Kenneth Brown
of The Clarion
The Town of Kindersley’s 2018 budget contains the largest capital investment for several years to come with nearly $11.5 million in capital expenditures.
Council members approved the 2018 budget at a meeting on May 7. With expenditures of more than $23.1 million and revenues of more than $17.1 million, there is a $6 million difference. The budget will be balanced by a combination of borrowing and transfers from reserves.
Three larger projects consume more than $8.07 million of the total budget with $5.1 million for the new aquatics centre, $2 million for the new fire hall and $975,360 for the regional landfill project. The three projects represent 70 per cent of all capital spending for 2018.
The town’s road and utilities projects are budgeted at $2.76 million to consume most of the remaining capital dollars being spent this year. The town is also investing in parks with a total of $178,500 in park expenditures.
Parks spending includes $66,000 for Coleman Park, $40,000 for Kinsmen Park and $72,500 for new playground equipment. The town’s operating budget represents a total of $12.5 million of the total budget. The town projects a surplus of nearly $319,000 after transfers and loans.
The town’s single largest revenue stream is the municipal tax levy. The 2018 budget forecasts nearly $7.24 million in revenue from the tax levy, a slight increase over the $7.1 million forecasted in the 2017 budget. The forecasted municipal tax levy in 2017 ended up under budget at approximately $6.95 million.
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A total of $1.64 million in revenue is from operating grants and nearly $115,000 is from grants-in-lieu of taxes. The other $8.25 million in budgeted revenues will come from the town’s other departments in fees for services.
The budget projects a deficit of slightly more than $6 million before transfers and loans. The town is borrowing $3.5 million for the aquatics centre project. The loan will be added to the town’s existing debt of more than $7.5 million for the new water tower and water system upgrades.
Transfers are being made to and from the town’s reserves. The town had more than $10.54 million in reserves at the end of 2017 and there will be more than $8.54 million in reserves at the end of 2018 for a difference of nearly $2 million.
Audrey Hebert, the town’s director of corporate services, puts the budget together with the help of her staff and direction from council. She said the 2018 budgeting process went well and there was a lot of discussion leading up to the final draft.
“We probably met with council four or five times just to discuss where they saw the budget going,” Hebert said, recognizing that the budget would be amended based on council direction and the group wanted to avoid raising taxes.
Approximately $1 million in debt will be repaid this year, so the net difference in long-term debt is $2.5 million. There is a budget line for Plus Amortization, and the budget shows a deficit of $1.54 million before amortization. The $1.86 million in amortization puts the town in a surplus position.
Hebert said the town works on a cash basis, so the key is to figure out how much money is required to cover all operating and capital expenditures in a year. Amortization is a non-cash expense, so the town does not need physical cash for it, she said.
She explained that the amortization of assets is included in the expenditures under each department, so the Plus Amortization line shows how much of the budget is amortization. Hebert said it would be ideal to place the amortization in reserves to cover replacement costs, but it is included in the overall context of the budget. The town still transfers money to its cash reserves each year, she said.
“We don’t need cash to cover that expense,” she said of the amortization, recognizing that the information allows council to see how much revenue must be generated in order to balance the budget or to achieve a small surplus.
The town adopted a budget of $25.66 million in 2017, but the actual 2017 expenditures were only $13.24 million. Hebert said the 2017 budget included cash for big projects that did not proceed or were not completed including the full cost of the aquatics centre and about $3 million for a lagoon expansion project.
If money was budgeted for a new tractor for the parks department and the town did not purchase the tractor in that budget year, the money would have to be placed into a reserve if the town still wanted to use that money for the tractor.
All municipalities have a limit to how much money they could borrow and the limit is set by the provincial government based on a municipality’s ability to generate revenue. The town’s borrowing limit was about $13 million in 2017, according to Hebert.
The town had $7.54 million in long-term debt at the end of 2017 and $3.5 million of new debt is being added in 2018 due to the aquatics centre. The budgeted debt repayment of about $1 million would leave the town with approximately $10.5 million in debt at the end of 2018.
Deputy Mayor Shaun Henry, who is the only member of council to sit on a previous council, said it was the second budget for the new council and the town used a similar process to other budget years. He said the biggest challenge was finding the time for everyone to meet and discuss their ideas.
He noted that larger capital projects such as the aquatics centre, fire hall and lagoon are highlights of the budget, but he is also pleased to see money being invested into parks. One of the main goals was to avoid a tax increase.
“It was a pretty joint effort in regards to what we want to do and what we want to get accomplished,” he said, recognizing that the town has several big projects on the books in 2018. “We were fortunate enough we’ve got a lot in reserves to be able to accommodate a lot of that without having a big tax increase, which is nice.”
Money is placed in reserves each year to prepare for larger projects, so Henry said it is nice that people will get to see their money at work as projects are completed. He added that the town’s mill and tax rates should be adopted on May 28.
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