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  • Town Council

Budget

Approved budget focuses on quality of place

The 2019 budget, approved at the December 10 Council meeting, focuses on investing in quality of place to create inclusivity and diversity in the town.

“The budget represents multiple-year planning and efficiencies that will advance Council’s strategic vision while maintaining service levels and enhancing our citizens’ quality of place,” said Mayor Bill Robertson. “This budget is part of a solid foundation to support citizens and families in a recovering economy and to provide certainty to business and industry to create prosperity and jobs.”

Local transit, supporting affordable housing and upgrading the wastewater treatment plant are significant projects for 2019 that reflect priorities identified through community input from many public participation activities.

“Council voted for a 2 percent tax increase. The original recommendation was for administration to budget for a 3 per cent tax increase and they were able to propose a 2.5 per cent tax increase to the Finance and Audit Committee,” said Ed Sands, chair of the Finance and Audit Committee. “Council actually reduced that even further to 2 percent, which is a 33 per cent reduction from the original recommendation."

  • The approved budget includes $58.9 million for operations and $28.6 million for capital expenditures, including $20.8 for 2019 capital projects and $7.8 in multi-year projects.
  • The budget will raise an additional $2.2 million in revenue to support services and sustainability while also preparing Okotoks for future growth.
  • For the average residential homeowner with an assessed value of $450,000 the overall effect is projected to be $45 per year or $3.75 per month. 

This short video illustrates how the Town develops the municipal budget each year:

 

More Information
2019 Capital & Operating Budgets Q&A

What is the difference between a capital budget and an operating budget?

The capital budget allocates funds needed for the first year of a 10-year capital plan and multi-year projects beginning in 2019. It is how the Town pays for major projects such as streets; building and improving public facilities such as recreation facilities and parks; dealing with growth pressures; and new initiatives. The only projects approved by Council are those planned for 2019, multi-year projects beginning in 2019, or projects in need of additional funding in 2019. These costs are similar to how a household would prepare for building a new home or adding an addition to your home this year. This includes items like major equipment, buildings and infrastructure.

The operating budget shows the day-to-day costs of delivering programs and services and running Town facilities for the next year. These costs are similar to your everyday household expenses such as mortgage payments, repairs and maintenance, utilities or groceries.  The operating budget considers things such as gas and fuel, heating and electricity bills along with employees to provide Town services. The annual operating budget provides a financial representation of the Town’s plans to deliver municipal services and programs.

Capital Budget

How is the Town funding its 2019 Capital Budget?

 The 2019 capital budget of $19M is being  funded by  funded by offsite levies (developer paid) and debt servicing of 8.9M, $5.5M will be funded by Town reserves and $4.6M will be funded from grants.  In 2019 we will also have projects that are multi-year projects totalling $7.8M that council has approved. This means the total capital budget will be $26.8M. There are approximately $7.6M in projects that will carry forward from previous year approvals.

How is the capital budget structured?

The budget shows the total capital expenditures for 2019. It also outlines the funding sources for proposed capital projects including off site levies, reserves, grants and debt.          

What are the top 5 major capital projects for 2019 in $Ms

Wastewater Treatment Plant                      $   7.15

Affordable Housing                                       $   3.25

Zone3N/4N Reservoir Upgrade                   $   2.15

Local Transit                                                   $     1.4

Snow Dump Land and Development         $   1.00

How is debt used?
Using debt to finance capital spending is a practice most businesses and homeowners use. Debt financing is just like mortgages, vehicle loans, and other borrowing tools, that provide the financial capacity to allow borrowers to pay for significant investments over time, as use occurs, instead of saving to pay the entire amount up front.

If Council approves the capital budget in December, does that mean all projects listed are automatically approved?
Council approved a capital budget for 2019 that allows for current year and multi-year projects that are planned to start in 2019 and beyond; some require more than one year to complete.  Projects shown beyond 2019 in the capital financial plan section are provided as forecasted and are accepted as information and will updated on an annual bases to ensure alignment with updated economic conditions and priorities.

What is the approval process for the 2019 budget and 10-year capital financial plan?

Each year in November, Council reviews the expenditure requirements for projects proposed in the capital budget. They consider the following options for each project:

  1. approve as proposed;
  2. change timing;
  3. change scope; or
  4. remove entirely

Council will approve the 2020-2028 Capital Plan forecast as information. This allows the flexibility for administration to adjust the priorities outlined in the plan based on community need and project funding and then present an updated plan.

Operating Budget

How is the operating budget structured?

The operating budget shows the expenditures for 2019.  We also have a forecast for the next four years (2020-2023) of anticipated operational expenditures. 

How is the operating budget funded?
The operating or current budget is primarily funded from property taxes, though it can also include revenues received from:

  • earnings on our investments
  • senior government subsidies such as the provincial gas tax
  • reserves and grants
  • user fees and charges such as recreation fees, business licenses and building permits
  • franchise fees

Why did the Town increase Franchise Fees?

The Province approved the Town’s request to increase Franchise Fees, effective January 1, 2019 and Council approved these recommendations. Franchise fees are charged to utility providers for the right to access Town land to provide the utility. The fees compensate the Town for direct costs, restrictions on planning and development due to utility rights of way, as well as inherent risks related to utility access.

January 1, 2017

Fortis 10%

Jan 1, 2019

NEW 18%

January 1, 1975  

Atco 5.25%

Method C = cost of gas  

Jan 1, 2019

NEW 16%

Method A = c​ost to deliver the gas

What are the changes to municipal taxes in 2019?
The proposed changes include a 2% tax increase which equates to $3.75 per month for a typical dwelling with an assessed value of $450,000.

What are the changes to fees in 2019?
There is a proposed 3.88% average increase for water, sewer, storm and waste fees and a 3% increase for recreation fees and facility rentals.

10 Year Financial Plan

What is the 10-year Capital Financial Plan?

This is the second year the Town has completed a 10-year capital plan, which forecasts estimated future capital costs for 2020 to 2028. Our capital financial plan is similar to your household plan to prepare to save up to purchase a new vehicle or plan major home renovations in the future. 

The estimates outlined in the capital financial plan are placeholder values for the funding expected to be required in each of the nine years. By creating this long-term plan, the Town can better manage finances to prepare for future expenses and tailor projects to meet the changing needs of the community.

Just like a household budget, the plan is a forecast of anticipated costs, which can alter based on trends.  Impacts like grant funding, interest rates and inflation, economic conditions, rates of land consumption and growth will all be indicators that may require an adjustment to the plan. Council will still review and approve a yearly capital budget that will direct actual spending for that year.
 

How does the 10 year Capital Financial Plan help Okotoks prepare for the future?

The 2020-2028 Capital Financial Plan is about planning for the future ensuring we have a balance between the pressures of current service and growth. The capital plan will focus on investing in infrastructure in alignment with the Town’s strategic and sustainable priorities.

Having placeholders in the capital plan will allow us to understand the capital cost of infrastructure, the impacts of the capital budget on the operating budget, and plan for community amenities and potential grant and sponsorship opportunities.

What are the biggest budget challenges Okotoks is facing?

One of the key challenges that all Alberta municipalities are facing for future planning is the province’s decision to end the Municipal Sustainability Initiative (MSI) grant in 2021, which represents a significant funding source. The 2019 budget considers this future loss in revenue and the Town will be starting a grant review and developing a strategy to align off-site levies’ financial realities to ensure alternate funding opportunities are maximized.

If the 10 Year Capital Plan is approved does that mean that all the projects in the plan are automatically approved?

The projections in the 2020-2028 Capital Plan are intended as estimated placeholders and are not approved as part of the capital budget. These amounts are very preliminary and are used as a planning tool that shows order of magnitude, not budget specifics.

Watch for opportunities to provide feedback for the 2020 budget later in 2019 at www.okotoks.ca/consultation

2019 Budget Summary

Click below to see the summary of the 2019 budget:

2019 Budget Summary

Summary

2018 Budget Summary

Summary

 

 

2019 Budget PowerPoint Presentation

Click below to view the 2019 Budget PowerPoint Presentation

2019 BUDGET PRESENTATION

Click below to view the 2018 Budget PowerPoint Presentation

2018 Budget Presentation

Financial Indicator Graph Highlights & Graphs

Financial Indicator Graphs show that Okotoks continues to be fiscally responsible

Okotoks continues to be fiscally responsible with lower than median taxes and expenditures, while maintaining high levels of service and quality of life for its residents, according to the 2017 Financial Indicator Graphs prepared by Alberta Municipal Affairs.

The financial indicator graphs are intended to serve as a tool that may assist council and administration with operational decisions. The comparative measures may be useful in assessing past performance and for budget planning. Each municipality is compared to a group of similar size urban municipalities, or to rural municipalities with similar tax base. The comparison group is shown on the last slide.
 
Custom graphs can be created comparing your municipality to other Alberta municipalities.
 
Financial Advisory Services is available to assist you in interpreting the information contained in the graphs. Please be aware that advisors will not have access to any of the custom graphs you create, but would still be able to assist with the underlying formulas and data used to create all graphs.
 
It should be noted that that the financial indicator graphs are point-in-time documents. The system is updated daily as new information is added to the municipal financial database. As such graphs will reflect the current data set and the results will be subject to change as the database is updated and verified. However, most information from the previous reporting year will have been posted by the fall of the subsequent year.
 
Other points to note are:
  • The range for most of the graphs is 2012 to 2017.
  • Caution should be used when interpreting results as each municipality has unique characteristics affecting how it compares to the group. Also, circumstances may have changed since the December 31, 2017 reporting date.

2017 FINANCIAL INDICATOR GRAPHS

The 2016 Financial Indicator Graphs are also available for review:
2019 Budget News Release
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