What is a city budget?

    Like your own personal budget, the City’s budget is divided into two types of expenses – the operating budget and the capital budget. 

    What is an operating budget?

    The City's operating budget includes daily or regular expenses to keep things running smoothly. In your household, these would be things such as gas for your vehicle or groceries for your family. For the City, this includes garbage collection, clean water, and the maintenance of facilities like Crystal Pool and community centres, to name a few.

    The operating budget is the largest portion of the City’s draft budget, at $255.9 million for 2021.

    The operating budget is determined based on what it will cost to continue existing City services and programs at service levels set by Council. The City's operating and utility budgets include capital funding and reserve savings that provide annual funding to ensure the City's infrastructure is maintained for residents today, and the future. 

    What is a capital budget?

    The draft capital budget for the City is $52.9 million for 2021.

    A number of factors are taken into consideration when creating each year’s capital budget including master plans such as the Parks and Open Spaces Master Plan, transportation plans, and the City’s Strategic Plan. 

    Other factors include:

    • safety considerations (traffic calming and crosswalks as an example)
    • replacement costs 
    • age and condition of current City assets 
    • maintenance history 
    • risk assessment (what are the possible risks if this asset were to fail?) 
    • coordination with other capital projects (a stormwater main replacement might trigger updated curbs and sidewalks, so that a road is only dug up once) 
    • future capacity needs 

    When creating new assets, staff and Council will also consider what the annual operating and maintenance costs will be. 

    What happens when a capital project is not completed in a given budget year?

    If a capital project that is underway is not completed in a given year, it is automatically rolled over into the work plan for the following year.

    How is the City's revenue generated?

    Similar to most Canadian municipalities, taxation is the largest source of revenue, financing the majority of the services provided by the City. 

    The City’s revenue is generated mainly from taxation at $156.1 million. User fees form the next significant portion of revenue collected by the City at $46.2 million. 

    The remaining revenue consists of parking fees and fines revenue that provide the City with $15.0 million in revenue, followed by cost recoveries of $14.3 million, which includes recovery from Esquimalt for our amalgamated Police Department; other income at $11.6 million which includes revenue from the conference centre, real estate, investment interest, and revenue from property taxes for stormwater utility; grants at $11.6 million; and funding from reserves at $1.1 million.

    Where can I learn more about the City's 2021 Draft Budget?

    To learn what's proposed in the City's 2021 Draft Budget, you can read the full Financial Plan, or for a lighter read, the Budget Summary located in the Documents section.