Canmore’s outgoing elected officials have put their stamp of approval on several major long-term financial planning policies before heading into the next municipal election this fall.
Canmore council met at the end of August for its final finance committee meeting, with nomination day and election day in the immediate future (Sept. 16 and Oct. 18) and approved a long-term financial strategy, asset management policy, reserve policy amendments and an update to the purchasing policy.
Manager of financial services, Katherine Van Keimpema, presented the policies, noting that each has been in front of elected officials for input over the past couple of years.
“The vision is to have our town, to have our municipal government, make sure we are innovative, cost conscious, flexible and sustainable,” Van Keimpema said. “We want to ensure that happens, especially when we manage capital assets.”
Mayor John Borrowman was enthusiastic about the effort council and administration have put into understanding the financial situation of the municipality, and what that means for the future.
“When I think about this term of council, this is perhaps one of the most notable or impactful initiatives this council has undertaken, along with administration on the long term financial viability of this community,” said the mayor. “The work we have been doing around financial sustainability and the resulting policies and strategy have largely been unrecognized by the public.”
Council began the process of establishing a long-term financial strategy in June 2015 with a workshop and then by directing administration to proceed with developing the strategy.
The City of Calgary’s long-range financial plan from 2011 was used as a framework to create the local strategy.
Specifically, Canmore’s strategy sets out the current financial position, five and 10-year capital plans, available funding, reserve, debt balances and funding gap projections.
Van Keimpema, who reminded council she has been pushing for yearly contributions to reserves over several budget cycles, also noted the importance of the reserve contribution policy.
“Every time we have been talking about budgets and money, I have been saying we need to put more money into reserves, but then the question becomes how much,” she said.
Part of what was needed, she said, is an understanding of the future needs for funding the creation, operation and maintenance of capital assets. The point of the process was to align the municipality’s financial capacity with its long-term service objectives.
Van Keimpema said each department at the Town has worked to develop future plans, and those plans provide detail for the financial plan as well. She said it helps the finance department and council develop an understanding of the 10-year capital needs, how much money is available and the gap between those two figures.
“Once we knew the gap, we brainstormed solutions,” she said, adding they are included in the report.
The strategy does not include contingency funding, money for unplanned emergent events or new capital financial demands not contained in current municipal plans.
The strategy contains projections of funding shortfalls for the 10-year capital plan of $30.5 million. That means everything the municipality wants and plans to do in the next decade would require an additional $30.5 million from as yet to be identified funding sources in order to proceed.
“It is hard to plan when you do not know what a significant revenue source might be,” she said. “That is a projected funding gap if we continue to do everything we said we would in our plans.
“Current available funding sources will not support all identified capital projects, not to mention anything unidentified or new initiatives.”
Councillor Sean Krausert noted the long-term strategy sets out what would be expected if no actions were taken, but the plan and council’s annual budgeting processes means officials are working yearly to make financially sustainable decisions. He also said the funding gap identified is for every project identified on a wish list, which can and would be changed each year by council.
“This is without any triage or removing any projects and programs from the wishlist,” Krausert said. “If we funded them all, this is what would happen if all the assumptions are correct.
“This (long-term financial strategy) is putting into works what we have been feeling and what we have wanted to do over the last few years.
Another factor high up on council’s list of priorities in relation to the budget is debt management. The long-term strategy sets out that by 2023 the Town’s debt limit (legislated through the Municipal Government Act and tied to a community’s prior year’s revenue levels) would hit a low of 54 per cent, and then begin to climb back up, as at the same time reserves would also be depleted, without changes to how they are funded as well.
Van Keimpema said Canmore is not the only municipality looking at its financial future and realizing there aren’t enough diverse sources of funding to achieve its goals.
Municipalities, she said, have few funding sources, with the primary source of revenues coming from property taxes.
There are also grant funds that flow through the province and federal governments, specifically Municipal Sustainability Initiative annual funding from Alberta and gas tax funds each year from the Feds. Yet those are also uncertain on a year-to-year basis.
“We do not know what will happen to grant funding, so we are sensitive to changes,” Van Keimpema said.
But Canmore is unique from other communities in the level of spending the municipality has to undertake on an annual basis to support a tourism-based economy. Those costs do not apply to all municipalities, and Canmore is unsupported by provincial and federal levels of government in addressing the issue, along with Towns like Banff and Jasper.
There are also considerations for the long term repair and maintenance of current and new infrastructure the municipality owns – which can be calculated as a contribution to reserves annually as well.
Van Keimpema said the work on the long term asset management plan would continue, based on the financial strategy and other policies developed and approved by council this year. Once that work is completed, the long-term strategy would also be updated to reflect what costs repair and maintenance of all Canmore’s assets would cost into the future.
