The city of Edmonton is coming out of 2009 with a surplus of $33.7 million.

The surplus is being credited to tighter rules on hiring new staff, additional natural gas franchise fees and better earnings on investments.

The city administration recommends that $17.1 million go towards the city's reserve fund and anticipated shortfalls in this year's budget.

Those funding gaps include an outstanding union settlement with Edmonton police, a budget shortfall in election services, and money needed for the Edmonton Indy.

Other projects that haven't been fully funded — such as the Cornerstones program to create affordable housing — should receive the rest of the surplus, staff recommended.

Decisions on whether to accept the recommendations will be made during council meetings next week.