FINANCIAL PLANNING TARGETS
A report to identify financial planning targets and priorities for the upcoming 2024-2028 budget cycle.
TOWN OF VIEW ROYAL
COMMITTEE OF THE WHOLE REPORT
TO: Committee of the Whole DATE: November 7, 2023 FROM: D. Christenson, Dir. Finance & Technology MEETING DATE: November 14, 2023
FINANCIAL PLANNING TARGETS
RECOMMENDATION:
THAT the Committee identify financial planning targets and priorities for the upcoming 2024-2028 Financial Planning process.
ACTING CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To identify financial planning targets to guide the preparation of the 2024-2028 Financial Plan.
BACKGROUND DISCUSSION:
The annual financial planning process includes an opportunity for Council to discuss targets and priorities that will help staff prepare a draft budget document that aligns with Council's intentions as far as possible without further guidance.
At the conclusion of the 2023-2027 Financial Planning process, the estimated implication for the 2024 budget was an approximate 10.8% overall tax increase, and an average of 7.4% per year thereafter. A portion of these increases will be borne by increased assessments as a result of new construction, which will be estimated during the development of the financial plan.
The table below illustrates View Royal’s general municipal property tax revenue requirement for the years 2023 and 2024, as approved in the 2023-2027 Financial Plan, segregated by amounts allocated to operating budgets and reserve contributions, with 2022 amounts for comparison. These amounts do not include financial implications of new information received since adoption of the financial plan bylaw in May 2023.
| Tax funding allocation | 2022 Budget | 2023 Budget | % Chg 2022-2023 | 2024 Budget | % Chg 2023-2024 |
|---|---|---|---|---|---|
| Operating budgets | |||||
| General Government Services | 969,823 | 1,314,599 | 1,499,525 | ||
| Protective Services | 3,859,268 | 4,253,851 | 4,636,624 | ||
| Transportation Services | 2,826,264 | 2,871,975 | 3,023,945 | ||
| Development Services | 361,799 | 402,008 | 413,204 | ||
| Parks Services | 774,090 | 833,462 | 870,814 | ||
| Recreation & Culture Services | 564,576 | 603,714 | 690,160 | ||
| Debt | 365,534 | 365,534 | 365,534 | ||
| 9,721,354 | 10,645,143 | 9.5% | 11,499,806 | 8.0% | |
| Reserve contributions | |||||
| Capital Works and Land | 0 | 0 | 61,000 | ||
| Capital Renewal | 200,000 | 200,000 | 210,000 | ||
| Future Operating Expense | 100,000 | 100,000 | 104,000 | ||
| Parks Improvements | 105,000 | 105,000 | 127,500 | ||
| Police Operating | 17,000 | 117,000 | 217,000 | ||
| All other reserves | 97,500 | 97,500 | 97,500 | ||
| 519,500 | 619,500 | 0.2% | 817,000 | 0.3% | |
| Total taxation requirement | 10,240,854 | 11,264,643 | 10.0% | 12,316,806 | 9.3% |
| Taxation requirement reductions | |||||
| Draw from surplus for reserve contributions | (228,000) | (150,000) | 0 | ||
| Total taxation requirement* | $10,012,854 | $11,114,643 | 11.0% | $12,316,806 | 10.8% |
* Funded by existing and new property assessments
The Committee has several options to set financial targets for the next budget cycle and each option has implications for current or future service levels and financial sustainability. These include, but are not limited to, the following:
| Option | Pro | Con |
|---|---|---|
| Reduce services or service levels | Cost savings | Degradation or elimination of desired service or service level |
| Reduce reserve contributions | Deferral of future costs | Increased future volatility in taxation |
| Increase draw from surplus | Decreased short-term volatility in taxation | Not sustainable |
| Increase reliance on Casino revenue for operating | Decreased short-term volatility in taxation | Not sustainable |
Council may consider any of the listed options in any combination and any other option not listed here. While preparing the draft 2024-2028 Financial Plan, staff will be guided by Council’s direction and indication of priorities. Unless directed otherwise, staff will prepare the draft budget under the assumption that current levels of services will be supported, with no substantial change in planned reserve contributions, draw from surplus or reliance on Casino revenue for operating.
RECOMMENDATION:
THAT the Committee identify financial planning targets and priorities for the upcoming 2024-2028 Financial Planning process.
SUBMITTED BY: D. Christenson, Director of Finance
REVIEWED BY: S. Jones, Acting Chief Administrative Officer
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