Budgets & Financials
On Dec. 20, 2016 City Council approved the following tax supported budgets:
- A municipal operating budget of $359 million (representing a tax rate increase of 2.5 per cent – one per cent of which is earmarked for capital infrastructure)
- A capital budget of $43 million
- Municipal utility budgets totalling $93 million for wastewater, water and gas operations
The City develops an annual operating budget to pay for a wide range of municipal services including fire and emergency services, roads and parks maintenance, recreation programs, solid waste, transit, policing and library services. The City also prepares multi-year capital budgets which fund capital infrastructure replacement and renewal and other capital priorities as determined by City Council. The annual operating budget determines the revenues required from property taxation which are then used to set final tax rates.
Frequently Asked Questions
The following are frequently asked questions regarding the City's budgets & financials.
What is the operating budget?
The operating budget outlines the City's spending plan to implement Council's goals and priorities. It is organized by department/division showing day-to-day operations including programs and services, such as water and sewer, transit, garbage collection and disposal, recycling, parks, arenas, recreation programs, road maintenance, libraries, policing and public health services. Contributions to capital reserve funds are also made from the operating budget.
What is the municipal utility operating budget?
Utilities Kingston (wholly owned by the City) prepares this budget for municipal utilities owned by the city. These utilities, operated by Utilities Kingston, include water and sewer in all urban areas, and the operation of natural gas distribution in the geographic region known as the 'former' City of Kingston.
What is the capital budget?
The capital budget outlines the City's capital expenditure plan and related funding for assets and related programs, such as water and sewer mains, roads, arenas and parks, which will provide or support services to residents over many years.
How does Council arrive at its yearly budget?
Budgets are developed based on Council's directions, guidelines and the forecasts approved in the prior year's budget. Asset management and program services are part of City management's responsibilities and also serve as a major information source for budget planning. Residents provide budget input to their Councillors throughout the year. Council, sitting as Committee of the Whole, reviews all the budget proposals from City departments and external agencies.
How does the budget balance financial restrictions with demands?
City staff must develop a budget that maintains current services while remaining mindful of the pressure on the tax rate and the wider economic environment. To meet these challenges, City staff:
Incorporate a coordinated strategic approach to planning and budgeting.
The City is synchronizing the planning and budgeting cycle to develop multi-year strategic plans that will roll up into an approved corporate strategic plan. This approach allows us to better identify and plan to make use of the most sustainable and affordable resources to support the corporation's long-term strategic plan. It also allows us to respond to inflation, growth and growth-related cost pressures, regulatory service changes, salary and wage adjustments and their effects on future budgets.
- Operating and capital budgets support the strategic direction set by Council and the City's vision - to become Canada's most sustainable city - with focused efforts on environmental responsibility, social equity, economic health and cultural vitality.
Monitoring revenue and spending targets.
In the past few years, departments have had to deal with the effects of an uncertain economic environment. To manage approved plans, they continue to work with finance staff to monitor revenue and expenditure budget variances on a regular basis. Monthly budget variance reports are reviewed by departments and finance staff and operations are managed with the objective of having a balanced budget by year end.
Lobby provincial and federal governments for grants and new sources of funding.
To assist with infrastructure rejuvenation, the City continues to look for grants and new sources of funding from the upper levels of government. Cities cannot and will not be able to address this issue entirely on their own. Cooperation and support from federal and provincial governments is essential.
Implement changes in policy.
In order to enable the City to finance certain service requirements and construct capital facilities, it is necessary to move toward more focused user-pay approaches. Examples of this in the past include Council's approval of user charges as a significant share of project funding for the Grand Theatre, the K-Rock Centre and the INVISTA Centre.
How does the City's credit rating affect our ability to borrow money or issue debentures?
The City's credit rating demonstrates the City's strength in financial management practices and positions it to secure funds on the investment market at attractive interest rates.