Funds allocated for Coalhurst Spray Park project holdover

Posted on March 5, 2024 by Sunny South News

By Nikki Jamieson
Sunny South News

An oversight meant funding for a part of the spray park project in Coalhurst has just now been allocated.

Back when the Town’s spray park was completed in 2021, there were some deficiencies which the contractor had to resolve prior to receiving payment from the Town, with $200,000 withheld. 

In addition to this amount, a project holdback of about $50,000 was never recorded. It is common for construction projects to have a holdback of about 10 per cent of the pre-tax amount included on each invoice.

Initially, the spray park was funded with a Coalhurst Parks and Rec Society donation, and funds from the Municipal Sustainability Initiative (MSI). The MSI Statement of Funding and Expenditures (SFE) for 2021, when the bulk of the work was completed, had stated that the project was complete and fully funded and submitted March 15, 2022. But the withheld $200,000 had not been expensed, although it was recorded as payable in the accounting system and financial statements, and the $50,000 project holdover simply hadn’t been recorded.

The $200,000 was expensed in 2022, and the $50,000 in 2023. 

However, the $50,000 has no source of funding, something that wasn’t noticed until the Town started preparing the year end financials for 2023. To fund this expense, the Town could either approve the use of $49,523.81 from the General Reserve to fund the holdback payment for the Spray Park, approve funding from another source or treat the expense as a regular expense and allow it to flow through to the surplus/deficit, the latter which Mike Passey, director of corporate services for the Town, did not recommend.

“The end result though… it’s just moving figures around or dollar around the pit,” said Passey. “At the end of the day, it’s the same, less than whichever one (MSI or reserves) you want to do projects for in the future.”

When asked about using MSI for the project holdback cost, Passey said a new application would have to go in, which would take “weeks to months to approve”.

“I don’t think they’ll decline it, but it just does leave that period of time where we’d have to do something. On the books it ends up that we’ll set up a receivable to fund it through MSI to close off for 2023. If they declined the project, then a receivable’s still on our books and we’ll have to fund that receivable and negate that one and fund it from reserves some other way. If we were successful in our application – which is likely – then we would just have that receivable and negate that on the books for the years going forward. It’s more of a timeline thing.”

Coun. Deborah Florence said it was “a little disappointing” for a project from 2021 to still be on the books. When asked how much the Town contributes to the General Reserve, Passey said they did not make a regular contribution to it, but they add any surplus from the previous year to it, and a few months ago in 2023, they added $220,000 to it.

Coun. Scott Akkerman agreed with Florence that it was a little disappointing, and he thought the funds would be best coming from General Reserves as it would create “less headaches and administration time” to deal with it. 

Council passed a motion to approve the use of $49,523.81 from the General Reserve to fund the holdback payment for the Spray Park.