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Budget 101

The annual Business Plan & Budget outlines how the City plans to allocate resources to deliver the programs and services residents and businesses rely on every day while achieving Council’s Plan for a Better Barrie.

2018 Development Schedule

June 2017 Committee/Council approval of the 2018 Budget Directions
June – Sept. 2017 Staff produce work plans that include draft operating, capital and rate budgets
Oct. – Dec. 2017 • Prioritization of operating and capital
• Public engagement activities
Jan. 2018 • Budget presentations
• Council approval of 2018 Business Plan & Budget

Balancing the Budget

The City is required by provincial law to balance its operating and capital budgets each year. Simply put, the money raised must balance the money spent. To balance the budget, the City can either:

  • Increase its revenue stream through raised property taxes and fees; or
  • Manage expenses through adapting or reducing the cost of programs and services

Operating budget

Money is raised in two streams:

  • Tax rate: funded primarily through property taxes, user fees and reserves
  • User rate: funded primarily from reserve funds and user fees which are intended to make the programs and services self-sustaining. These include parking, water and wastewater.

Money is spent on the day-to-day expenses for program and service delivery including city road & sidewalk maintenance, curbside collection, recreation, parks, trails & waterfront maintenance and emergency services.

Capital budget

Money is raised through a combination of property taxes, development charges, debt issuance, grants and reserves.

Money is spent on projects designed to create, enhance or restore the service potential of the City’s significant network of assets, which include infrastructure (roads, bridges, buildings etc.), land, equipment and vehicles.

Budget Drivers

Similar to a personal or household budget, the City’s budget is affected by factors beyond our control that impact the cost of a program or service:

Increasing utility and material costs

Like a resident, the City’s utilities (gas, hydro) and materials costs increase every year. While the City works hard to find efficiencies that reduce the impact of these increases, they do effect property taxes if the City is to maintain the existing service levels provided to residents.

Service Partner & Education costs

There is only one property tax bill. Of the residential property tax bill:

 

Infrastructure gap

Like most municipalities,Barrie has a significant gap between the amount of money available each year to maintain its infrastructure and the amount of money needed to ensure infrastructure remains in a state of good repair. That’s why the City created a Dedicated Infrastructure Renewal Fund that’s used only for the replacement and rehabilitation of Barrie’s roads, bridges, buildings and other infrastructure. View projected debt reduction. 

The Dedicated Infrastructure Renewal Fund supports such projects as:

What is Barrie’s infrastructure?

Our infrastructure refers to the physical assets that the City uses to deliver services to our community. The City of Barrie currently owns $3.5 billion worth of infrastructure, which includes our roads, bridges, storm water drains and sewers, streetlights, sidewalks, community centres, water treatment facilities, buses and much more.

Why does infrastructure matter?

Just like we need strong bones to keep us healthy and active, cities need well-maintained infrastructure to keep our communities safe, healthy and livable. It makes people and businesses want to locate here and is a key ingredient to building and supporting a strong, vibrant city.

Why is it important to maintain our infrastructure?

Maintaining our infrastructure is important not only because it saves us money on expensive emergency repairs, but also because it helps protect the health and safety of our citizens by decreasing the risk of a major failure such as a water main bursting or road crumbling.

How is Barrie’s infrastructure funded and what does it cost to maintain it?

Infrastructure is funded through a combination of property taxes, reserve funds, development charges, debt financing and funding from Provincial and Federal Governments through gas taxes. According to Barrie’s Asset Management Plan, the City should be investing $86 million each year to keep our infrastructure well maintained.

2018 Development Schedule

Jun 2017 • Committee/Council approval of the 2018 Budget Directions
Jun – Sep 2017 • Staff produce work plans; draft operating, capital and rate budgets.

Oct –Dec 2017

• Prioritization of operating and capital
• Public engagement activities
Dec 2017  • 2018 Business Plan distributed to Council
Jan 2018 • Budget presentations
• Committee/Council review & approval

Council Direction

In June 2017 Council directed staff to prepare the 2018 Business Plan & Budget for all tax-supported services that considers:

  • One budget year and three forecast years;
  • The cost of maintaining current programs at current service levels, based on anticipated 2018 activities;
  • Annualization of prior period decisions;
  • The financial impact on the 2018 budget of Council directions throughout 2017;
  • Recommendations for changes to funding sources that result in a decreased reliance on property taxes;
  • An estimate of assessment growth based on the value of newly assessed property throughout 2017;
  • The continuation of an annual 1% Dedicated Infrastructure Renewal Fund; and
  • Contributions to reserves that are consistent with the Financial Policies Framework

Frequently Asked Questions

Where does the City’s money come from?

The majority comes from residential and commercial property taxes. Other sources of revenue include user fees, Development Charges (capital budget), grants & subsidies from other levels of government and contributions from reserves.

Where does the City’s money go?

Of Barrie's 2016 residential property tax bill, 54% funds City services, 15% funds education, as mandated by the Province, and 31% funds the City’s service partners such as the Barrie Police, Public Library and services delivered by the County of Simcoe such as Land Ambulance and Social Services.

What are ‘reserves’ and ‘reserve funds’?

Similar to savings accounts, reserves and reserve funds receive regular (annual) contributions as part of the budget process. They are a critical component of the City’s long-range financial plan as they strengthen our financial sustainability, help to minimize fluctuations in the tax rate, provide funding for infrastructure and provide the flexibility to manage debt within the City’s Debt Policy.

A reserve is established by Council for a specific purpose but the funds do not relate to any particular asset and there is no requirement for the reserves to earn interest. Reserves are created either through a planned contribution established in the budget process or through the transfer of unspent funds at the end of a year. Any transfer of unspent funds at year end must be authorized by Council.

A reserve fund is similar to a reserve except that the reserve fund assets are segregated and restricted to meet the purpose of the reserve fund. There are two types of reserve funds; obligatory and discretionary reserve funds. Obligatory reserve funds must be created whenever a statute or legislation requires funds received for special purposes be segregated from the general revenues of the municipality i.e. Development Charges. Discretionary reserve funds are established through a by-law of Council for a specific purpose. Investment income generated by reserve funds must be accumulated in the reserve fund and accounted for as part of it.









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