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Operating Budget Policy
Purpose
The purpose of this policy is to
1. Outline financial principles goveming the flinding of the Mllage of Fundy - St. Martins operating
budget.
2. Ensure operating budget planning cornplies rvith all relevant provisions of the Local Govelnance
Act and all other applicable legislations.
3. Stipulate the Village's objectives with respect to the Operating Budget Policy, which are as
follows:
a. To stlengthen Financial Sustainability by budgeting recurdng expenditures with recurring
revenues and allocating one-time revenues to one-time expenditures or reserves;
b. To reduce Financial Vulnelability by gradually decreasing reliance on sources ofrevenue
outside of its controls such as operating grants frorn other governrnent sources.
Definitions
1. Operating Budget: a Cor.rncil approved plan containing the revenue and expenditure allocations
required to provide Village programs and seruices for the curent fiscal year which must be
aligned with a Council Apploved Long Term Financial Plan;
2. Basis of Budgeting:All budgetaly procedures will confirrn to Plovincial regulations;
3. Structurally Balanced Budget: A budget for which recuming operating revenues are sufficient to
fund recuring operating expenses;
4. Non-Recuring Revenues: l'evenues that the Village cannot reasonably expect to receive on an
ongoing basis. The source is most likely one-tirne if any of the followings applies:
a. Has a set ending date ranging between 12 - 36 months with the exception of
intetgovenmental funding agreements designed to improve long term sustainability;
b, Revenue spikes due to higher than normal transactional activity;
c. One time transactions, such as the sale of assets.
Frinciples and Strategies
1. The Village will utilize the following plinciples and strategies in making decisions related to the
operating budget:
a. Alignrnent with Strategy: The Village's budgeted operations shall be in line with the
agreed upon Council priorities and the Long-Term Financial plan;
b. Affordability: The Mllage must be able to bear the budgeted costs of providing services
without iticurring financial diffrculty or risking other undesirable consequences;
c. Innovation: irnplementation of operational efficiency, continuous improvement
initiatives, and new revenue generation strategies will be considered when planning the
operating budget;
d. Sustainability: the operating budget will be produced with a long-term focus of achieving
a structurally balanced budget; giving taxpayers a better representation ofthe link
between financial resources and seryices that can be delivered over tlre long term;
Authority
1. The operating budget establishes the spending authority for all activities and initiatives;
2, Operating budgets cannot be reallocated without council approval;
3. Iu cases where significant budget oveffuns are expected due to Emergencies such as severe
weather conditions of EMO events, such cost ovenuns can be approved by the CAO in advance
and must be reported back to Village Council with mitigation measures.
Use of Non-Recurring Revenues
l. Non-recurring revenues shall be directed to one time uses and away fi'om funding ongoing
services. Examples of non-recurting revenues would include one-time sale of assets. Examples of
acceptable uses would include funding Pay-As-You-Go for capital expenditures that would
otherwise be furrded by debt, funding the infi'astructure deficit, or to build up capital or operating
fesel'ves.
2, Short term revenue spikes should be treated in a similar way to non-recurring revenue.
User Charges and Fees
1. The Village will seek to balance the need for selvices and the ability to raise fees, char.ges, and
taxes to support those services. Usel fees will be assessed relative to the cost of providing the
services;
2. Service areas should assess the cost ofactivities supported by user fees on an annual basis to
ideritify tlie impact of inflation and other cost increases;
3. Council may decide against full cost recovery in cases where greater public benefit is
demonstrated.
4. Cost recovery policies should be developed that will be used as a basis for setting the charges or
fees, as well as the setvice cost recovery goals based on quantitative targets (percentages recovery
targets) and how the charges and fees will be levied and collected.
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Grants
1. Inter-Governmental funding opportunities will be pulsued for initiatives that are in line witli
Council priorities, the approved budget, and the Long-Term Financial plan;
a. Any opportunities falling outside these criteria will require Council approved adjustrnent
to tlie budget and the Long-Tenn Financial Plan and be supported by a business case.
Variance Reporting
1. The Council shall be inforrned on a timely basis on all significant unfavorable financial rnatters
and will receive, as a rninimurn, quarterly financial budget var.iance reports;
Roles and Responsibilities
1. Council shall:
a. Approve the operating budget as recomlnended by the Finance Committee;
b. Establish priorities through the Long-Term Financial Plan.
2. The Finance Committee shall:
a. Review the operating budget and make lecommendations for Council approval;
b. Ensure the operating budget is aligned with the Long-Term Financial Plan.
3. The CAO shall:
a. Dilect the preparation and presentation of the operating budget;
b. Exercise financial control over all corporate operations to ensure compliance with the
operating budget approved by Council;
c. Prepare long range revenue and expenditure forecasts;
d. Analyze and make recomrnendations on budget requests;
e. Review the consistency and alignment between budget requests and overall budget goals;
f. Consolidate all budget requests and their impact into a package that clearly
communicates the Mllage's budget objectives, pressures, and linkage to the Village's
Long Term Financial Plan.
Ntdurd'/
Resolution
Date /
Adopted
't- *-e- 3 /2-o2-S \
Arnended
(
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