Coun. Dawn Luhning appreciates how a proposed budgeting policy for Moose Jaw could see the budget finished before a new calendar year begins.
“I have tried over years to try and pull it forward because there were years where it was approved in May and late April,” she chuckled.
There were times when she attended Saskatchewan Urban Municipalities Association (SUMA) conferences in December and other delegates asked her how Moose Jaw’s budget looked. Her reply was the municipality hadn’t even started talking about it; meanwhile, other communities had already finished putting together their finances.
“I think that is one of the best parts about this policy because I have always wondered how we can be in the calendar year and still not have a budget in place,” she added. “So I’m happy about that.”
During its June 24 executive committee meeting, city council voted 6-1 on a recommendation to approve a draft budgeting policy and have it inserted into the City Administration Bylaw so it can return to council for final approval.
Coun. Brian Swanson was opposed.
Background
The municipality annually prepares operating, capital, and equipment budgets, with the process usually starting in September. The budgets are delivered to council by late December, explained Brian Acker, director of financial services. Council discussions then begin in January, with approvals ranging from February to April.
A detailed budget document provides information on the operating and capital plan and is summarized in about 125 pages, compared to previous budget packages of 494 pages, he continued.
By having the budget in place before the start of the fiscal year, city administration can monitor the actual performance of the budget from the beginning of the fiscal year, Acker added. This gives more opportunity to correct budget deviations.
Council discussions
City administration would leave it up to council to determine a schedule to discuss the budget in an election year, Acker told Coun. Heather Eby. Council could be discussing the budget when a municipal election occurs; councillors would have to give administration direction on how to proceed.
Third parties or delegations would have the opportunity to interact with council during budget discussions, especially about their own organizational budgets, Acker told Coun. Chris Warren. Those organizations could also put forward requests for items they would like to see in the budget.
Coun. Scott McMann was concerned about any borrowing the municipality might do, especially with an expected rate of return. He pointed out it would be three to five years before council received a maximum return on some of its investments. He wondered if it was fair if council borrowed from itself from the next year.
It depends upon which financial pool council draws, said Acker. The anticipated — and potential — rate of return from pulling from a mid-term pool is 4.25 per cent, while the rate of return from a long-term pool is six per cent. Administration would determine what makes economic sense.
The quarterly variance report also caught McMann’s attention. He thought it best if council received reports on budget variances over 10 per cent instead of one per cent. He was also concerned if every department was over budget by $150,000.
City administration would inform council if there were major overages, Acker said. For example, administration would let council know if the snow budget were to exceed $300,000.
“Ones like that, we do have to clear snow, so we are going to have a deficit in the budget, but council will at least be apprised of it,” he added.
