Town of Pincher Creek Shares 2024 Financial Statement Highlights

Pincher Creek, AB – April 22, 2025 – The Town of Pincher Creek is pleased to share highlights from its 2024 audited financial statements, which show positive progress in several key areas and continued financial responsibility. The Town received a clean audit for 2024, meaning our financial statements are accurate and in line with Canadian Public Sector standards. The audit was conducted by KPMG LLP, an independent accounting firm, as required by Alberta’s Municipal Government Act. The draft financial statements were presented to Town Council at the April 2, 2025 Committee of the Whole meeting.
 
Utility Services Are Now Self-Sustaining
Thanks to gradual increases in utility rates over the past few years, the Town’s utility department has reached a point of self-sustainability. This means the costs of providing water, sewer, and waste services are now being fully covered by the rates collected from users.
 
Year-End Surplus Strengthens Reserves
At the end of 2024, the Town recorded a net surplus of $92,000. This surplus has been added to the Municipal Tax Stabilization Reserve, helping to support future financial stability. The surplus was due to higher-than-expected revenues from franchise fees, interest earnings, and rental and lease income. Savings were also realized due to unfilled staff positions during the year. However, the Town did experience some unplanned costs, including expenses related to a temporary CAO, land held for resale, and recycling operations.
 
New Accounting Standards Adjusted
2023 was the first year municipalities were required to report on Asset Retirement Obligations (ARO) - the future costs of safely retiring infrastructure like lagoons, underground utilities, or buildings. The Town hired a consultant to help gather and analyze the necessary data. In 2024, the Town’s Director of Operations, a professional engineer, reviewed the initial data and identified opportunities to refine the estimates. This resulted in more accurate reporting. Additionally, a Town-owned property was sold and will now be rehabilitated instead of demolished, removing that future liability.  Our Waste Water Lagoons are expected to be utilized for many years to come so, although the accounting standard requires the Town to record this obligation, it is not expected to be realized for a long time.
 
Improved Financial Position
Thanks to these updated estimates, the Town’s financial position improved. Our net financial assets, which means the value of what the Town owns compared to what it owes, grew from $3.43 million in 2023 to $4.16 million in 2024. The Town also ended the year with positive cash flow from day-to-day operations.
 
Reserves Grow to Support Future Projects
The Town continues to invest in its future through careful management of reserves. When the 2024 budget was prepared in the fall of 2023, reserves were expected to grow to $8.8 million. The actual year-end reserve balance was $10.2 million, thanks to savings on capital projects and the deferral of some work to 2025. These reserves, made up of tax and utility revenues, help fund long-term infrastructure and community improvement projects.
 
No Deficit, Despite Reporting Rules
All Alberta municipalities are required to balance their budgets, meaning they cannot run a deficit. However, financial statements may still show an accounting deficit due to non-cash items like depreciation (amortization) and the new Asset Retirement Obligation. These amounts don’t require immediate funding and are covered through existing reserves.
 
2024 Financial Highlights
 

• Increased Revenue from User Fees: User fee revenue rose by $699,000, mostly due to the sale of Town-owned property for $551,000.
• More Operating Grant Revenue: The Town received around $1 million more in operating grants compared to 2023. This includes $1.15 million in funding to support Pincher Creek Emergency Services in purchasing land for a new location.
• Protective Services Costs: Expenses for protective services went up by $1.16 million – again, mainly due to the $1.15 million grant for the emergency services property purchase. Police services also cost the Town $205,687, which is paid to the Government of Alberta to help fund the RCMP.
• Low Debt Levels: The Town has a total borrowing limit of $21.9 million. As of 2024, we are using only 14% of that – or about $3.08 million.
• Low Debt Servicing: The Town’s debt servicing limit (how much we could spend on debt payments) is $3.65 million for 2024. We’re only using 8.5% of that amount – about $310,935.

The Town of Pincher Creek remains committed to strong financial stewardship and long-term planning to ensure high-quality services and infrastructure for the community.

The Town of Pincher Creek 2024 Audited Financial Statements can be found at https://pinchercreek.ca/content.php?p=77

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