Annual Budget Policy

Policy statement

The Corporation of the Town of Oakville (Town) is committed to accountable and fiscally responsible financial management. Decisions made with regards to the operating budget , capital budget, staff complement and reserve management are consistent with the goals set out by Council in its Strategic Plan and ensure that budget plans support economic growth, maintain infrastructure, respond to changing needs and are fiscally responsible.

Purpose

The purpose of this policy is to:

  • Enable staff and council to make informed choices about the provision of programs and services the town offers;
  • Ensure that evidence based decisions are used to determine how resources are allocated to town programs and services;
  • Ensure that the budget plans presented by staff are consistent with the goals set out by Council in its Strategic Plan and Official Plan;
  • Ensure existing infrastructure is maintained in an efficient and effective manner and that new assets are well planned for in accordance with the town’s Strategic Asset Management Plan;
  • Establish a foundation for monitoring actual expenditures against budgeted expenditures;
  • Promote community input and stakeholder participation in the budget process.

Scope

This policy applies to all town programs, services, boards and agencies.

Budget Principles and Strategies

The success of the town’s budget process rests on a solid foundation of budget principles. The town will maximize program efficiencies while maintaining program effectiveness by focusing on results and outcomes. The principles and strategies that the town utilizes in making decisions related to short and long term budgeting include:

  • Strategic Plans – Council’s Strategic Plan, Official Plan and various master plans serve as the guiding documents under which all town initiatives are aligned.  The budget will align with these plans and support it.
  • Sustainability – the town’s operating and capital budgets incorporate a long-term perspective and should be affordable today and in the future.  Annual budgets will ensure that programs and services valued by Oakville residents continue to be offered in an efficient and sustainable manner.  The use of one-time revenues shall not be incorporated into the town’s base budget and revenue diversification should be maximized.  Budget plans will ensure existing infrastructure is maintained and that growth is well planned for.
  • Affordability – innovative service delivery strategies and available financing tools will be explored when balancing the budget to minimize the financial impact of rising costs, growth and expanding services to ensure that current and future tax rates are maintained at manageable levels.
  • Interdependency – the operating and capital budgets must be reviewed with a coordinated effort as capital expenditures and financing decisions will impact future operating budgets.  Debt repayment levels must be managed in accordance with approved policies and reserve and reserve fund requirements need to be well planned to maintain adequate fiscal capacity.
  • Multi-Year Budgets – multi-year budgets will be developed for operating and capital expenditures according to an approved guideline.  Multi-year budgets will incorporate the operating impacts of capital initiatives.
  • Performance Budgeting – Program service levels will be defined and performance measures will be utilized and reported on in annual budgets. The town will prepare trends, comparisons, and other financial management tools to monitor and improve service delivery for programs. The safeguarding of the town’s assets and resources shall be a key management objective.
  • Fee for Service – the town will ensure that user fees will be utilized to cover costs of appropriate services in accordance with the Rates and Fees policy.
  • Fiscal Capacity – fiscal capacity will be built into budget plans through long-term financial planning and related debt policy and reserve/reserve fund procedure to establish a strong financial position by considering long-term flexibility, reduced financial risk exposure, statutory requirements and credit agency rating criteria. Debt financing will primarily be used for new capital initiatives benefiting new and existing residents over an extended period of time.
  • Communication with the Community – the budget will provide opportunity for community input through a variety of means consistent with Council approve principles for public involvement and statutory requirements.

Definitions

Capital Budget means the annual Council approved plan for expenditures and financing sources to complete Capital Projects or one-time capital expenditures.

Capital Expenditure means an expenditure incurred to acquire, construct or improve land, buildings, engineering structures or machinery and equipment used in providing municipal services. Capital expenditures should provide benefits lasting beyond one year, and should result in the acquisition of, or extension of the normal useful life of a fixed asset.

Capital Program means a collection of similar Capital Projects that are summarized at a service area level for reporting purposes.

Capital Project means an undertaking in respect of which expenditures is incurred to acquire, improve or install land, buildings, engineering structures, machinery or equipment including the installation of computer software, and is the level at which Council approves funding and funds control in the Capital Budget.

 Council means the Mayor and members of Council for the Town of Oakville.

Department Head means the head of any town Department.

Emergency means an unforeseen situation of an urgent nature, presenting an unacceptable risk to the health and safety of persons or to property, requiring an immediate expenditure of funds.

Financial Report means the summary of financial activities related to the operation of the Town of Oakville provided to Council by the Treasurer.

Operating Budget means the annual Council approved plan for expenditures, revenues, staffing levels and service levels for operations of the town taking place from January 1st to December 31st in a given year.

Program means any organizational unit that may encompass one or more related municipal services and is the level at which Council approved funding and fund control in the operating budget.

Program Services means the individual activities within a Program.

Treasurer means the employee designated as such by Council for the position. The Treasurer shall exercise all powers and duties of the Treasurer as set out in the Municipal Act.

Policy details

Policy Number: F-FPC-006
Section: Financial Planning
Sub-Section: Financial Planning, Development and Investment
Author: Financial Planning department
Authority: Council
Effective Date: 2016 Nov 14
Review by Date: 2021

References

F-FPC-004 Financial Control Policy
F-FPC-004-001 Reserve/Reserve Fund Procedure
F-FPC-005 Corporate Debt Policy
Municipal Act
Rates and Fees policy
Asset Management Plan policy
Operating Budget procedure
Capital Budget procedure
Community Engagement Plan