TAMRMS#: B06
11.2
REQUEST FOR DECISION
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Budget Adjustments
Presented by: Suzanne Findlay, Manager, Financial Services, Financial & Strategic Services
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RECOMMENDED MOTION(S)
recommendation
1. That $592,900 of Assessment Growth Revenue be used to increase the annual Pay-As-You-Go transfer to the Capital Reserve.
2. That the 2026 final Consolidated Municipal and Utility Budget in the amount of $355,849,000 and the Net Tax Requirement of $151,669,100 as shown in the attachment titled “2026 Adjusted Consolidated Municipal & Utility Budget” be approved.
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SUMMARY
The purpose of this report is to bring forward adjustments to the approved 2026 Budget for consideration of approval prior to the finalization of the annual tax levy.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On December 16, 2025, Council approved the following motions:
AR-25-454
That the 2026 Consolidated Municipal and Utility Budget in the amount of $355,343,300 with a Net Tax Requirement of $151,869,600 provided as attachment titled “2026 Approved Consolidated Municipal & Utility Budget” be approved.
That the 2026 10-Year Municipal Growth Capital Plan provided as attachment titled “10 Year Municipal Growth Capital Plan” be approved.
That the 2026 10-Year Utility Growth Capital Plan provided as attachment titled “10 Year Utility Growth Capital Plan” be approved.
BACKGROUND AND DISCUSSION
On December 16, 2025, Council approved a Consolidated Municipal and Utility Budget of $355,343,300 with a net tax requirement of $151,869,600 which resulted in an average property tax increase of $29 per year per $100,000 assessed property value, or 3.9%.
Prior to the presentation of the annual Property Tax Bylaw for Council’s consideration, Administration presents proposed adjustments to the budgets upon which the Property Tax Bylaw rates are based. Amendments can arise due to circumstances that have changed subsequent to the preparation/approval of the budget, adjustments to estimates, Council motions with spending implications, or new requirements of an emergent nature.
For 2026, Administration is recommending the following adjustments before the 2026 Property Tax Bylaw is passed.
Municipal Adjustments
Assessment Growth - increase of $1,078,000
In finalizing the 2025 Assessment Roll, the total weighted assessment growth rate was 3.95 per cent.
Council Policy C-FS-05 directs that assessment growth to be applied as follows:
• 25 per cent to offset the base - $269,500
• 20 per cent as a contribution to lifecycle reserves - $215,600
• 55 per cent to fund new initiatives, with any portion not applied to business cases transferred to the Growth Stabilization Reserve - $592,900
Administration is recommending that the 55 per cent of assessment growth be used to fund the business case outlined in the attachment titled “Pay-As-You Go Operating Business Case.” Over the last number of years, the city has experienced a decrease in capital grants of approximately $3.4 million, coupled with rising inflation costs. Although an increase of $569,700 was approved as part of the 2026 budget, this is insufficient to offset the ongoing annual shortfall. Accordingly, Administration recommends using the 55 per cent of assessment growth to increase the annual Pay-As-You-Go transfer (PAYG) by $592,900 rather than transferring the amount to the Growth Stabilization Reserve.
As the reduction in the tax requirement from assessment growth is managed through the increased Assessment base, only the increase in PAYG is reflected in the consolidated budget.
Transit Revenue - increase in revenue of $250,000
Increased Transit ridership in 2025 resulted in actual revenue exceeding budget. This trend continues into 2026 and to reflect this, Administration is recommending an increase in the budget.
Natural Gas Expense - decrease in expense of $217,200
The decrease in natural gas expense is due to new contract at a lower rate than initial budget.
Investment Revenue - net increase of $195,000
Due to an increase in the investment base, Administration is recommending an increase in interest revenue of $500,000 offset by an increase in interest expense of $305,000.
IT Maintenance Contract expense - decrease in expense of $85,000
The decrease in software expenses is due to an updated license management agreement at a lower cost than initial budget.
Supplementary Tax Revenue - increase in revenue of $25,000
Strong growth resulted in Supplementary Tax Revenue exceeding budget in 2025. This trend is expected to continue and to reflect this Administration is recommending an increase in the budget.
Servus Place Revenue - increase in revenue of $21,200
The increase in booking revenue at Servus Place is based on common-area booking trends over the last 3 years.
Parks and Recreation - removal of Marketing Specialist funded from Reserve - no impact to budget
The 2025 one-time approval of a Marketing Specialist Contract for up to $90,000 funded from stabilization reserve was incorrectly budgeted in 2026. As both revenue (shown as a transfer from reserve) and expense are reduced, there is no impact to the 2026 net budget.
Summary
Administration is not recommending any adjustments to the Capital Budgets.
The above recommendations result in a $200,500 reduction to the net tax requirement. The adjusted Consolidated Budget is $355,849,000 and the net tax requirement is $151,669,100, resulting in an average property tax increase of $20 per $100,000 assessed property value, or 2.9 per cent.
Administration will continue to monitor the revenues and expenditures within the approved budget and communicate any forecast variances through the quarterly reports.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
N/A
IMPACTS OF RECOMMENDATION(S)
Financial:
As these budget amendments are based on a point in time, the inherent risk of exceeding or not exceeding could result in a surplus/deficit position for the City. The Financial Reserves policy is in place to ensure that fluctuations in budget estimates can be managed.
Compliance & Legal:
The final tax requirement must be established at this time to meet our historical and targeted timelines of passing the Property Tax Bylaw and the issuing of Assessment and Tax notices by May 31st.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
See Compliance and Legal.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Not Applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
Financial Planning
Stewardship of development of annual operating and capital budgets for Municipal and Utility operations.
The approved operating and capital budgets shall serve as the financial plan for the City and provide Administration with the direction and resources necessary to accomplish Council’s strategic direction and Council approved service levels in accordance with the Services and Service Levels Inventory.
IMPACTS OF ALTERNATIVES CONSIDERED
If Council does not wish to support the recommendation, the following alternatives could be considered:
Alternative 1. That Council ‘do nothing’. The current approved tax rate would not be reflective of Administration’s recommendations.
Alternative 2. Council can approve alternate amendments to adjust the budget.
Financial:
Administration’s recommendations are based on the most current information. Both alternatives could further increase the inherent risk of exceeding or not exceeding the surplus/deficit position for the City.
Compliance & Legal:
None at this time.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
None at this time.
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Report Date: April 21, 2026
Author(s): Suzanne Findlay
Department: Financial & Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher