City Reserves and how they can be used

Reserves are funds set aside for future expenses and to provide financial flexibility for emergencies and budget shortfalls.

Reserves help us invest in the community, manage finances well, and maintain service levels. A balanced approach to planning and using reserves is important for strong financial management and supports The City's strong AA+, AA (high) and Aa1 Stable credit ratings from three globally recognized rating agencies.

Council approves each reserve with a report that details its purpose, conditions, restrictions and funding source. Many of the funds held in reserves are set aside and committed to existing projects and activities until it’s time to spend the funds. They are not extra funds The City Can use for any purpose.

Reserve categories

The City has three types of reserves, each for a different purpose:

  • Operating reserves

    Used to fund operating expenditures for one-time projects, pilot programs; stabilize operating budgets for unanticipated fluctuations in revenues or expenses; comply with contractual agreements; or for operational emergencies. Included is the Fiscal Stability Reserve, 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.

  • Capital reserves

    Used to fund approved capital programs, projects and expenses. Most of these reserves are either fully committed or have substantial commitments against them to finance existing approved projects.

  • Sustainment reserves

    Used to fund both operating and capital expenses for activities that are treated as self-sustaining. Most of these reserves are either fully committed or have substantial commitments to finance existing approved projects.

Committed and uncommitted reserve balances

At the time reserves are reported, they are divided into committed and uncommitted portions.  The committed portion is already planned for specific expenses, while the uncommitted portion isn't yet assigned to any specific use.

While a portion of the money in the reserve isn’t committed to specific expenses, it still must be used according to the reserve’s purpose, conditions, and restrictions.

Reserve amounts and reporting

Public information on reserves and long-term liabilities is important to ensure transparency and accountability. Information and amounts of City reserves is available to Calgarian’s in the City’s Annual Financial Report and Reserves and Long-Term Liabilities Balances reporting.

As reported in the 2024 Reserves and Long-Term Liabilities Balance, as of December 31, 2024, The City had a reserve balance of about $4.2 billion. This money is allocated and committed to 44 different open reserves spread across three reserve types:

  • Operating (approx. 30 per cent)
  • Capital (approx. 46 per cent)
  • Sustainment (approx. 24 per cent)

This is the money The City uses to ensure service levels are delivered and maintained.

The uncommitted reserves balance as of December 31, 2024 was approximately $1.5 billion. While this money is not being used for specific projects, the remaining balance is only available within the defined purpose, conditions, and restrictions of each reserve.

Any Council direction to use uncommitted reserves after January 1 of each year, will lower the uncommitted balance in City reserves as of December 31 the previous year. 

Fiscal Stability Reserve

The Fiscal Stability Reserve (FSR) is a part of the Operating Reserves. It’s often discussed by Council and Calgarians because it serves as a contingency fund for operational emergencies, unplanned  revenue reductions with significant financial impacts, and urgent or contingency capital expenses. The FSR makes up 91 per cent of the uncommitted funds within the Operating Reserves as of December 31, 2024.

The reserve must maintain at least  5 per cent of The City's tax-supported gross expenses (after recoveries) as its minimum balance, while the FSR target balance is set at 15 per cent of The City's tax-supported gross expenses (after recoveries). Council approves any annual tax-supported favourable operating variances to be transferred to the reserve, including any investment income earned on reserve funds. As of Dec 31, 2024:

Transfers into the Fiscal Stability Reserve

The City's operating expenses include services to maintain facilities, infrastructure, equipment, systems, and vehicles. These costs are funded by an operating budget made up of property tax, user fees, and more. The City works to reduce costs, increase revenue, and avoid financial shortfalls. When favourable operating variances happen (meaning there is unspent operating budget at the end of the year), it’s reported to Council and can be used to support Calgarians during budget discussions in November. Any remaining favourable operating variance is transferred to Fiscal Stability Reserve.

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