On Monday night, Langley City Council considered giving third reading of our 2024 Budget and Financial Plan. I provided an overview of the proposed ongoing operating budget and capital projects in previous posts. You can also learn more about the plan on the City's website.
One of the first things that Council did was amend the Financial Plan to add $15,000 to the parks capital projects budget to fund replacing two sheds on the Langley Lawn Bowling greens. The City owns this facility and leases it to the Langley Lawn Bowling Club.
Because local governments must have balanced budgets by provincial law, these budgets are generally conservative to reduce the risk of becoming unbalanced and going into deficit. As a result, there are surpluses at the end of the year. The year-end surplus was $900,000 at the end of 2022.
Because City staff are still finalizing the numbers, they can only estimate that the surplus for the end of 2023 will be around $2,000,000. This surplus includes $700,000 from higher-than-expected interest from investments, with the remainder from unfilled job positions. The unfilled job positions included new positions from the 2023 budget, such as additional firefighters and recreation workers, whom the City can only hire part-way through the year as Council typically approves the budget in March. It takes time to hire people. It also includes vacancies due to people moving on from a job or going on leave.
By convention, any surplus has been rolling into the Capital Work Reserve. The Capital Work Reserve is one of the funding sources for capital projects. Other sources include grants from the federal government, the provincial government, and TransLink. These sources also include casino revenue and fees collected from development.
Council had a robust discussion on reducing the proposed property tax increase by 1% this year (about $12 per year for an attached property or $24 per year for a detached property) and using some surplus in place of the proposed 1% infrastructure levy. Money collected from this levy goes into the Capital Work Reserve.
After the discussion, Council decided to leave the infrastructure levy in place, primarily because we have an approximate $10 million per year gap in what we are currently putting into our capital projects budget annually and what we should be putting into the budget annually to complete public safety, water, sewers, parks and roads project identified in various City plans. This gap is growing. City Council is slowly trying to close this gap with an annual infrastructure levy.
This year, our proposed capital projects budget is $25.7 million.
Council Mack and White identified a gap in formal policy about how we allocate year-end surpluses, so Council unanimously approved their motion to "develop a year-end surplus allocation framework that considers taxpayer-borne costs associated with budgetary surpluses, continues to strategically allocate funding for specific infrastructure and other established priorities the Council has identified. (i.e. RCMP Reserve contribution, Capital Works Reserve contribution) while still upholding prudent financial planning practices."
Council will consider final reading to adopt the budget this coming Monday.
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