FINANCE COMMITTEE UPDATE REPORT
October 16, 2023
The Finance Committee is pleased to present an update to the residents of Lions Bay following the Councils first year in Office. This report highlights key Committees recommendations and the commitment to open communication. We encourage interested residents to join the committee or future Financial Task Force Groups to shape the future of Lions Bay.
Prudent Fiscal Management
Early in our tenure, the Finance Committee presented recommendations to Council (January 31st, 2023), where the resolutions containing the following recommendations (with minor amendments) were approved:
Moved/Seconded
That the banking vulnerability be addressed by ensuring that:
1. the bank has instructions that no cheque or electronic transfer should be processed unless it has two signatures or electronic signatures and;
2. the authorized signatures or electronic signatures be those only of the Chief Administrative Officer and an elected official or two elected officials of the municipality of the Lions Bay;
3. a limit be placed on the amount of any cheque or transfer; and that;
4. any amount above that limit would require additional written authorization from the Chief Administrative Officer or the Mayor or Acting Mayor for such transactions in that order.
CARRIED
That the vulnerabilities in the Village banking procedures be addressed immediately and on an urgent basis to ensure that the principles of separation of the functions of authorization, recording and control are met.
CARRIED
That banking controls are applied to all Village bank accounts.
CARRIED
Best practices be implemented for treasury management per municipal regulations to maximize the return on the Villages current $5.8M funds.
CARRIED
Following the Committees recommendations, staff discussed Village accounts with our ScotiaBank financial advisor and converted our ‘Savings Account’ to a checking account, which does not incur service charges for checks we issue to our vendors. Substantially all of our payments are made by check.
During the period May 1, 2023 to July 31, 2023 we incurred service charges of $552, in comparison to $1,622 for the same period in the prior year, representing a reduction in service charges, over 3 months, of $1,070.
Recently, the Finance Committee was also asked to respond to resident’s question poised to Council on September 5th in which they stated that:
1. 2022 interest on bank accounts was $114,287 and the 2023 budget is for $153,947, a difference of ~$40,000
2. The mayor had stated in a Village Update that the new financial controls would net a gain of $8,000 per month
3. They added some remarks about the difference between $40,000 per year and $8,000 per month and asked the mayor to " publicly correct your exaggerated statement on grossly overstated interest earned Revenue which is simply not true when you review the financial statement"
The financial records actually show interest for 2022 was $113,647 and 2023 interest revenue is projected to be $226,093 - a difference of $114,095 or $9,508 per month. This projection is based on actuals up to August and the same monthly returns for the remainder of the period. The financials also show that the average cash is nearly $1M less on average each month when compared to 2022.
They were comparing the 2022 actual interest to the 2023 budgeted interest. However the 2023 actual interest is what needs to be considered, not the budget, which did not have the benefit of the financial controls initiated in 2023.
The Mayors estimate was for an increase of $8,000 per month while the actual increase gained from the improved financial returns is over $9,500 per month, even though the principal generating that interest was 17% smaller on average in 2023.
Therefore, the resident can rest assured that the mayor's statements were not overstated but somewhat understated based on the financials.
The finance committee welcomes residents interested in joining our team in providing oversight and guidance to our Council and Staff.
Sincerely,
David Shore, Chair
Lions Bay Finance Committee
Comments