TAMRMS#: B06
5.4
REQUEST FOR DECISION
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Review of Financial Council Policies C-FS-01 and C-FS-05
Presented by: Suzanne Findlay, Manager, Financial Services, and Stephen Bannerman, Senior Manager, Assessment & Taxation, Financial & Strategic Services
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RECOMMENDED MOTION(S)
recommendation
That Standing Committee of the Whole recommend to Council that amendments to the following Council policies, provided as attachments to the agenda report entitled “Review of Financial Council Policies” dated July 8, 2025, be approved:
• C-FS-05 Budget and Taxation Guiding Principles
• C-FS-01 Financial Reserves.
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SUMMARY
Administration is required by policy to review specific Council Financial Policies on a regular basis. These policies have been reviewed by Administration and proposed amendments are provided to Council for consideration.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On April 15, 2025 Council passed the following motion:
CB-25-022
That the Lakeview Business District Development Acceleration Program be approved, to be funded through: $1,600,000 from stabilization reserve; and $800,000 annual transfer of assessment growth to begin in 2025; commit this annual transfer in the Growth Stabilization Reserve until a total balance of $8 million is reached.
On December 16, 2024 Council passed the following motion:
PM-25-003
That the Affordable Housing Fund (approved for one year in 2024) is made a permanent part of the budget on an ongoing basis.
On June 18, 2024 Council passed the following motion:
CB-24-024
That Council Policy C-FS-03 Debt Management, as attached to the agenda report entitled Standing Committee of the Whole Item: Debt Management Policy (C-FS-03) dated June 18, 2024, be approved.
BACKGROUND AND DISCUSSION
As part of the City’s policy review, Administration undertook a comprehensive analysis of the Budget & Guiding Principles Council Policy (C-FS-05). This review has resulted in the following recommendations:
C-FS-05 Budget & Taxation Guiding Principles
New Assessment Growth
• Increase the threshold from which prior a year’s assessment growth can be applied to base to 6.5%. Under the current policy (section 14.b.iv.), assessment growth transfers may only be applied to the base budget if the tax rate increase exceeds 3.5%.
This threshold was established in 2018 when average tax increases were 1.8% and the intent was to set the per cent at a rate that would and could allow the transfer to build up and be used to offset future infrastructure-related operating costs (such as a fire hall or new amenities building).
However, due to annual inflationary pressures in addition to Council’s approval of a 1.5% annual property tax increase to support the repair, maintenance, and replacement of existing capital assets, the annual tax increase is now averaging 3.9% (2022-2025). Raising the threshold maintains the reserve’s ability to mitigate tax impacts associated with the opening of new infrastructure. While this is about 2.6 per cent over the average, the limit is to allow the transfer to build up to mitigate tax impacts associated with future infrastructure operating costs.
• Formalize Council’s approval of an $800,000 annual transfer to the Growth Stabilization Reserve to fund the Lakeview Business District Accelerator Program. This ensures the funds are earmarked and not available to offset future tax increases.
Other Updates
• Include a definitions section to provide definitions for commonly used terms.
• Update verbiage on New Permanent Staffing Requests to reflect current practice.
• Updates to section 14 Tax and Utility Rate Stabilization Strategies
o Textual changes to provide clarity on current practice.
o 14a. Capital Funding Strategy
§ Reference updates to C-FS-03 Debt Management Policy, which reallocates retired debt to Pay-As-You Go when new debt is planned within the next five years.
o 14.c Reserves
§ Update verbiage to reference C-FS-01 Financial Reserves and remove section ii as C-FS-01 identifies when funds are allocated.
• Verbiage updates to align with current practice or other policies
o Section 15. Public Participation
o Section 16.d Unconditional New Operating Revenues
o Section 16 e. Grant Revenue
o Section 19 Budget Amendments
• Transfer of Taxation Principles to an individual Taxation section header.
o Update verbiage to communicate changes to the assessment base and property tax split are long-term goals. Annual changes will be measured by impacts to both the residential and non-residential classes coupled with St. Albert’s overall goal of a greater non-residential assessment base.
C-FS-01 Financial Reserves
• Schedule 02 - Operating Program
o Include Affordable House Fund, which was approved as an annual transfer.
• Schedule 04 - Traffic Safety
o Remove Speed on Green Program transfer as an automatic source of funding to align with the Provincial changes to the program.
• Schedule 07 - Safety Reserve
o Increase the amount of funding that can be withdrawn as part of the budget process to $230,000 from $150,000.
• Schedule C6 - Growth Stabilization
o Increase the ceiling to $3 million from $2.5 million to reflect the recommended increase in the threshold to apply assessment growth against the base. This would represent the maximum value and does not mean there will be a requirement to top up the reserve to this maximum.
o Exclude from the ceiling the funds committed for Lakeview Business District Accelerator Program. As these funds are committed for the program and cannot be used for one time operating or capital costs, they should not impact the ceiling.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
N/A
IMPACTS OF RECOMMENDATION(S)
Financial:
None at this time.
Compliance & Legal:
Recommended changes will ensure that Council policies are up to date, relevant, legislatively compliant, support best practice, and reflect specific direction provided by Council.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
Development of financial policies and procedures to ensure appropriate financial internal controls are in place. Fiscal responsibility is ensured through monitoring and compliance of policies and procedures. Risks of not updating the policies would include not having sufficient internal controls in place and not having clear direction.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Not applicable.
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A
IMPACTS OF ALTERNATIVES CONSIDERED
If Council does not wish to support the recommendation, the following alternatives could be considered:
ALTERNATIVE 1:
Standing Committee of the Whole may choose to approve only some or none of the recommendations provided or may provide specific alternate direction for Administration to incorporate and bring back to the Standing Committee of the Whole or Council for further review or approval.
Financial:
None at this time.
Compliance & Legal:
If policies are not updated, there is a risk that Council policies are out of date, irrelevant, or may be non-compliant with legislation. In addition, the policies may not support best practice and may not reflect previous direction provided by Council. Some of the recommendations are related to previous Council direction and are required to be incorporated/excluded into/from the relevant policies.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
None at this time.
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Report Date: July 8, 2025
Author(s): Suzanne Findlay
Department: Financial & Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher