The operating budget shows the day-to-day costs of delivering programs and services for the next year. These costs are similar to your everyday household expenses such as mortgage payments, utilities or groceries.

The proposed operating plan for 2023-2024 outlines the expected tax supported operational needs based on current services and programs and the adjustments required to comply with Council Budget Guidelines regarding property tax increases.

During budget deliberations November 30 to December 4, 2020, City Council approved the following operating budgets:

• 2021 Operating Budget: $379.3 million
• 2022 Operating Budget: $388.594 million (following budget review approvals on November 29, 2021)

The main revenue sources for the operating budgets are property taxes, user fees, sales of goods & services and grants. The operating budgets are split into tax supported operations and utility/self-supported operations. Tax supported operations are not self-sufficient based on the revenues they can generate and require property taxes to provide a balanced budget. Utility/self-supported operations do not require property taxes and instead generate their revenue required by increases in fees or in the case of utilities, the rates customers are charged.

Unlike in past years, administration put forward multi-year budgets for both operating and capital budgets. There are many benefits to doing multi-year budgets instead of annual budgets. The first is having multiple years approved at once allows for a longer term look at operations in order to find more innovative and efficient ways to provide services to citizens. It also makes the review process easier: the second year in a multi-year budget shifts to more of a review while having the opportunity to respond to external influences and adjust the already approved budget accordingly. A multi-year operating budget provides tax rate and user fee stability and predictability, beneficial to both the municipality and residents.

Throughout the budget planning process, administration was able to meet the following financial parameters set by Council in June 2020:

• 0 per cent tax increase: property owners whose property has an average change in assessed value will not see any increase to the city portion of their tax bills in 2021 or 2022
• 0.5 per cent capital contribution in the 2021 and 2022 Operating Budgets
• No more than a 0.5 per cent increase in utility rates for 2021 and 2022
• No increases in user fees or new fees in the 2021-2022 budgets
• Reserves (excluding offsite and parking reserves) will be in a positive balance
• The 2021-2022 capital budgets meet the approved Council Policy which limits debt to 75 per cent of the Provincial Debt Limit

Property tax bills may fluctuate year after year depending on requisitions and individual property assessments. Requisitions include the education and senior housing collected on behalf of the Province through property tax bills and are in addition to the municipal portion. City Council has no control over requisitions. How your assessed value changes in relation to the average can also impact your tax notice. These factors could result in an increase or decrease to property tax bills.

For a residential property assessed at $325,000 in 2021, the total property tax bill was $3,238.08. This amount is broken down into three categories: $2,365.06 in municipal taxes, $858.36 in Provincial education taxes, and $14.66 in seniors affordable housing taxes. Although the total tax supported revenue remains the same for the 2022 operating budget as 2021, the total amount of municipal taxes collected by each home can fluctuate based on the property’s assessment change year over year compared to the average change in assessed value in The City. The City does not have control over the education and senior affordable housing requisitions collected on behalf of the Province. For an estimate on your property tax bill, visit www.reddeer.ca/tax.