City closes book on 2017 with $25M surprise

First came last December's $10-million 'Christmas miracle.' Now, the city treasurer's office says Ottawa ended 2017 $25-million in the black. What's going on? Mostly timing, unfilled jobs and a dash of good luck.

Windfall 2nd pleasant gift after the $10M 'Christmas miracle' announced in December

The city is swimming in excess cash after an unexpected land deal pushed its total surplus for 2017 to $25 million. (Mark Blinch/Reuters)

First came the $10-million windfall announced at Ottawa city council's meeting in December 2017, a surprise that one councillor quickly dubbed a "Christmas miracle."

Now the city treasurer's office is reporting the municipality ended last year with a $25-million surplus. More manna from heaven? Or did it appear, as Mayor Jim Watson told CBC on Tuesday evening, because the city is now much more prudent than it used to be?

Actually, the surplus mostly comes from a land deal, according to a city report released Tuesday.

The bulk of the additional money — $12.5 million — comes from property sales by the city's land-holding arm that went through in 2017. The city was expecting revenues of $5 million from the Ottawa Community Lands Development Corp., but instead received an unexpected $17.5 million.

The timing of land deals is a bit "lumpy" and unpredictable, said Isabelle Jasmin, the city's deputy treasurer.

Add the $12.5 million to the surplus announced in December — which came largely from higher-than-expected taxes from new homes — and you get to close to $25 million.

Tax collectors $21M in the red

That's a somewhat simplified explanation of the year-end surplus, which is actually the grand total of the surpluses and deficits —some significant — of all the city's departments.

The biggest deficit is in the tax collection office, which ended 2017 $21 million in the red after the city found itself forking over tax rebates to Ottawa homeowners who had successfully appealed their provincial property assessments.

"We expect that to level off now," said Jasmin.

The transit department posted a $4.3-million deficit, while police ended the year almost $7 million in the red. And road services, which includes winter maintenance? A whopping $16.2-million deficit.

Vacant jobs, parking fines

But the surpluses in other departments made up for the shortfall.

In a number of cases, empty jobs translated into millions of dollars, at least on paper. The planning department, for example, posted at $4-million surplus because of vacancies — money that was baked into its annual budget, but that it didn't spend because it didn't hire people.

The water and sewer department surpluses totalled a little more than $5 million. While the wet weather depressed revenue numbers in the early part of the season, the departments also saw lower operating costs because of reduced water use. And again, unfilled vacancies contributed to the surplus, according to the city report.

Some departments saved money by putting off repairs and maintenance.
Zealous Ottawa bylaw officers brought their department a $1.5-million surplus thanks to higher-than-expected revenues from parking fines (Ashley Burke/CBC)

And the city's bylaw officers were more vigilant than expected when it came to giving out parking tickets: the emergency and protective services department ended the year with a $1.5-million surplus due to "higher enforcement of parking fines."

Money going to infrastructure, reserve funds

The "Christmas miracle" money is going toward fixing the city's infrastructure, a strategy council agreed to last December.

All that surplus money will go to the city's reserve funds. In turn, deficits are covered by those same reserves.

The report on the city surplus will be discussed at the finance and economic development committee next Tuesday.