Updates to the municipality’s multi-year business planning and budgeting policy proposed by administration are intended to reduce delays and redundancies, council heard last week.
“This is the first of a number of financial policies that are going to be coming forward to council in support of your strategic priorities and the new financial framework,” said Linda Nelson, chief administrative officer, during the Oct. 1 meeting.
Administration was not immediately seeking a final decision from council, but rather sought to provide information to allow elected officials enough time to consider the proposed changes and to ask questions.
Offering some background on the proposed changes was Chris Albert, director of corporate services, and consultant Tracey Seitz Polowich, principal of Contigo Business Service Inc., the company previously commissioned to facilitate the municipality’s effort to develop a new strategic plan and vision.
“We’re trying to bring a number of policies forward, revamping old policies, making sure that all of our financial information and processes are up to date,” said Albert, adding that Polowich’s experience working with other municipalities has contributed insight to the process.
“We’re trying to get best practices and incorporate them into our processes,” he said.
Among those is the multi-year business planning and budgeting policy, which already exists and is being revamped to help further ensure the municipality is prudent and responsible in all of its financial transactions, he said.
As outlined by background information in council’s agenda package, Albert said some of the policy highlights include the following: a four-year operating budget; a 10-year capital plan with an emphasis on the first five years; a capital project adjustment limit to $100,000 for the chief administrative officer as well as an operating budget adjustment limit of $50,000; quarterly reports detailing project updates, budget-to-actual comparisons with variance analysis as well as a statement of financial position; a semi-annual review of capital project amendments and business plans; an annual review of strategic priorities and operating budgets adhering to the intent of minimal adjustments; and that the adoption of the tax rate bylaw in May not be intended to revisit the approved budget.
“We would like to attempt to create an atmosphere where changes to the budgets are minimized — they’re not eliminated, it’s not to say that we cannot do changes at other times as circumstances warrant. It’s just trying to minimize the number of occurrences that we have ad hoc requests,” he said.
“Part of what we’re trying to do with this new process is to make sure that we’re up to date and following best practices. So one comment that I would like to make to that is hopefully we can step away from past practices. In some cases, they’re very good. Other cases, they’ve been put in place and we’re not quite sure why after years and years. So I think it’s always best to review them,” he said.
“We’re not trying to take anything away from council, we’re just trying to streamline the process a little bit…I believe if we have to bring a lot of decisions to council on an ad hoc basis, we’re not doing our jobs to the best of our abilities.”
The proposed policy had previously been circulated to members of council for review, and although unable to attend the Oct. 1 meeting, Coun. Cheri Funke had submitted several queries about the proposed changes, he said.
Among them was why the chief administrative officer’s capital project variance spending limit had been suggested to increase to $100,000 when council has to approve any tenders whose cost exceeds $50,000, he said.
“The interpretation is, when you’re dealing with a million- or two-million-dollar capital project, less than $100,000 variance is a pretty minimal allowable variance,” he said, adding the purpose is also to minimize potential delays.
“A lot of our construction season is in the summer of course, and there may not be an opportunity to get all of council together with enough time to make a decision without delaying a project,” he said, adding council still has the discretion to decide whether to lower the proposed $100,000 limit.
Funke had also inquired about a reference to a restricted surplus account policy, which was still being drafted and will be brought before council but is essentially simply an updated terminology in the Municipal Government Act for what had previously been called reserves.
“In no form is administration allowed to withdraw funds from a restricted surplus account without prior approval from council,” he said.
Nelson added the intent of the process was to review the policies at one meeting and not approve them until the following meeting to provide members of council with an opportunity to digest the information presented and allow a greater chance to ask questions.
Coun. Rob Wolfe wondered what the allowable capital project variance limit for the chief administrative officer was before the proposed increase to $100,000 and whether it had ever been used, to which Nelson replied $50,000.
“So why another $50,000? I know what you’re saying in a $2-million project, $100,000 is nothing in the grand scheme of things. But to the taxpayers, $100,000 is a lot of money.”
Adding to that line of inquiry, Mayor Terry Leslie asked if that limit applied to a single capital project or all approved projects.
“The intent would be for each individual project,” said Albert.
“It would be similar to a contingency that allows Linda to proceed on an individual project.”
Responding to the second portion of Wolfe’s question, Albert added that his understanding was that the previously established policy with a $50,000 limit was not always being followed to the letter.
In some cases, capital projects that went over budget by less than $50,000 were being brought back before council, while in other instances, administration proceeded to spend the money and council was informed at a later date, he said.
With a goal to complete capital projects typically within a six- to eight-week time frame, having to stop work for any significant period of time could delay the project, he said.
“The main intent is coming across these surprises,” he added.
Nelson said council still has to approve over-expenditures. But if there is an emergent issue where delaying a project could create additional costs, the matter comes down to either allowing the administrator discretion up to the limit of $100,000, or calling a special council meeting to approve the extra expense.
Mayor Terry Leslie reminded his colleagues that the decision to approve the higher limit was in their hands.
“On the one hand we don’t want to hold up projects because we can’t get council members together. But on the other, we have that responsibility to say we don’t want any surprises, and neither do our ratepayers,” said Leslie.
The mayor added he preferred this process, which provides ample opportunity for council to reflect on the information presented to think up questions, which do not always immediately come to mind.
“When I drive away (from a council meeting), I think, ‘I wish I had asked…’” he said, adding he appreciates not being pressed to make rushed decisions.
Coun. Paul Isaac said an example scenario outlining a situation in which a major project, such as the Main Avenue work, might go over budget would help him to better understand administration’s proposal.
Isaac made a motion to accept as information administration’s presentation and for the matter to be brought back for further discussion during the Oct. 15 meeting, which council carried.
