City trying to find ways to recoup reserves

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This article was published 23/01/2025 (239 days ago), so information in it may no longer be current.

The City of Brandon plans to replenish its financial reserves this fiscal year by appropriating a total of $27.5 million, even as it looks to further deplete those reserves by several million dollars by the end of the year.

It’s an issue that promises to be a major discussion point this weekend as Brandon councillors begin two-day budget deliberations tomorrow.

In his public pre-budget presentation to council on Tuesday, Brandon’s director of finance, Troy Tripp, outlined the city’s plan to use both tax dollars, development charges, utility fees and other contributions to replenish city reserves.

Approximately $10.8 million in taxpayer dollars would be moved into general reserves as part of the 2025 proposed budget plan.

The remainder of the $27.5-million reserve top-up — approximately $16.7 million — would include $8.8 million in rate-funded income for utility reserves, $680,914 in development charges for DC Reserves and a combination of contributions through sales and grants.

These contributions include $1.7 million from the accommodations tax, $3.4 million in gas tax revenue, nearly $350,000 in land and equipment sales, and other revenue streams.

“When we sell off some of our fleet equipment, the proceeds from that go back into the reserve,” Tripp told councillors on Tuesday at Brandon City Hall, while providing examples of other ways in which the city recoups its financial reserves. “The funds raised through the golf course operations, the city receives a percentage out of the financial performance of the Wheat City Golf Course, and that is put back into reserves to help fund some improvements there.”

“And then some of the sponsorships that are garnered from the outdoor sports field complex will be put back into parks reserve to help offset some of the construction costs there.”

The City of Brandon’s proposed 2025 budget includes an 11.7 per cent increase in property taxes, with the increase expected to help shore up the city’s financial reserves and fund various infrastructure development and ongoing maintenance projects.

It’s the second year of significantly large increases to city property taxes — at the recommendation of an accounting report by MNP, Brandon enacted a 9.4 per cent tax increase in the 2024 budget and adopted a four-year budgeting process. This year’s proposed increase falls in line with last year’s 2025 projection.

When it comes to net transfers into the city’s financial reserves, the $8.6 million in the 2024 budget was the highest since 2015, when $9.3 million was put into reserves. Between those two years, the amount being put into reserves had been steadily decreasing.

While the infusion of $27.5 million into city reserves would mark a significant increase, the city has also proposed significant spending for the 2025 budget on Transit bus refurbishments, and the replacement of police vehicles, airport and fire equipment, and the replacement or enhancement of heavy duty and offroad equipment, to the tune of $19.6 million.

These purchases, among other expenditures, will be reflected in funds taken from the city’s reserves, and will go a long way to deplete them even further. Should the budget pass unchanged, according to a graph of historical balances between 2016 and 2025 provided by Tripp, general reserves would fall from $47.1 million in 2024 to $17.4 million in 2025. To a lesser extent, both utility and development charge funds would also show decreases in 2025.

“A big, big chunk of it is fleet,” Brandon Mayor Jeff Fawcett said Wednesday. “That includes buses, large equipment, vehicle purchases. But Transit is a particularly big part of it.”

The issue of potentially further depleting reserves turned into a topic of debate between councillors on Tuesday evening, with Coun. Shawn Berry (Ward 7) suggesting the city was trying to do too much.

“ I don’t think the problem is that we don’t have enough money in reserves. I think the problem is we’re spending too much (from) reserves in capital projects. We’re taking on too much in one year.”– Brandon City Councillor Shawn Berry (Ward 7).

“If you look at the graph here in historical balances, going back to 2016 the city is always in the general (reserves)… we’ve always been around that $40-million mark in our reserves,” Berry said. “This year after we get done, we’re going to have $17 million.

“I don’t think the problem is that we don’t have enough money in reserves. I think the problem is we’re spending too much (from) reserves in capital projects. We’re taking on too much in one year.”

Coun. Kris Desjarlais (Ward 2) countered Berry’s concerns by suggesting that the proposed budget and the further depletion of reserve funds is in line with the MNP report from 2024. Desjarlais also alluded to the city’s 10-year projection, which suggested that general reserves would be just over $32 million by 2031 should the city continue down its current fiscal path.

“Going back to the MNP report, we’re not that far off really from their forecast regarding reserves depletion right? They were forecasting significant depletion in the first couple of years,” Desjarlais said. “And just a comment, I’m thankful that in 2031 it looks like we’ll have some funds, because the MNP report was suggesting we might have to deplete our reserves in their entirety in 10 years in order for us to meet our capital forecast.”

Further discussion around the council table on Tuesday evening suggested that the issue of reserve depletion and project funding will be a hot topic on Saturday.

Budget deliberations will begin on Friday in council chambers at Brandon City Hall starting at 8:30 a.m. and continue on Saturday morning. City residents can also follow the presentations and deliberations on the City of Brandon’s YouTube Channel. WCGtv will also livestream the event on its website.

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