Preparations for a five-year operating and capital budget for the Town of Hinton are underway.
Preliminary budget discussions began during the standing committee meeting on Aug. 27 and paved the way for Council to work with administration and review the budget starting in November.
The Municipal Government Act (MGA) requires municipalities to maintain a three to five year budget outlook going forward.
As stated in the MGA Municipal Corporate Planning Guide, a financial plan can be defined as a rolling, multi-year budget that details expenses and anticipated revenues over the specified budget period.
A strategic planning session for councillors and administration is set for the end of October.
The MGA states that a multi-year budget saves time and enables local governments to better link strategic goals with financial planning processes that are tied to the annual budget cycle.
“The process for all budget is that we work together as an administration and take into consideration what comes out of strategic planning and bring you the first draft budget. The earlier we have strategic planning done, and if we bring you a first draft at the end of October it’s very beneficial because then you will have had your opportunity to have residents influence you and you influence the budget through the strategic budget session,” said Carla Fox, director of corporate services.
Coun. Dewly Nelson made a direction early on in the meeting to schedule a meeting between council and the Hinton and District Chamber of Commerce prior to council’s strategic planning session.
Other councillors agreed as long as they would be open to meeting with other non-profit organizations if they were to be approached.
“We have a great tool within our municipality and our Chamber of Commerce that is really tuned into a big chunk of our community,” said Nelson on discussing upcoming opportunities and challenges.
Nelson also brought up the possibility of hosting a town hall meeting prior to the strategic planning session to hear from citizens and what that would cost.
“It’s incredibly difficult to be fully prepared for an open across-the-board question and answer session where the citizens asking the questions are able to be provided with accurate answers off the top of anybody’s head,” commented Coun. Albert Ostashek.
After some back and forth between council and administration on changing the public engagement strategy they agreed to bring back a report outlining the costs and strategies involved in hosting a town hall and other potential engagement strategies.
Beyond the public engagement and strategic planning session, each department head within the town’s administration will present their budget to council.
The hope of CAO Martin Taylor is that through this new process the budget will be done by Dec. 1.
“It’s going to be very different for directors and managers. The directors are going to present me the budget, like a mock budget presentation. And if they don’t know it, they don’t have it, it gets punted. I’m going to do away with this one time operational thing, I’ve never seen that before and I’ve worked in eight municipalities. It’s either going to be operational or capital,” said Taylor. He added that funding for one-time projects has drawn down reserves over the years, and that these funds need to be found within the budget.
All financial and capital plans will be presented and approved by Council each year, giving an opportunity to adjust future forecasted expenditures.
Last year, council approved a 4.4 per cent taxation increase, which included a two per cent allocation each year to a recreation centre replacement reserve fund.
The Tax Levy Bylaw was then adopted on May 7, 2019 to raise general municipal taxation in support of the operating budget of $31,416,646, but the revenue increase estimated from the property reassessments came to a total of $510,000. An increase of this magnitude was not anticipated during budget preparation, and Council requested that a decision in regard to the surplus be put on hold until September 2019.
“My concern right now is that we have 25 appeals. Until those appeals are decided we aren’t certain on the total surplus. The surplus is there because of the additional changes that were made to a number of different areas, we can’t be certain that those won’t be overturned,” said Fox.
Fox added that if council decided on a zero per cent tax rate increase this year, they might have an extra $510,000 approximately in the budget to work with.
“That would mean about 4.7 per cent tax equivalent,” said Fox.
Administration is also working on a rudimentary service level review to anticipate what the Town’s current service levels are and what resources and assets are used in delivering each service to the Town, explained Fox.
The Service Level approach will be used in presenting budgets to Council and each department head will present their departmental budgets, current status, future requirements, and total increase or decrease in taxation required.
Council will have an opportunity to question each director on the current level of service and provide direction. Once each service has been presented and reviewed with Council, the directors will take the feedback and prepare a revised budget for Council’s approval.
This process will determine what percentage increase or decrease will be required to overall property taxation and Council will have final approval.
Council will get the opportunity to set new strategic direction for the Town which provides guidance into the budgeting process during the strategic planning session in October.