2016-2020_Financial_Plan_Web

Financial Planning Process

PRINCIPLES SPECIFIC TO OPERATING FINANCIAL PLANNING

Ensure that current revenues support current programs. The Financial Plan should provide that current programs are funded from current revenues and that reserves are used only as a temporary balancing measure. Any reserves that are used to balance the Operating Financial Plan should be subsequently replenished.

Maintain appropriate level of Reserves as determined by Council. The Financial Plan should allocate an appropriate level of funds to reserves in order to maintain services throughout economic cycles. Specifically, the Financial Plan should:  Provide adequate funding for unforeseen costs and revenue reductions;  Provide bridge financing for Capital Projects; and  Allow the City to take advantage of market opportunities. Council will determine the appropriate level of these reserves.

Reward cost-effective innovations. The Financial Plan should reward

cost-saving initiatives through a "save and invest" philosophy rather than a “spend it or lose it” approach. This philosophy allows City departments to reinvest their savings from innovation.

INFLATIONARY INCREASES

2016 inflation has been projected at 1.0%. However, City departments have been cautioned to allow for inflationary increases only as necessary where uncontrollable cost increases may be anticipated or where contracts warrant inflationary increases. Departments have also been provided with the following inflationary increase estimates, as calculated by City vendors.

2016

2017

2018

2019 2020

Water

2.8%

6.7%

6.0%

6.0%

4.9%

Sewer

4.3%

6.6%

7.2%

7.7%

7.2%

Drainage

6.0%

2.3%

2.3%

2.2%

2.2%

Solid Waste

0.0%

1.8%

1.7%

1.7%

1.7%

Equipment

0.5%

0.5%

0.5%

0.5%

0.5%

2016-2020 FINANCIAL PLAN

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