During the October 19, 2021 Committee of the Whole Meeting, Council recommended to Staff guidelines to develop the 2022 Operational Budget. The budget guidelines provide Staff principles on how the operational budget should be prepared based on service level expectations. The Guidelines reflect known obligations such as legislative or contractual increases, asset management, service levels, fees, utilities, new services, reserves, RCMP and grant-in-aid.
The recommended 2022 Budget Guidelines:
Guideline 1 - Inflation
The published BC Consumer Price Index (CPI) increase was 3.5% over the previous year (2020) (as of August 31, 2021). All energy prices have increased, most input prices have increased over the past year.
Guideline 2 – Non Market Change increase
Non-Market Change (NMC) is the increase in the tax assessment base (e.g. new homes, businesses and improvements) which is new taxation. The estimated NMC by BC Assessment indicates about a 1.0% increase. This new taxation will be used to offset inflationary increases.
Guideline 3 - Asset Management
The 2021 - 2025 Five Year Financial Plan has $30,000 infrastructure replacement reserve taxation in 2022. This was established to build financial reserves for asset management (infrastructure replacement projects). The planned Road Replacement Program requires continued reserve contributions.
Guideline 4 – Service Levels
That the 2022 Budget be developed based on existing service levels, unless specific areas are identified by Council for review.
Guideline 5 – User Fees
That the 2022 budget be developed utilizing an increase in user fess that aligns with inflation and is comparative to other like sized communities.
Guideline 6 – Utility Rates
That 2022 utility rates in the existing Utility Rates Bylaw be used unless specific issues are identified which require adjustment. There are no known reasons for change at this time by Staff. Utility rate increases in the Bylaws are 2.6% for residential water and 5.0% for residential sewer. The rates increase include accommodation for utility asset management considerations. The solid waste fees for 2022 may need to be reduced given that the service was supposed to start this October instead of next spring.
Guideline 7 – New Service Requests
That all requests for funding of new ongoing program items for the 2022 Budget be separately presented for consideration by Council as “New Items” to be funded only through consideration of each request.
Guideline 8 – Reserves and Surpluses
The use of reserves and surpluses is an integral part of the budget planning process. Prudent use of reserves mitigates fluctuations in taxation and assists in stabilizing the uneven spend on project and capital.
Guideline 9 – Balanced Budget
The 2022 to 2026 Five year Financial Plan is balanced such that revenues, expenses and reserve flows are balanced to zero each year.
Guideline 10 – RCMP Budget
The RCMP has finalized a collective agreement with its service members. The settlement included a significant increase in wages which is not fully reflected in the current budget guidance provided by the RCMP. There will most likely be a required tax increase above inflation for policing but the information to quantify the amount is not yet available. The communication is expected by the end of October.
Guideline 11 – Grants in Aid
That Grant in Aid Funding be reviewed and discussed by Council before final approval.