Rocky View County’s Budget Highlights – “2010-2012 Budget provides resources to meet Councils objectives set out in the Strategic Plan”, “Programs currently provided by the County will be maintained unless adjustments are directed by Council”, “… 2010 Base Budget forms the basis for expense and revenue assumptions in 2011 and 2012”, and “… Municipal tax increase assumptions have been included in 2010, 2011, and 2012 operating budgets.”
Most citizens find the language in the County budget obtuse and confusing, In fact, until a person digs through the particulars of the budget, the highlights can often be misinterpreted. To figure out where and how tax dollars are spent and allocated requires reading the entire budget in context. The County’s budget presents the services the County intends to provide in the upcoming year(s), it also indicates where the County plans on getting the money to pay for such services.
Rocky View County has two budgets: the Operating Budget and the Capital Budget. The Operating Budget is used to pay the daily operating expenses of running the County, which includes: road maintenance, water treatment & distribution, sewage collection & treatment, fire prevention & suppression, bylaw enforcement, communications, media relations, approval or permits and inspections, etc. The Capital Budget is used to fund one-time cost items, necessary for the County to provide long-term services, which include: construction and repair projects, purchasing land, buildings, equipment, etc.
It is important to note that not only is each budget used for different types of expenditures, but each budget is funded by different sources. The Operating Budget is primarily funded by property taxes (approximately $43.6 M – 57% 2010 Operating Budget) while the Capital Budget is primarily funded by government grants (approximately 24.5% – 2010 Capital Budget) and debt financing (approximately 62.2% – 2010 Capital Budget).
Both the Operating Budget and the Capital Budget have two sub-categories, Base Budget and New Initiatives. The Base Budget allots funding for items that have already been approved by Council. The New Initiatives category project costs for future service enhancements that have
not yet been approved by Council. New Initiatives category, whether pertaining to the Operating Budget or the Capital Budget, are only proposals and still require approval by Council. There are five categories of proposed funding for New Initiatives: Special Tax Support, General Tax Support, MSI (Municipal Sustainability Initiative), Reserves, and Unfunded. All New Initiatives that are listed under the “Unfunded” category will not proceed until funding source has been identified.
Budget Structure:
- Base
- New Initiatives (STS,GTS,MSI,R,U)
Operating Budget:
- day-to-day operations (provided and must be paid)
- proposed ongoing items (for day-to-day operations)
Capital Budget
- one-time cost items (provided and must be paid)
- proposed one-time cost items (to provide for long-term service)
In the last issue of Living in Langdon, February 2010, three questions were asked about the 2010-2012 Draft Budget:
(1) Why do councillors need to spend $15,000 on a electronic voting system? (see page 29, 2010-2012 Draft Budget)
This item is a 2010 Operating Initiative currently listed an Unfunded, so this item does not form part of the Base. In fact, until a funding source is determined, this initiative will not proceed to Council for approval. The why is a more problematic question. Electronic voting systems have been quite a controversial topic in recent years. A number of issues have arisen when used, such
as: inaccurate counting, privacy, selective accessibility, etc. However, usually the rationale behind adopting almost any electronic voting system is to provide voters with a range of convenient options to exercise their vote, enhance voter participation, and drastically reduce costs of running an election. There are many different electronic voting systems on the market and a quick internet search can provide numerous articles of the benefits and drawbacks of many different commercially available systems.
(2) Why does the County not have a system that allows them to track the cost of services, at least by district, if not by community?
As with electronic voting systems, there are numerous accounting software packages on the market that are specifically designed for Municipalities (County). Most of these types of accounting software packages allow for the integration and processing of all financial transactions for a Municipality, such as: property taxation & information, business licence, animal licensing, utility billing, point of sale cash receipt, building and development permits, work management, code enforcement, etc. However, it still all depends on the particular software that a Municipality chooses and how much the software will allow the Municipality to drill-down into the data to get specific cost items for a particular geographical area. It is also important to note that although the software technology is available the Municipality (County) would still need to organize their entire region into cost-able zones.
(3) Why is it ok to add $22M to our already $58M Municipal Debt (Debt Financing under Revenue on page 12 of the 2010-2012 Draft Budget)?
Generally a municipality or county will issue municipal bonds to raise funds to pay for large
expenditure projects that exceed the currently available funding, or the project costs so much that it would delay other planned projects. By selling municipal bonds, the county can obtain an immediate influx of cash from the sale proceeds of bonds and in turn, use the cash to pay for the particular project. The County then would make principal and interest payments on those bonds until the bond matures and is paid off at some future date.
The additional $22 million that Rocky View County has in the Base-Capital Budget relates to the Water Treatment Facility that the County is completing in the Balzac area. The County has a few options when it comes to financing: selling bonds directly to the public, obtaining financing through ACFA (Alberta Capital Finance Authority), or securing financing from a commercial bank. Most often municipalities will choose the financing option which offers the lowest interest rates, however, it all depends on their credit rating.
The Budget may be viewed as a complex and confusing document, however, once the structure of the document is understood and the entire Budget is read in context, a better and deeper understanding is gained as to how Rocky View allocates its spending.
