The Municipality of Chatham-Kent will be starting a new multi-year budget process this year and preparations are already underway.
At the Council meeting coming up on Monday evening, administration will be asked to develop recommendations for the first ever draft 2024-2027 multi-year operating budget. A multi-year budget allows municipalities to plan long term with more clarity and gives property taxpayers a better idea of where taxes are heading in the future.
Inflation is expected to be a concern and a big challenge.
A staff report going before Council Monday night stated inflation has "severely eroded" the purchasing power of the Asset Management Plan. An asset management plan is a tactical plan for managing and replacing an organization's infrastructure and other assets to deliver proper services.
The plan is to increase funding for capital assets by 1.5 per cent in addition to the operating budget increase and create a tax rate stabilization reserve to offset potential unexpected price hikes and unplanned spending in the future and lower the burden on property taxpayers. That reserve will get a 0.5 per cent increase each year.
"A 0.5% annual allocation to this reserve is prudent financial planning to offset unknown items such as vendor contract and insurance increases along with any potential Provincial or Federal funding changes beyond year one of the multi-year budget," wrote Director of Budget and Performance Services Steven Brown.
Potential changes to provincial funding formulas for provincially-funded programs in childcare, employment and social services, and public health may also increase the share being paid by property taxpayers.
The new multi-year budget process will kick-off in November 2023.
Meanwhile, the report from municipal staff said they are keeping an eye on a few items that could alter the budget plan moving forward, such as significant changes in the consumer price index.
"Administration will continue to evaluate both the short-term implications and long-term inflation targets of the Bank of Canada and will make sound financial recommendations," Brown wrote.
