Town developing 2013 – 2015 municipal budget: understanding the Town budgeting process
Town Council invested three full evenings on Nov. 5, 6 and 7, discussing the draft 2013 – 2015 municipal budget, as prepared by administration. After Council’s requested revisions are made to the proposed budget, it will be brought back to Council for final review and approval on Dec. 10.
What is a Municipal Budget?
A municipal budget is the local government's central nervous system, by which all programs and services are funded. It is a detailed financial plan that specifies the spending required to bring municipal services to the community and to maintain municipal assets.
The budget document and the budgeting process allow Council to make decisions about which services will be provided to residents – and at what cost. It also guides the Town when making decisions about which infrastructure (roads, water or sewer, for examples) repairs can be made in a given year. Ultimately, the budget is used to determine if any increases to the property tax rate or user fees will be required.
The corporate budget is one of the biggest annual undertakings at the Town, identifying Council’s priorities and outlining the exact services, programs and assets that ratepayers will pay for in the coming year. It takes months of planning and hours to prepare, review and finalize what – and where – public tax dollars, provincial grants and transfers and revenues from user charges will be spent. The budget consists of two main parts: operating expenses and capital expenses.
To illustrate the difference, consider how a photocopier may be purchased. The actual purchase of the machine would be a capital expense, whereas the paper, toner, power and maintenance costs, along with the salary of the staff person operating it, would be covered under operating expenses.
These are big-ticket items or assets that are typically long-term in nature - such as land, buildings, roads, pipes and other equipment in excess of $5,000. They are primarily funded from various reserve funds, development charges and grants – rather than from property taxes. Annually, the Town updates a 10-Year capital forecast to foresee and prepare for any extra expenses the municipality may face in the coming years. The Town routinely considers a number of master planning documents during this process.
These expenses cover the day-to-day expenses pertaining to such items as salaries and benefits; programming; supplies; insurance; legal fees; transportation; rent; and repairs.
Understanding the Budget Process
The Town's budget consists of identifying both expenditures and revenues. Approval of the budget is an extensive process, which involves great deliberation and scrutiny. Each fall, administration prepares three-year operating budgets for Council's consideration. Council typically approves one-year and accepts the other two for information. The budgets are first prepared at departmental levels and driven by both overall corporate business plan goals and individual departmental priorities and initiatives. All budgets and supporting documentation are compiled into one master document.
The Town Manager and Senior Leadership Team review the entire budget and determine if any changes are necessary. A draft budget is presented to Council each November, which meets for three evenings of public deliberations (the public is notified about these meetings, at least three weeks in advance, through the local media, the Town’s website and its Social Media tools). The Senior Leadership Team makes adjustments, as directed by Council, which reviews and adopts the final budget and passes the new Tax Rate Bylaw for the coming year in December.
The Town is committed to promoting economic security and equity through the efficient and innovative use of resources that considers the needs of current and future generations. Economic Viability is one of the four core values of the Community Sustainability Plan, which helps guide the Town in its decision-making and planning.