DIDSBURY – Town council has approved a new policy designed to ensure that any year-end operating surplus for tax purposes is addressed in annual financial statements.
“It’s great to have this policy in place,” said Mayor Rhonda Hunter.
The move came by way of motion at the June 11 council meeting.
Policy FIN 008 sets guidelines for allocating the surplus at the end of each fiscal year.
“This will ensure that the year-end operating surplus for tax purposes is reviewed and a recommendation is made to council for allocating it before the annual audited financial statements are finalized and approved by council,” administration said in a briefing note to council.
The policy defines annual operating surplus for tax purposes as “the excess of revenues over expenditures including non-operational items such as reserve transfers and debt payment.”
Under the policy council will be responsible for approving the allocation of the annual operating surplus for tax purposes on an annual basis by resolution.
“The allocation of annual operating surplus for tax purposes will be consistent with achieving council’s vision and the areas of strategic priority,” the policy states.
“Annual operating surplus for tax purposes represents one-time funding that, by its nature, cannot be relied on to recur on an ongoing basis. Therefore, annual operating surplus for tax purposes could be allocated to fund one-time, non-recurring expenditures, (such as capital and /or replenishment of reserves) to contribute to the economic health and sustainability of the Town of Didsbury.”
The annual operating surplus for tax purposes for self-sustaining operations, including utility operations, will be allocated within those operations and respective reserves as per the reserve policy.
Councillors voted unanimously in favour of the motion.
Meanwhile, council also approved a new policy to address the need to have input from the finance team for financially related recommendations to council.
“It’s a very good policy,” said Mayor Hunter.
The move also came by way of motion at the June 11 council meeting.
“Finance review on fiscal related recommendations to council sets guidelines for having the chief financial officer (CFO) review and provide input on fiscal related recommendations to council,” administration said. “This will ensure the financial information is appropriate and that the CFO is aware of an item going forward to council.”
Policy FIN 009 states that “recommendations with a fiscal impact shall be reviewed by finance prior to the recommendation going forward to council to ensure prudent financial management, consistency with short- and long-term financial interests of the town and accuracy of the financial information being presented in each recommendation.”
Councillors voted unanimously in favour of the motion.
