Fawcett hails utilities surplus as boon for city

The City of Brandon posted a $2.1-million surplus for water and wastewater services last year, council was told last week during an annual review of the utilities’ finances.

The surplus was due to unexpected savings at multiple facilities, staff said.

“We’re just in a way better position than we were,” Brandon Mayor Jeff Fawcett said.

“In the classic, ‘Leave it better than you found it,’ we’re leaving it way better than we found it. So going forward, people are going to be at a much better place.”

The surplus came from four areas: lower purification and treatment costs because of reduced chemical requirements; higher industrial wastewater reclamation recoveries; more development charge revenue because of more development activity; and lower administration costs than expected.

City staff try to anticipate such changes, but it isn’t always possible, the city’s finance director, Troy Tripp, said on Monday.

“We do our best to kind of predict under the circumstances, with the greatest degree of certainty that we can, of what’s going to happen over the course of the year, but there are many uncontrollable variables that can contribute to that.”

Those variables can even come down to how much rain the city receives, how clean the water source is and how often people water their lawns. Production levels at the private Canada Packers pork plant can also affect the city’s utilities, Tripp said.

The surplus was forwarded earlier this year to a capital reserve — in effect, going right back to the utility, he said.

While $2.1 million is the figure city council actually works with, the city also posted $13.75 million and $6.46 million surpluses for utilities for last year.

The $13.75 million is under the Public Sector Accounting Standards and the $6.46 million is the Public Utilities Board’s (PUB) calculation.

“Those numbers aren’t competing or conflicting in any sense. They’re just looking at the utility through three different lenses,” Tripp told the Sun.

In 2024, the city posted a $2.48-million surplus, which was the first surplus in years. The city had previously posted deficits, primarily because water and wastewater rates had not been updated. The city has paid off nearly a third of that cost as of the end of last year, with the balance slated to be covered by September 2030, Tripp said.

“That is the sort of situation that we are hoping to avoid by doing these annual reviews and make sure we’re proactively monitoring the financial performance of the utility,” Tripp said.

The reviews help make sure the city isn’t just recovering operating and maintenance costs, but also for future maintenance, preservation and rehabilitation.

While the city has posted surpluses in back-to-back years, Tripp said, staff won’t let that change the next budget.

“Because a lot of those drivers of the surplus were variable in nature and not guaranteed to occur every year, we don’t want to overly react to that surplus,” he said. “We try to maintain our plan as closely as possible.”

Tripp on Monday said the city has submitted revised rates to the PUB, which could come into effect in 2027. The application would have a $5.19 monthly impact for a typical household of four occupants.

The rates would be phased in through 2030, he said.

Tripp said it’s important that the city actively applies to the PUB whenever required.

“We want to proactively make sure that we’re adjusting for accommodating the cost of operating the system … maintaining some of the new infrastructure that’s coming online with our water treatment plant upgrade, as well as a new lift station in the system,” he said.

Fawcett said the city has made “major” moves for the utilities and that this is a “good news story.”

“PUB and our own books here show us in a much, much better place — we’ve put this city in a much better place going forward,” he said.

» alambert@brandonsun.com