had any discussion amongst council about ‘hey, we’ve got an extra million dollars, what do we want to do with it?’” said Berry.

“I would have liked to have a discussion on this because I think there are a lot of worthwhile projects, including the roads in Brandon that might have been worth a look at before we dedicated this to buying a bus.”

Parker said the committee had discussed multiple options, including putting it toward the Sportsplex renovations.

“The problem with putting it into sidewalks and streets is we often … can’t handle any more work than what we’ve budgeted for, so there’s no use putting more money towards it and having it sit there for another year,” he said. “The taxpayer gets no benefit from the money.”

Replying, Berry said repaving and milling would be an easy thing to add on to another contract, but mostly he would have liked to have had a discussion.

Splett said the city was advised extra road work would not be able to be completed, whether in-house or through a third party.

City clerk Renee Sigurdson said the second motion surrounding the bus purchase was not included in the original agenda for Monday’s meeting.

Coun. Kris Desjarlais (Ward 2) said it’s rare that the city has this kind of surplus and that usually decisions surrounding the surplus are made during budget discussions. He said he wasn’t necessarily disagreeing with the way the money was being spent, but asked if all of council could have a conversation surrounding this kind of surplus going forward.

On a related note, Coun. Bruce Luebke (Ward 6) said he didn’t understand why the information on the city’s surplus changed so much from the information presented before budget deliberations to what was presented on Monday, and asked if more robust information could be provided in the future.

The motion to purchase the bus passed with only Berry voting in opposition.

Another $500,000 from the surplus is being deposited in the Sportsplex reserve to eliminate a planned appropriation worth the same amount and $250,000 is being used to eliminate an appropriation to the disposal site reserve.

To pay for the city’s portion of a fossil fuel study on its vehicle fleet, $72,500 from the surplus is being put in the professional fees reserve.

Much of the surplus came from the provincial government, including a $1.9-million increase to the city’s urban policing grant and a $966,000 increase in the city’s municipal funding grant.

Excluding the additional funds from the province, Splett said the city’s operational surplus was around $982,000, a 0.9 per cent deviation from the 2023 budget.

The utility deficit of $252,023 is also a 0.9 per cent deviation from last year’s budget. That deficit will be reduced to zero by reducing this year’s appropriation to the city’s wastewater reserve by the same amount.

The audit and finance committee reported back in September that it was projecting a $1.46-million operating deficit for Brandon in the the 2023 fiscal year, with the two biggest contributors being a $463,000 shortfall in supplemental tax revenues and a loss of $340,000 connected to the closure of the Sportsplex’s ice plant due to safety concerns.

At the time, council decided to use some of the extra municipal funding it had received from the province to cover part of the shortfall and ask city departments to scrub their budgets to make up the rest.

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