Langley City must have its financials audited annually. The audit forms part of the City's Annual Report, which Council releases in the summer. Langley City's independent auditor, Kristine Simpson, from BDO Vancouver, gave our 2023 Consolidated Financial Statements a clean bill of health.
In 2023, Langley City had about $59.4 million in expenses. Due to increased usage, the City had a small $212,372 operating deficit for water service. This deficit was caused by the timing of the Metro Vancouver Regional District's billing cycle compared to the City's water billing cycle. This deficit will be corrected when people pay their 2024 water utility charges.
Other departments had an overall surplus. Any surplus is put into reserve accounts to help fund capital projects, such as repaving roads or enhancing parks. The City transferred $3.9 million in operating surplus to reserve accounts in 2023. The biggest driver for the 2023 surplus was about $762,000 in unneed debt service charges, as we are still working through the $15 million loan authorization process. The debt service charge is baked into our tax rate. RCMP detachment operations were also under budget, creating a $567,00 surplus.
The remaining surplus is primarily due to underspending on staffing. This surplus is due to temporary staff vacancies, unused overtime allocations, new positions hired part-way through the year, and unfilled positions.
The City's goal is to have a balanced budget, but we cannot have a structural deficit under BC law. This requirement means that the City must budget conservatively, which generally means we will have a small surplus at the end of the fiscal year.
This year, we had a larger surplus for reasons I previously noted. One of Council's action items is to ensure that we have a plan for filling these positions. Council also asked staff to develop a budget surplus policy to formalize what we do with budget surpluses. City staff will present this policy to the Council for consideration this summer.
For more information, please read the City's report on the 2023 Consolidated Financial Statements.
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