Improvement district budgeting guidelines

Improvement districts may create an annual budget to better plan for the upcoming costs of operations and capital infrastructure, and to set revenues, reserves and debt financing sufficient to meet those costs. Improvement districts must make longer-term plans to renew or replace capital assets as required.

Staff and the board of trustees are responsible for ensuring that the improvement district is able to provide required services to landowners. This requires planning for future costs and methods of cost recovery which could be accomplished through an annual budgeting process..

An improvement district must make adequate provision in advance to renew capital assets, and raise sufficient funds for that purpose. This effectively means that the improvement district must create a capital asset management plan.

An annual budget for operating and capital expenditures may be supported by strategic planning and a capital asset management plan.

Reserve funds

Improvement districts are required to establish and make deposits into a reserve fund for the future renewal or replacement capital assets as they age. The reserve fund must be established by bylaw so that the funds are only used to renew and replace existing capital assets. Any capacity expansion of infrastructure should be paid through Capital Expenditure Charges or debt. This will require financial planning and capital asset management.

Annual budgeted expenditures and deposits to reserves should be matched by sufficient cash flow from revenue, reserve withdrawals and borrowing so that there is no deficit for the year.

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