A look at the municipal budget process

Cities across the province, including Castlegar, are in the midst of finalizing budgets. Here is an overview of the budget process.

Municipalities all across the province, including Castlegar, are busy working on finalizing their 2017 budgets. All of the plans, meetings, debates and calculations leading up to a finalized budget can be a bit overwhelming.

So just how does the municipal budget process work anyway?

First of all, it is important to understand that cities pass five-year financial plans, meaning that they have essentially approved a budget for the next five years. This is what allows local governments to keep functioning during the early months of the year before the next budget is passed. Expenses for everything from paying utility bills and employees’ wages to purifying our water must still be paid prior to the passing of a new budget. By the time the budget is finally passed, more than one-third of the fiscal year has typically already transpired.

It is also one of the reasons that new expenses can be approved for the current year prior to the approval of that year’s final budget. Items planned for in the previous year’s budget, but not yet completed, will often come forward before council for approval during those interim months. Councils may also approve other expenditures for things that must be decided on before the budget is passed. Castlegar council has used that ability in recent months to approve advertising requests, grants and to take advantage of an opportunity to purchase some used light trucks that became available.

Included in the budget is a five-year capital plan that sets out plans for capital projects. Capital projects often span more than one fiscal year.

Section 165 of the Community Charter states that municipalities “must have a financial plan that is adopted annually, by bylaw, before the annual property tax bylaw is adopted.” The property tax bylaw must be passed by May 15. But it also states that “the financial plan may be amended by bylaw at any time,” giving cities the opportunity to take advantage of opportunities that may present themselves during the year or to make adjustments due to unforeseen circumstances.

Staff prepares reports, strategic planning sessions are held, the finance committee meets, and eventually a budget is hashed out. A draft budget is then usually presented at a city council meeting. In Castlegar, this just took place on April 3. Council then passed two readings of the five-year financial plan, thus moving it on to the next phase — public consultation.

Section 166 of the Community Charter states: “A council must undertake a process of public consultation regarding the proposed financial plan before it is adopted.” Procedural rules are such that the first two readings of the budget bylaw must be passed before public consultations can take place.

Public consultation for the Castlegar budget will be held April 11, 5-7 p.m. at the Community Forum.

Following the input session, the financial plan will then come before council again for a third reading at another council meeting. If it passes the third reading, it will then come before council again at the next meeting for adoption.

Castlegar’s proposed Five Year Financial Plan 2017-2021 is available at castlegar.ca and at City Hall.