City Surplus
The City has three types of surpluses:
- Operating
- Annual
- Accumulated
The Operating Surplus can be used to cover unexpected costs. However, the Annual and Accumulated surplus amounts reported don’t represent funds available for use. The chart below explains where each surplus type comes from and the areas it can support. The content below the chart expands on each surplus type.
| Surplus type | Balance | What it is and where it comes from | Areas it can support |
|---|---|---|---|
| Operating Surplus | $276 million for the year ended Dec 31, 2024 | The City doesn’t budget for an operational surplus but is directed by Council to not run a deficit. Through our commitment to reduce costs and grow revenues, while avoiding a deficit, it’s likely every year there will be an operational surplus. | Surplus is used to help with unexpected costs such as fixing infrastructure. The surplus is transferred to the Fiscal Stability Reserve. |
| Annual Surplus | $1.11 billion for the year ended Dec 31, 2024 | Annual surplus accumulates due to accounting standards which require the capitalization of costs for capital projects that are realized through asset depreciation in future years while the associated revenue received from government or developers is recognized in the year it is received. | As an indicator only, this surplus includes the Operating Surplus but does not necessarily create further availability of funds. Therefore, it partially supports budget requirements. |
| Accumulated Surplus | $26.14 billion balance at Dec 31, 2024 | This indicator represents The City’s total net economic resources, both financial and non-financial and it is the sum of net financial performance since inception. Approximately 82% of the Accumulated Surplus is represented by Tangible Capital Assets, which are those infrastructure assets developed to provide services to citizens. | This is the equity in The City comprising mainly of the value of infrastructure and equity holdings in Enmax. The value from this holding cannot be realized as funds to support other areas unless the asset, such as infrastructure (roads, bridges, Enmax) is sold. |
All surplus amounts and details are shared in the Annual Report. The Annual Report provides a comprehensive view of The City’s financial statements. It also includes The City’s efforts to ensure practical cost management, savings and positive operating cash flows.
Operating Surplus
At The City, operating expenses include costs of delivering services as well as operation and maintenance of facilities, infrastructure, equipment, systems and vehicles. The City has an operating budget for these costs and it’s largely funded by property tax and user fees. The City is legislated to prepare a balanced budget each year. In other words, we don’t budget for a deficit or a surplus. Achieving an Operating Surplus is reflective of The City’s commitment to reduce costs.
The 2024 Operating Surplus of $276 million is a result of multiple factors including The City’s strategic decision-making, reduction of expenses and intentional workforce management, as well as returns on financial investments.
These operating savings (the surplus) are used to help Calgarians. The surplus is transferred to the Fiscal Stability Reserve (FSR), which serves as a contingency fund for operational emergencies, urgent or contingency capital expenditures, and to compensate for unplanned revenue reductions with significant financial impacts.
As the Operating Surplus may not be a re-occurring surplus it cannot be used in perpetuity to reduce the annual operating budget.
Annual Surplus
The majority of the Annual Surplus of $1.11 billion is due to accounting standards that result in the capital funding received from government grants or developers being recognized as revenues when utilized to construct the infrastructure assets that depreciate as an expense in future years. The amount reported is used as an indicator to represent whether The City was able to generate enough revenue to cover expenses in the year.
As an indicator only, the Annual Surplus does not necessarily create an availability of funds. Therefore, it’s not used to support budget requirements or reduce tax impacts.
Accumulated Surplus
The Accumulated Surplus of $26.14 billion represents The City’s total net economic resources, both financial and non-financial. It is the sum of net financial performance since inception. It is the equity in The City comprising mainly of the value of infrastructure and equity holdings in Enmax. The value from this holding cannot be realized as funds to support other areas unless the asset, such as infrastructure (roads, bridges, Enmax) is sold.
This Accumulated Surplus also represents amounts indicated in both the Annual Report Surplus and Operating Surplus.
City surplus types
The City tracks and shares amounts for three types of surplus:
- Operating
- Annual
- Accumulated
The Operating Surplus can be used to cover unexpected costs. However, the Annual and Accumulated surplus amounts reported don’t represent funds available for use.
All surplus amounts and financial details are shared in the Annual Report. The Annual Report provides a comprehensive view of The City’s financial statements.
Below you’ll find information on what makes up each surplus type, if the amounts represent funds that can be used, and if so how.
Operating Surplus
The City is required to prepare a balanced budget each year, meaning it doesn’t plan for a deficit or a surplus. However, when costs come in lower than budgeted or revenues are higher, an operating surplus can occur. This surplus reflects The City’s commitment to cost-efficiency and responsible financial management.
Operating expenses are outlined in the operating budget, and include costs of delivering services important to Calgarians as well as operation and maintenance of facilities, infrastructure, equipment, systems and vehicles. The revenues to fund them mostly come from property tax and user fees.
As the amount saved cannot be projected and isn’t consistent year to year, the operating savings (surplus) are not used to reduce the annual operating budget permanently. The City transfers the surplus to the Fiscal Stability Reserve (FSR). This reserve acts as a financial safety net and is used to:
- Respond to operational emergencies
- Fund urgent or unexpected capital projects
- Offset unplanned drops in revenue that could impact services
This approach ensures The City can continue to deliver essential services and respond to unforeseen challenges. Helping Calgarians today and preparing for tomorrow.
Annual Surplus
Most of the Annual Surplus comes from accounting standards to ensure transparency while maintaining responsible financial planning.
When The City receives capital funding, such as government grants or developer contributions, it’s recorded as revenue in the year it receives it. The funds are used to build infrastructure that depreciates over time, the depreciation is recorded as expenses in future years.
This surplus is mainly an indicator showing whether The City generated enough revenue to cover expenses for the year. It includes Operating Surplus, but it doesn’t create extra funds for new spending. It’s not used to support the budget or reduce taxes.
Accumulated Surplus
Accumulated Surplus represents The City’s total net economic resources, both financial and non-financial. It is the sum of net financial performance since The City’s beginning. It’s the equity in The City comprising mainly of the value of infrastructure and equity holdings in Enmax.
The value from this holding cannot be realized as funds to support other areas unless the asset, such as infrastructure (roads, bridges, Enmax) are sold.
This Accumulated Surplus also represents amounts indicated in both the Annual Surplus and Operating Surplus.