Each year the District of Central Saanich updates its Five Year Financial Plan. This includes Operating budgets, Water and Sewer Utilities and Capital Programs based on a sustainable infrastructure approach.
Each year the municipality is faced with the challenge of balancing the budget as mandated by the Community Charter legislation. While a municipality can incur a debt to pay large capital projects it cannot borrow or mortgage to fund day to day operations the same way that other levels of government can. This is a key difference as it means that the municipality must rely on revenue sources to cover off all expenses for the year.
Water and Sewer Utilities must also operate on a balanced budget basis as well.
The Central Saanich Consolidated Financial Plan for 2020 balances $29.7 million in revenues and with $29.7 million in operating expenses. The plan continues to focus on infrastructure replacement. This requires striking a balance between the need to continue increasing capital spending, maintaining service levels and keeping operating costs in check. Sound fiscal choices must be made that reflect community priorities and the ability to pay in a moderate economic climate. After new growth (non-market change in property assessment) is taken into account, the 2020 budget is based on a combined Municipal, Infrastructure Debt, Police and Library property tax increase of $57 or 2.85% to the average family home.
Long Term Financial Framework
The municipality has a long-term financial framework focused on five areas:
- Recognized value for services
- Predictable infrastructure investment
- Competitive property taxes
- Responsible debt management
- Improved reserves and reserve funds
Financial stability is fundamental to the health of the community. Only with stable and sufficient revenues, and careful planning of expenditures, will the District be able to provide the important services residents need and enjoy.
Annual Budget and Five-Year Financial Plan
Every year, we develop an annual budget outlining how tax dollars are invested to support our businesses and residents. We include a five-year balanced financial plan to guide our strategic investments and service plans while keeping property tax, utility fees, and user fees affordable over the long term.
To balance the budget, we carefully analyze the level of services required to meet the expectations of the community, and we balance those against realistic taxation and user fees levels.
Sustainable Infrastructure Replacement
A challenge facing our community is that many of our existing assets were constructed in the 1970s with significant funding support from senior levels of government. These assets will need replacing in the coming decades, and a renewal investment is required to maintain service to the community and protect the next generation. Council recently approved a long-term approach to gradually reach sustainable infrastructure replacement levels within fifteen years. We expect to use a gradual approach to increase the annual $4.2 million of capital investment to the minimum $6.2 million sustainable infrastructure replacement level.
To achieve this goal, we have the following in place:
- Asset Levy: A separate Asset Levy was established in 2017 to clearly identify infrastructure funding for taxpayers.
- General Capital Program: A fifteen-year plan to increase infrastructure spending equal to 1.25% property tax increase to average homeowner each year. ($25 dollars per year to average home)
- Water System: A ten-year plan to increase infrastructure spending equal to 1.50% water utility rate increase to average homeowner each year. ($8 dollars per year)
- Sewer System: A fifteen-year plan to increase infrastructure spending equal to 5% sewer utility rate increase to average homeowner each year. Some debt financing will be required to bridge the first few years as funding is gradually increased and we begin replacement of aging sewer mains and lift stations. ($13 dollars per year)
Between February to April, we advertise all budget meetings in advance and public participation in setting priorities is encouraged.
- Property taxes
- Utility fees
- User fees (such as parking meter fees; dog and business licences; parking and building permits; recreation programs including pools, rinks, and fitness centres)
Over half of our operating revenues come from property taxes paid by residents and businesses. Almost one quarter comes from fees and other revenues, with the remainder from utilities.
- June: The budget guideline for the following years plan is developed
- September to November: The user fee review is completed
- September to November: The Twenty-Five Year Capital Plan is updated
- November to January: The Budget Proposal is prepared
- February to April: The Budget Proposal Introduced and reviewed
- May 15: The statutory deadline for budget and tax rate bylaws approval
Municipal governments are required by provincial legislation to balance their budgets. While a municipality can incur debt to pay for large capital acquisitions, it cannot incur a deficit to fund day-to-day operations the same way senior levels of government can.