Budget

2020 budget focuses on creating opportunities

Okotoks, AB: Council approved the 2020 budget, which maintains service levels and creates opportunities for Okotoks within a two per cent tax increase.

“We considered the current economic climate as well as public feedback, which indicated that service levels should be maintained,” said Mayor Bill Robertson. “The budget reflects administration’s efforts to create efficiencies and opportunities for us to move forward on Council’s vision.”

The approved budget includes $62.3 million for operations and $17.95 million for capital expenditures. For the average residential homeowner with an assessed value of $450,000 the overall effect is projected to be approximately $46 per year or $3.86 per month.

The budget also introduced an aggregate increase of 2.39% across utilities (water, sanitary sewer, storm, and waste management) for 2020. For the average customer, this amounts to an increase of $5.77 per bi-monthly billing period or $34.62 per year.

Initiatives include $0.720 million for the first full year of Okotoks Transit, a local, on-demand, curb-to-curb service. Resources have also been allocated to hire additional firefighters to enhance community safety, and to reduce red tape for businesses, which will create opportunities to spark further investment in the community. Capital funding was confirmed to construct the new Arts & Learning Campus, which leverages important partnerships with Bow Valley College, Community Futures and local school divisions and includes a public library expansion. Funding for improvements to the wastewater treatment plant was also allocated in the capital budget.

“Initially, the draft 2020 Budget was presented to a joint Finance and Audit Committee and Council during 2.5 days in November where they recommended a property tax increase of three percent,” said Ed Sands, finance and audit committee chair. “At the December 9 regular meeting, Council identified additional efficiencies, which allowed for a lower property tax increase.”

The Town of Okotoks has been recognized for being fiscally conservative by two external sources. The Canadian Federation of Independent Business (CFIB) recently ranked Okotoks as the second most fiscally responsible Alberta municipality for operating spending in 2017, and the 2018 Financial Indicator Graphs, prepared by the Alberta Municipal Affairs, indicated that Okotoks continues to trend below the comparable group median for net municipal property tax rates for the last six years.

“The 2020 budget demonstrates the financially responsible direction Council has set to ensure that our community is well-positioned for the future by working towards initiatives outlined in our strategic plan, while continuing to provide the high service level our citizens have come to expect.” said Robertson.

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

More Information
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. 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 2020, multi-year projects beginning in 2020, or projects in need of additional funding in 2020. 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 does the Town fund its Capital Budget?

The 2020 capital budget is funded by  offsite levies (developer paid) and debt servicing will be funded by Town reserves and grants.  In 2020 we will also have projects that are multi-year projects that council has approved.   

How is the capital budget structured?

The budget shows the total capital expenditures for 2020. It also outlines the funding sources for proposed capital projects including off site levies, reserves, grants and debt.          

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 2020 that allows for current year and multi-year projects that are planned to start in 2020 and beyond; some require more than one year to complete.  Projects shown beyond 2020 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 2020 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 2021-2029 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 2020.  We also have a forecast for the next four years (2021-2024) 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

What are the changes to municipal taxes in 2020?
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 2020?
There is a proposed 2.39% 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 2021 to 2029. 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 2021-2029 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 2020 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 2021-2029 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.
 

Budget Summary Fact Sheets

2020 Budget Summary

Summary

2019 Budget Summary

Summary

2018 Budget Summary

Summary

 

 

Budget PowerPoint Presentation

Click below to review the 2020 Budget PowerPoint Presentation

2020 Budget 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

Regional Comparisons

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 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:
  • 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 reporting date.

2018 Financial Indicator Graphs

2017 FINANCIAL INDICATOR GRAPHS

2016 Financial Indicator Graphs

City of Calgary 2018 Residential Property Taxes and Utility Charges Survey

City of Calgary 2018 Residential Property Taxes and Utility Charges Survey 

This year’s survey of participating Canadian municipalities contains information on the 2018 taxation year. Participating Canadian
municipalities responded to the survey via e-mail. This publication includes all survey responses. Some participating municipalities chose not to answer some questions, and in some instances, the City of Calgary had to supplement information from public sources like the Alberta 2018 Education Property Tax Requisitions. As such, there may be different numbers of participants for each table and graph contained in this report.

Read the report

Municipal Spending Watch Report

Municipal Spending Watch Report

This year’s edition of the Alberta Municipal Spending Watch Report marks the 10-year anniversary of the Canadian Federation of Independent Business (CFIB) tracking and analyzing spending trends of Alberta’s municipalities.

This edition of the Alberta Municipal Spending Watch Report also places municipal spending trends in context with
another trend that has emerged —that of municipal hiring.  Municipal spending and hiring are intertwined, and therefore
reviewing municipal hiring as an area for improvement is an effective way to review overall municipal operating spending.

Read the report 

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