When budgeting in a municipality it is important to keep in mind that municipalities are unique.

Municipalities must budget to operate indefinitely.

The Municipality provides the basic foundational services that make it possible for people to live and work in Medicine Hat. As long as the City exists, so does the municipal corporation. Thus, the City must budget in a way to ensure it is around 100 years. Typically that, when budgeting, we must be conservative in our approach.

By law Municipalities cannot run a deficit.

We are allowed to dip into savings if we have savings but, if the Municipality is to survive indefinitely it cannot rely on savings forever. Thus we must budget in a way to ensure we can live within our means.

Typically a City only has two main options when it comes to balancing its budget, savings or taxes.

Thus the City is limited in the services it can provide by the amount of property taxes it is able to collect. The taxpayer’s tolerance for paying property taxes puts an upper limit on how much the City is able to do.

What makes us different than provinces and the federal government is that, by law, we are only allowed to issue debt to pay for capital projects.

Therefore, we are not allowed to cover cash deficits with borrowing. This is a basic mechanism to ensure that City’s do not over leverage themselves and remain financially sustainable.

Finally the City has a clear mandate outlined in Municipal Government Act which identifies the core services it must provide.

At minimum, the Municipality must provide the services as outlined within the act, which include things like providing safety, fostering good government, protecting the environment, and providing services and facilities and other things (such as roads and utilities).