The cost of clearing encampments, revenue shortfalls from the slowed housing market and delays in implementing a new penalty system for parking infractions has put added pressure on the city's 2024 operating budget and could weaken a year-end surplus projected in the range of $3.1 million.
An interim financial update from chief financial officer Sheryl Ayres is included in next week's council meeting package and details the challenges faced by the city up to Aug. 31.
The city uses annual budget surpluses to offset higher-than-projected costs and bolster transfers to reserve funds.
The $3.1 million surplus projected this year represents just 1.9 per cent of gross expenditures at the city in 2024.
It comes from $515,532 reported to council in April and $2.6 million in savings through August forecast changes.
The surplus reflects higher than anticipated revenues in some areas, offset by challenges in others.
Most of the surplus, $2.2 million, comes from investment income, which reflects favourable market conditions in the first half of the year when interest rates were higher.
Penalties and interest on taxes that weren't paid on time, as well as supplemental taxes led to higher than budgeted revenues of $2.1 million. Tax write offs and rebates of $1 million, however, reduced that surplus boost to $1.1 million.
Challenges anticipated to weaken the surplus in the final months of the year include revenue shortfalls in planning, which by Aug. 31 had already topped $574,000.
Economic conditions this year slowed new housing and construction projects, reducing development application revenues by $896,000.
Unfilled positions in the department, however, saved the city $322,000, partially mitigating the shortfall.
Delays in implementing the city's new Administrative Monetary Penalty System (AMPS) reduced anticipated parking revenues by $150,000.
Encampment cleanup, which is expected to continue indefinitely but could be mitigated somewhat by new funding committed by the province to deal with the problem and help house homeless individuals, had already cost the city $100,000 by the end of August.
Although the city won't detail what those efforts have been in the last few months, CambridgeToday has reported on two cleanups and in speaking with outreach support staff has heard there have been about five more.
The city's water utility operations is also forecasting a surplus of $83,599.
It's attributed to a combination of increased revenues from overdue bill payments and cost savings. The number is partially offset by higher-than-anticipated billing write-offs.
Ayres said she will provide a comprehensive update as well as recommended transfers to and from reserve funds in a year-end operating financial update report to council.
