An annual surplus of $145.8M for 2015: The Coderre-Desrochers Administration presents the City of Montréal's 2015 Consolidated Financial Statements and 2015 Financial Accountability Report

MONTREAL, April 13, 2016 /CNW Telbec/ - The Mayor of Montréal, Mr. Denis Coderre, and the Chairman and Member responsible for Finance of the city's Executive Committee, Mr. Pierre Desrochers, have presented the City of Montréal's Annual Financial Statements for the fiscal year ending December 31, 2015. The City of Montréal ended 2015 with a consolidated surplus of $145.8M, compared to the 2015 annual budget tabled which was $4,866.4M. This is also the second consecutive budgetary surplus achieved by the metropolis during the Coderre-Desrochers Administration's first two full years of work.

"This financial statement clearly reflects the efforts made by our administration for more than two years to manage public funds in a rigorous and effective manner. The overall surplus of $145.8M was generated by increased income concurrent with realized savings in operating expenditures. The increase in revenues, which amounted to $58.5M (3.0%), is linked in part to the growth in Montréal's real estate portfolio, which generates additional real estate tax revenues, a sign that Montréal is now reaping the benefits of major real estate projects across its territory. It is however mainly on the spending side that the work of our administration has borne fruit, yielding savings of $162M. This is the combined result of tight expenditure control throughout the year and decisions taken by our administration. The vast majority of the city's areas of activity contributed to reducing expenses, as well as most of the boroughs," said Mr. Denis Coderre.

"Since last year, the financial report has been accompanied by a supplementary document entitled Financial Accountability Report. This tool provides much more detailed information which is intended for citizens, the media and all those who want to learn more about the use of public funds. Through the Financial Accountability Report, we fulfil our commitment to ensure an open and transparent public administration. The goal is to make this document an accessible pedagogical tool, which will promote the understanding of fiscal issues and will ultimately encourage citizens' greater engagement in public life," explained Mr. Pierre Desrochers.

Composition of the Consolidated Surplus of $145.8M
Montréal's overall surplus of $145.8M is composed of a $12.0M Agglomeration Council surplus and a $133.8M Municipal Council surplus. The $133.8M Municipal Council surplus comprises a $72.1M surplus from the boroughs and a $61.7M surplus from the city's centralized corporate services.

Surplus of $72.1M from the Boroughs
In 2015, all boroughs contributed to the general reduction of operating expenses and all finished in a budget surplus situation. The share of the surplus due to the boroughs is $72.1M, substantially the same amount as before the entry into force of the borough financing reforms. "This demonstrates that the boroughs have the financial means to maintain the services they must provide to citizens. These results also show that those boroughs which saw their transfer payments reduced because of the reform still have the means to continue to offer these services," commented Mayor Coderre. Recall that this reform only took effect in 2015 and that it had no impact on the 2014 financial results.

The surplus of $72.1M will be fully retained by the boroughs. Each borough council may allocate its surplus in accordance with local priorities and choices. With respect to the $61.7M centralized services surplus, the Municipal Council will eventually decide its use.

The Accumulated Surplus and Reserves
For the City of Montréal as a whole, the surplus accumulated over past years plus reserves totalled $706.9M at December 31 2015. The boroughs have accumulated surplus and reserves totalling $239.2M, compared to $279.9M for the central city and $187.8M for the Agglomeration Council.

Consolidated Revenues on the Rise

Overal City revenues for 2015 were $4.9B, an increase of $58.5M (or 1.2%) over the tabled Operating Budget. These included in particular:

• Higher growth in the tax base for municipal taxes and compensation in lieu of taxes: $32.8M
• Real estate transfer taxes and the active real estate market generating an increase of 1.5% in the number of transactions as well as an increase of 3% in the average value of transactions: $31.8M
• An increase in public sector occupancy charges, including Ville-Marie, Côte-des-Neiges–Notre-Dame-de-Grâce and Rivières-des-Prairies–Pointe-aux-Trembles: $9M
• An increase in licenses and permits revenues, mainly for building and renovation permits, mainly in Ville-Marie and Côte-des-Neiges–Notre-Dame-de-Grace: $5M

Reduced Operating Expenses
Overall city expenditures for 2015 were $4.8B, a net change of $87.3M (or 1.8 %) compared to the tabled Operating Budget.

Analysis of Certain Activities
Snow Removal: charges associated with snow removal in the boroughs totalled $145.7M, down $10M (6.4%) compared to the initial budget. These charges represent an increase of $7.4M compared to the 2014 report, caused primarily by two additional chargeable days required and the indexing of contracts, coupled with a slight increase in the amount of snowfall.

Waste Management:
Waste management costs (City total) amounted to $156.8M, an increase of $2.5M compared to 2014. This is mainly due to the purchase of organic material collection tools for $2.1M.

Capital Programs in Progress
These investments in capital assets fall within the framework of the Montréal 2015-2024 Capital Investment Program. Investment in capital assets carried out across the City of Montréal territory totalled $931.4M in 2015, an increase of 10.6% over 2014. Note that in 2015, boroughs invested a total of $191.2M (21%) and the central city $740.1M (79%). These capital investments of $931.4M are a record amount and the highest City investment in infrastructure since 2010. Recall that over the past 6 years, the average of these investments was $761M.

Note also that the continued implementation of planned investment was carried out primarily in road infrastructures (24%), buildings (15%), parks, green spaces and playing fields (17%). Highlights of investments made by the boroughs and by central departments are available in the Financial Accountability Report document, in the "Capital Investment Activities" section.

Capital Expenditures: Less Borrowing and More Cash Payments
Total expenditures on capital investments in 2015 totalled $954.6M, compared to $844.4M in 2014. This amount includes expenditures related to capital assets ($931.4M) and operating expenditures and property acquisition for the purposes of resale ($23.2M).

Note that in 2015, the City paid a greater portion of these expenditures in cash ($522.7M in 2015 versus $306.9M in 2014), while reducing expenditures financed by borrowing ($431.9M in 2015 versus $537.5M). In percentage terms, expenses financed by the City through borrowing were reduced from 64% in 2014 to 45% in 2015.

City Debt
The net consolidated debt of the City of Montréal, the amount carried by taxpayers, is $5.556M. The city has managed to keep its debt under control, as demonstrated by the debt servicing ratio limit which stands at 13.5%, lower than the maximum threshold of 16% established by the City Debt Management Policy.

Increase in Montréal's Credit Rating
The credit rating of the City of Montreal has improved. In October 2015, the rating firm Standard & Poor's raised the City of Montréal credit rating from A+ to AA-.  This decision reflects a high level of confidence in Montréal's long term financial stability.

The 2015 financial report and related documents have been deposited today with the City Clerk. They will also be tabled at the next meetings of the Municipal Council and of the Agglomeration Council. The documents are currently available on the City of Montréal website at the following address: www.ville.montreal.qc.ca .

SOURCE Ville de Montréal - Cabinet du maire et du comité exécutif

Source: Catherine Maurice, Press Secretary, Office of the Mayor and the Executive Committee, 514 346-7598; For Information: Gonzalo Nunez, Information Officer, Communications Department, 514-868-1127