Terrace City Council adopted the projected five-year financial plan at the regular meeting May 14.
The budget saw a $1.5 million increase in spending from 2017 to 2018, or 7 per cent, with another 0.5 per cent increase expected for the subsequent year in 2019.
“We had the pool closed and so we have also some offsetting revenue that we’re expecting in the next year, but we are going to have some additional expenses in 2019 because the pool will be open for the full year,” said Lori Greenlaw, chief financial officer for the City of Terrace. “So we’re going to have more staffing, more wages, more maintenance.”
Revenue sources dropped by 17 per cent from 2017 to 2018, from $29 million to $24 million, strictly from the $6 million dollar drop in the amount of money received through grants this year, according to Greenlaw.
“We were expecting 10-million dollar in grant funding in 2017 and only 4.2 million in 2018,” she said, mentioning that grants vary quite significantly every year.”The big one for 2017 was our pool project, we had a really large grant expected for that. Most of that grant was used up in 2017 and is not available in 2018.”
Expected revenue gathered from user fees will increase by 2.1 per cent from 2018 to 2019, from $5.02 million to $5.13 million, because of the projected increase due to the pool being open fairly soon. The expected revenue was lowered in 2017 because the pool had been closed for that year, according to Greenlaw.
Taxes collected made up 40 per cent of total revenue in 2017, and will make up 48 per cent of the total figure in 2018, mostly because of the drop in grants, which made up 28 per cent of the revenue last year.
The city also had a two per cent tax increase from 2017 to 2018. According to figures detailed in the five-year financial plan, there is another 2.5 per cent tax increase forecasted for 2019 from $14.7 million to $15.1 million. However, Greenlaw stressed that the increase is not set in stone.
“There are two things, there’s an actual tax increase but then there’s also what we call non-market change,” she said.
“So if we have new construction, then we get new tax money from that and then we don’t need that two per cent tax increase. We know of some things in the works, and we’re hoping that we’re going to see more non-market change rather than just another two or three per cent increase.”
The amount of funds borrowed will make up $3.8 million of the city’s total revenue for 2018, or 12 per cent of the overall figure.
“We actually didn’t borrow in 2017, we held it over because the pool wasn’t finished,” Greenlaw said. “So we’re doing our borrowing in 2018.”
The city did see a substantial increase in the amount of money in their reserves and surplus allocation from 2017 to 2018 of $617,860, or an increase of 31 per cent.
“We did see some additional surplus from our RCMP contract, and we saw a little bit of surplus from our capital projects that came in under budget, so that gets rolled into the budget that we can spend in the next year,” explained Greenlaw.
In addition to reviewing the proportion of total revenue that comes from each funding source, the forecasted five-year budget also examines the distribution of property taxes and the use of permissive tax exemptions for 2018-2022.