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M.D. looks to financial future with operating and capital plans
Posted on January 15, 2020 by Taber TimesPoll
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By Cole Parkinson
Taber Times
cparkinson@tabertimes.com
As part of budget discussions for the Municipal District of Taber, they had to have operating and capital plans for the next few years.
The three year operating and five-year capital plans would ensure the M.D. ‘is not only prepared for the projected activities and service levels but that the costs of these activities are planned in a fiscally responsible manner.’
“Municipal Government Act requires each municipality to prepare a written plan respecting its anticipated financial operations over a period of at least the next three years,” states the M.D. operating plan.
Starting with the operating plan, Badura explained how they came to the projected numbers over the next three years.
“Included in the forecast and operating plan, we have included a growth factor of one per cent in all municipal assessment. As well, we have included the same mill rate increases as inflation so two per cent mill rate increase each year for the next three years for residential, non-residential and nine per cent each of the three years for farmland, just like in the 2020 budget,” explained Bryan Badura, director of corporate services at council’s regular meeting on Dec. 10.
Forecasted budget revenues in the operating plan are slated at $20,850,899 in 2021, $21,433,622 in 2022 and $22,034,902 in 2023.
While expenses are $20,900,863 in 2021, $21,217,507 in 2022 and $21,827,447 in 2023.
Due to council’s decision to have a 1.5 per cent increase in cost of living in the 2020 interim budget, those forecasted figures would see slight amendments.
With the increase of two per cent for residential and non-residential properties and a nine per cent increase to farmland property, those figures would continue in the years following, which concerned some on council.
“As a council, I think we want to make sure that when we are raising taxes, whether it is to offset cost of living or whether it is to maintain service levels, it makes me anxious when I see the increases,” stated Coun. Tamara Miyanaga.
While there is a projected deficit in 2020, it is forecasted to subside in several years, if assessment takes a good turn for the M.D.
“As shown above, there is a projected deficit in 2020. However, this will change when the final assessment and tax information becomes available. Should the municipality’s assessment increase, it will reduce or eliminate the deficit. If there are no assessment increases (or perhaps there are decreases), the municipality will have to either try to further reduce operating costs, try to find increases in operating revenues, use reserves, and/or increase tax rates to eliminate the operating deficit. Since this information is not known at this time, the deficit is shown here until the municipality can determine the appropriate course of action,” states the plan.
As far as the capital plan sees total capital acquired in $9,480,230 in 2020, $7,691,230 in 2021, $6,566,230 in 2022, $6,808,230, $7,543,230 and $7,918,230 in 2025.
With the Municipal Sustainability Initiative (MSI) seeing decreases in the coming years, council questioned how much of that funding would be coming.
“Included in the capital budget is the projects that have been identified so we don’t necessarily include all of the funds received each year by the municipality. However, as those funds are received, they are included in differed revenue until they are spent on projects. So, under the capital side of the plant, we have cost of projects identified and if they are a project that we could use MSI,” said Badura. “We did get the numbers in, I think they were a little more than we were expecting in our budgeted figures of our annual MSI allocation.”
As far as these plans go, Badura also explained they would only be brought back to council once a year.
A motion was made to approve the 2021-2023 operating plan and 2021-2025 capital plan as amended was carried.
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