- a reduction in print advertising costs due to increased use of social media as well as increased use of “bulk buys", which allow for more targeted spending on media
- outsourcing the purchase of 95% of bedding plants from a commercial grower versus growing them in-house, which has saved the cost of maintaining aging greenhouses
- a state-of-the-art irrigation control system that utilizes real-time weather data on most sports fields to avoid overwatering
- a successful pilot project using turf growth regulator for sports fields, which resulted in cost avoidance of purchasing a new mower in 2019 ($350,000)
- a new LED lighting system for Sandman Centre, which will result in cost savings on power
- use of technology by our Engineering Division team to improve efficiencies, including the use of electronic building information requests (E-BIR), mobile inspections, emailed inspection reports, and the MyCity App as an inspection request portal—permits processed per inspector are the highest among comparable communities
- (5) The total of the proposed expenditures and transfers to other funds for a year must not exceed the total of the proposed funding sources and transfers from other funds for the year.
- (9) If actual expenditures and transfers to other funds for a year exceed actual revenues and transfers from other funds for the year, the resulting deficiency must be included in the next year's financial plan as an expenditure in that year.
- how much snow will the city receive and when
- what the impact of the US dollar conversion (exchange rate) will be
- what the price of fuel (e.g. gasoline, diesel, and propane) will be
- BC Assessment Authority (BCAA) $0.0403
- Thompson-Nicola Regional District (TNRD) $0.3286
- Hospital $0.4744
- School $1.9835
- City Taxes $5.1900
What is impacting the expected increases in the City's budget?
Similar to many of the residents of Kamloops, the City is faced with increased costs from a number of sources.
There are key, provincially driven factors, including increases in BC Hydro and ICBC rates and the recently introduced Employer Health Tax. These increases all have an impact on the services provided by the City.
There are also Council-approved increases to policing and additional monies allocated to both improved snow clearing and road work. Negotiated contract increases for unionized staff (the CUPE contract is up as of the end of 2018) are also a component of the increase.
Finally, the City has one of the most unique and diverse geographic environments of any city in the province. From the bottom of the valley in North Kamloops to the top of the hill In Aberdeen and all areas in between, the environmental conditions can differ drastically.
These conditions create a unique challenge for City staff to maintain the existing infrastructure. The challenge is associated with the cost of maintaining assets, roads, and buildings, which all require ongoing maintenance in order to provide the services expected by Kamloops residents.
What is the City doing to keep costs down?
The City is constantly looking at ways to deliver the same level of service in more economical and efficient ways. For example, some recent efficiencies being realized include:
Many of these savings are ongoing
and sustainable and will deliver value to the community into the future.
Why can't we run a deficit?
The regulatory framework related to civic budgets is defined in the Community Charter [SBC 2003] Chapter 26.
Part 6 - Financial Management, Division 1 - Financial Planning and Accountability is the section of the Community Charter that defines the financial accountabilities that a municipality must adhere to.
Section 165(5) and (9) set out the specific requirements of the Charter and is commonly referred to as the “no deficit rule”:
The simplest answer is that we are not legally allowed to run a deficit under
the Community Charter, and if we incur an actual deficit, the following year’s
tax rate MUST make it up.
How does the City spend the budget?
The City’s budget is framed around the anticipated costs to deliver the various programs and services based upon approved service levels. As with any organization's budget process, there are estimates and assumptions that are used to determine the anticipated amount that will be required to support the delivery of the various City services.
View a Where The Money Goes chart here - this is a visual representation of how the budget dollars are distributed across services.
What are the City's sources of revenue?
The City has a variety of revenue sources. Some of these sources have very specific requirements as to what can and cannot be done with the funds.
Property Taxes: Property taxes amount to approximately 55% of the City's revenue. The majority of the monies collected are used to fund the ongoing operation of the City, with the remainder invested in funding minor capital work. These types of programs are traditionally on a smaller scale with an ongoing investment in civic infrastructure. This work occurs annually over the life of civic assets and is supported by routine maintenance of the equipment. A common term associated with this form of capital funding is asset management.
Statutory Revenues: These revenues are related to water and sewer usage and are required to be reinvested in the delivery of these specific services. These revenues are allocated for the operation, improvement, maintenance, and expansion of the infrastructure that supports the delivery of water and sewage services to Kamloops residents.
Fee, Rates and Sales of Service: These revenues capture many of the City’s functions where there is a user fee or a cost associated with the request by a member of the community. Fees paid to rent facilities (either recreation or cultural), recreation fees for programs and memberships, transit user fees and application fees for building permits, business licences and inspections are included here. Next to city property taxes this is the next highest stream of revenue for the City.
Grants: Grants are non-repayable funds given by one party - often the federal or provincial government, corporation, foundation or trust - to a municipality. Two forms of grants that the City receives on a consistent basis are the Gaming Grant and the Community Works Grant.
The City also applies to receive other grants as these opportunities arise over the course of the year. In order to receive a grant, some form of application or proposal is required. Grants received by the municipal government are made to fund a specific project, have specific conditions attached as to what the funds may be used for and require some level of compliance and reporting.
Investment Income: As the majority of property owners pay their property tax bill near the July deadline, this action provides the city with a considerable amount of cash in the bank that is not immediately required. The City’s finance group invests these funds and draws upon them as required between tax deadlines. The interest earned on these investments is used to reduce the amount of the taxation required and provides a benefit to the ratepayers of the city.More details are in the DRAFT Five-year Financial Plan here.
How does the City finance capital investments?
For the 2019–2023 Financial Plan, 23% (approximately $12.5 million) will be funded by taxation. The balance of the funding will be made up of other funding contributions. These include grants, water and sewer levies, the Community Works Fund (Gas Tax), gaming grants, Development Cost Charges, and other reserves specific to management of the various civic assets.
More details are in Section D - Capital in the DRAFT Five-year Financial Plan here.
How does the assessed value of my home impact my tax bill?
The province of BC uses an "ad valorem" (value-based) system of property taxation. Only real property value (land and building) is taxed.
The property assessment and taxation is a two-step process involving BC Assessment and the City. BC Assessment determines the classification, value, and exemption status of the property. The City (tax authority) then applies its tax rates to the assessments.This calculation then determines how the tax burden will be shared among all property owners—residential, commercial, industrial, farm, etc. More details on the assessment process can be found at BC Assessment Authority.
How does the City develop the Five-year Financial Plan?
The City’s budget for the upcoming year is developed between July to October. We estimate what the world is going to be like in 3 to 15 months as well as 2 to 4 years into the future. Examples of the challenges that the City faces in developing the budget:
The City's finance staff were unable to anticipate the tariffs that were imposed on steel and aluminum during the USMCA (new NATFA) negotiations. This tariff resulted in a 25% increase in the cost of these types of products.
Some organizations provide anticipated rate changes (e.g. BC Hydro and FortisBC), while others do not (ICBC, changes to Medical Services Plan, and introduction of the new Employer Health Tax).
Information that is known beyond the upcoming year is built
into the future years' budgets along with a realistic inflation rate to project
what the next four years may look like. The further out the projection is,
the more it is an estimate of potential costs and revenues.
Aside from my residential taxes, what else am I paying for on my tax bill?
The City of Kamloops collects residential taxes at the beginning of July each year. Taxes specific to other government agencies are combined with your annual bill for municipal property taxes and your application for a home owners grant.
The 2018 total tax rate per household was $8.0168 per $1,000 in assessed value. This amount was made up of the following:
Of the total amount of taxes, $2.8268 (per $1,000 in assessed value) of the monies collected by the City were passed on to other government agencies. It’s important to note that the City has no input or control over these taxes; we simply collect these funds and pass them along.
To put it another way, for every $1 on your total pre-home owners grant tax bill, $0.35 is collected by the City for other government agencies and is not spent on services provided by the City to the residents.
From financial reporting position, these amounts are not reflected in the City’s financial statements and are not included in the reported City’s Revenues.