Town of Canmore

Budget Surplus

Why is there a surplus?

The Municipal Government Act requires the Town of Canmore to adopt an operating budget where the estimated revenues must cover the estimated expenditures. This means we can't budget for a deficit. 

But, sometimes there is a surplus at the end of the year because of unanticipated increases in non-tax revenue from fees, or greater than anticipated growth, or sometimes there has been savings in expenses. 

For example, in 2019, net revenues were $1,006,000 over budget and expenses were $725,000 under budget.  When added together, the surplus of $1,731,182 represents a variance of 3.3% of the annual expenditure budget of $53.1M, an amount comparable to other municipalities. The main reasons for the surplus in 2019 were:

Amount

Description

$609,000

Increased revenue from planning fees

$102,000

Increased policing fine revenue

$81,000

Increased revenue from franchise fees

($96,000)

Decreased recreation revenue, mainly from arena rentals

$310,000

Increased all other revenue sources (net)

Amount

Description

($295,000)

Net salaries, wages & benefits savings above budgeted slippage

($252,000)

Savings in contracted services and professional fees – includes lower contracted services in public works, lower policing contract costs, and savings in various other areas, such as finance, fire, engineering and recreation, partially offset by increased contracted services in facilities and legal fees

($178,000)

Net general savings in all other line items across departments such as supplies, fuel, education, conferences, etc.

What happens to the surplus?

In a typical year, the surplus is often allocated to various reserves based upon established policies, financial strategy, and future business plans and strategies. However, in light of the current COVID-19 pandemic and its unprecedented effects on our community, Council allocated the entire 2019 operating surplus to the Tax Stabilization Reserve in order to be available to address the financial impacts of the current situation.

Reserve Funds

Canmore is sustainable only if both its capital infrastructure assets and its financial assets can be maintained over the long term. The Town of Canmore has a policy to establish reserve funds to ensure the long-term financial stability and flexibility of the Town of Canmore, to position it to respond to varying economic conditions and changes affecting the Town’s financial position, and to ensure the organization has the ability to continuously carry out its responsibilities. 

Below are some of the reserve funds held by the Town of Canmore. To read the policy and learn about the rest of the reserve funds, see the pdf Reserves Policy (3.69 MB) .

Fund

Purpose Funding Source
General Municipal Operating For working capital purposes, to provide funding for unanticipated operating expenditures in the course of providing municipal services, and for unforeseen general operating emergency expenditures.  One time transfers and one-time unbudgeted sources of revenue. 
Corporate Operating Contingency Subject to multi-year budgeting being approved by Council or required by provincial legislation, to fund unexpected or emergent operating demands that arise as a natural consequence of multi-year budgeting. Original fund established by a transfer from the general operating reserve and then annually from municipal property taxes.
Tax Stabilization To mitigate tax rate increases in cases of an emergent, non-recurring nature. One time transfers and one-time unbudgeted sources of revenue. 
General Municipal Capital To fund new capital projects or for capital expenditures necessary in cases of emergency.   Transfers from property tax revenue, unspent annual contributions to capital from operations, and one time transfers to boost reserve levels.
Asset Replacement/Rehabilitation To fund asset rehabilitation and replacement capital projects.  Transfers from annual operating surpluses, electrical franchise fees, budgeted transfers from municipal property tax revenue, and other one-time transfers to boost reserve levels.
Flood Mitigation Structure Maintenance To fund the work required to maintain flood mitigation structures, particularly after an event. Budgeted transfers from municipal property tax revenue.
Vital Homes (formerly known as Perpetually Affordable Housing or PAH) To fund the construction and operation of Vital Homes units and acquisition of land as determined in consultation with Canmore Community Housing.   Mill rate assessment on residential and non-residential sectors, and one-time transfers to boost reserve levels per Council resolution or policy.

Website Security Test