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Financial Plan 2025 – 2029

Public Engagement

Budget Open House

At the City of Merritt Budget Open House on January 30, 2025, a series of graphics were presented to the public in a tradeshow-like format, combined with the opportunity to have a coffee chat with council. More information on the draft budget and a video on the budget process are also available on this page.

Council Meetings

The public is always invited to regular council meetings. If you wish to address council as a delegation on the topic of the budget, please first ensure that the budget is on the agenda.  Then submit your request to appear as a delegation.

All public comment should be submitted before the end of February 2025.  The final budget must be approved before May 14, 2025.

Meet the Mayor or Councillor

City of Merritt Mayor and Council are open to meet with residents who wish to discuss any topic.  Contact the Mayor or a City Councillor to voice your opinion.

Online

Frequently asked questions were accumulated and will be posted to this webpage. Please help us address your questions and submit an email to finance@merritt.ca.

Budget Timeline

Council is required to adopt an updated Five-Year Financial Plan Bylaw and set the annual tax rate by mid-May of every year.  The process is lengthy and involves Council, City Administration, and the public.

The typical workflow begins in early fall, as City departments review and prepare their annual budgets. The City manager and the financial team review the budget submissions mid-fall and draft a provisional budget. Near the end of fall, Council reviews and discusses the draft budget at meetings that are open to the public in-person and through video conferencing.  The draft budget is posted online and is open to public review throughout early winter.

Council reviews and discusses any feedback at subsequent public meetings from about January to April. The public may engage with Council anytime during this period; however, the ideal time for contributions is when a Public Engagement session, such as an Open House, is announced.  If you are unable to attend the Open House, residents are invited to attend public Council Meetings. If you wish to address Council regarding the budget at these public Council meetings, first confirm that the budget is on the upcoming agenda at merritt.ca/agendas. Then sign up to speak by completing the form on this page: merritt.ca/how-to-address-council.

Once Utility Rates Bylaw and other rates are approved, Council adopts a Five-Year Financial Plan by mid-May and the final tax rate is set.

PRELIMINARY BUDGET

5-year Financial Plan  (2025-2029)

Budget Overview

The goal for 2025 is to bring the City into a more stable operating position and begin to build reserves to help pay for future water and sewer infrastructure. The preliminary City of Merritt Financial Plan 2025 – 2029 continues along the path charted in 2024 to balance the operating budget by 2025. Key elements of this preliminary budget show that the City will be looking at a 10% to 12% tax increase on the municipal portion of property taxes for 2025 only, which applies to only about half (55%) of the property tax bill. The other portion of a property tax bill goes to other levels of government. (Reference the pie chart). Also note that tax increases are expected to stabilize starting 2026.

Please note that the overall Property Tax increase would NOT be 12%. The other governing bodies must set their rates before the final overall property tax increase can be set.

City of Merritt Council is currently considering ways to limit the tax increase. View the 25 options in the Public Engagement slide deck.

Also note that the proposed tax increase on the average household, with a property valued at $445,000, would effectively amount to about $22.

At present, key points in this preliminary budget are as follows:

1.     Delivering on Balancing the Operational Budget by 2025

During the 2024 budgeting cycle, a path was charted to balance the operational budget within two years, by the end of 2025, while simultaneously beginning to save restricted reserves for water and sewer infrastructure. The draft 2025 – 2029 financial plan delivers on the commitment of a balanced operational budget by 2025.

Starting in 2024, the general parcel tax was transferred directly into restricted reserves for both water and sewer. Near term implications across 2025 – 2026 include the drawing down of the federal gas tax fund (now called the Canada Community-Building Fund) to fund water infrastructure projects, such as the pipe bridge replacement and Kengard well design and construction. Increasing sale of service revenue, particularly in the sewer fund, will be required.

2.     2025 Tax Increases: Municipal ↓ Transit ↑ from Prior Plan

In the prior financial plan, back-to-back 12% increases were premised through 2025 for the municipal tax levy. Through a combination of operational and service level changes, the proposed municipal tax increase for 2025 is currently at 10 – 12%.  It is important to note that this is not an increase to your entire property tax bill.  The municipal portion of your property tax bill comprises about half of the amount; the remaining portion goes to other levels of government. To limit the 2025 municipal tax increase, the following level of service changes are included in the plan:

These level of service changes are partially offset by the inclusion of the annual mosquito program within the municipal tax levy, adding +1 FTE in Public Works in 2027, and including budget for encampments and other community cleanup costs.

The CUPE collective bargaining agreement for unionized employees expires at the end of December 2024. The 2025 municipal tax increase may be revised pending the outcome of the bargaining sessions.

The transit levy increase will not follow the general municipal increase during the financial plan, reflecting the higher cost of maintaining existing service levels. A Committee of the Whole meeting was held on January 7, 2025, during which BC Transit presented Council with options on fare increases. This decision will focus on the user. Fare options, at best, will see the cost recovery percentage maintained at current levels in the near term given the cost trajectory. Council may elect to focus on advocacy with the Province. Staff suggests a decentralized Small Community Grant equivalent focused on transit funding for municipalities with populations under 19,000.

The Finance Department updated tax rate waterfalls in the regular council meeting on January 14, 2025.  This shows two options for identifying potential additions, savings or cuts. Council continues to consider level of service changes.

3.     Significant Investment in Community

The City of Merritt will invest up to $38.8M in capital projects over the next five years across transportation services, water infrastructure, protective services, the East Merritt sewer infrastructure corridor, water meters, and community services facilities. A portion of this investment is contingent on grant funding. Flood recovery and mitigation projects are not included in this total.

4.     Capital Funding Strategies and Future Debt Priorities

The capital investment is funded by planned and secured grants and grant contingency [36%], reserves [35%], and debt issues and equipment financing [30%].

The financial plan will draw down the Canada Community-Building Fund/Gas Tax Reserve through 2026 and begin building it back up starting in 2027. Unrestricted, water, equipment, and facility reserves will also be used to fund the capital investment in the financial plan.

Given the City’s current reserve position, equipment financing over five years will be accessed to fund all eligible equipment for Public Works and the Fire Department. Contributions to the sewer reserve starting in 2024 are reserved exclusively for the Waste Water Treatment Plant (WWTP). To fund the East Merritt corridor sewer infrastructure, debt issues will be required.

To pursue grant funding opportunities for the WWTP, matching funds through a combination of reserves and long-term debt will be required. The Municipal Liabilities Regulation sets the liability servicing limit at 25% of select municipal revenues. To that end, the WWTP, and required fire trucks, are the only priorities for future debt beyond the term of the financial plan.

5.     Risks and Opportunities

The biggest risk in the financial plan is the funding of the Kengard well. Construction costs are premised to be funded by a combination of reserves and grant funds. If the grant application is not successful, a debt issue may be required.

The City’s current reserve position dictates the inclusion of projects and funding strategy within the financial plan. There are opportunities to improve future financial position and funding optionality. Three focus areas have been identified.

VIEW THE FULL SUBMISSION

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In the Media

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