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Town of Oliver to consider 2021 operating budget

The proposed budget being presented to Council includes the third year of the 9% tax increase that is being allocated to Capital Works.

During the 2020 budget deliberations, Council made the decision to eliminate the 9% tax increase for Covid-19 relief measures. The 9% tax increase equates to approximately $426k for use in 2021 Capital Works (2018=$128.6k / 2019=$135k / 2020=$NIL / 2021=162.3).

The taxation component of the budget does not contain any increase for inflation. Included in the tax revenue requirement is the Non Market Change increase of $12k or 0.6% in 2021.

When looking at future sustainability and long term planning Council is continually asked to strike a balance between service levels and taxation. It is staffs role to ensure that Council is presented with all operational and capital issues that will affect  the Town in the next five to ten year window. Therefore,
Council can plan a financial strategy moving forward.

Operating Budget – The draft general fund budget process has incorporated zero based budgeting. Each item in the budget has been scrutinized by staff. The 2021 budgeted property tax revenues have been based on 2020 actual amounts and takes into account the 9% tax increase for expected RCMP costs when the Town reaches the population of 5,000. This is anticipated to occur when the 2021 Census data is updated with estimated expenditures occurring in 2023.

Future Debt Obligations – This is the projected debt servicing  payments that will be need to be incurred for capital projects over the next 5 years.

Organizational:
Financial: Five Year Financial Plan must be adopted prior to Tax Rates Bylaw being adopted.
Legal/Statutory Authority: Community Charter S165 & S166
Strategic Plan: Good Governance

BACKGROUND:

At the conclusion of budget deliberations for 2020, Council directed staff to prepare a Financial Plan Process Policy which was approved on February 24, 2020 and established a baseline budget. The baseline budget reflects the resources required to provide the same level of service in the current year, before any new priorities or funding requests. Base budget expenditures are identified as core to the provisions of services to the Town of Oliver. The following is an excerpt from the Financial Plan Process

Policy:
Expenditures listed below will be considered as base budget items and will not be reviewed by Council
on an annual basis.

1. Wages & benefits – existing staff
2. Insurance – Property, liability, vehicle
3. Utility budgets – power, water, sewer, natural gas
4. Gasoline & diesel – based upon current market prices
5. Fleet Maintenance – gas, labor, repairs
6. Contracts for Services – solid waste, tourism, employment, RDOS mapping

Budgetary items listed as Non Base Budget items will be reviewed and will not include any adjustments for inflation. New priorities pertain to any material change in service level from the prior year and must be accompanied by business plan documentation to substantiate the change.

In 2018 and 2019 Council adopted 9% tax increases. These increases were applied towards capital projects. In effect what has occurred in the operating budget of the Town of Oliver is a zero percent increase since 2017. The only taxation growth that has occurred is Non Market Change. This growth has been further reduced by 50% as the Non Market Change increase has been transferred to the Policing Reserve.

The impact of the zero percent increase in operating expenditures has continually challenged staff to be creative and continue to be as effective, efficient and economical as possible.

In 2023, the funds will shift from being allocated to capital projects to the operating fund to offset potential policing costs. During the 2020 budget deliberations, Council made the decision to eliminate the 9% tax increase for Covid-19 relief measures.

The 2021 budgeted property tax revenues have been based on 2020 actual amounts and takes into account the 9% tax increase for expected RCMP costs when the Town reaches a population of 5,000. This is anticipated to occur when the 2021 Census data is updated.