Staff Report to Committee of the Whole: 2025-2029 Financial Plan – 2026 Projected Key Budget Items

Staff Report to Committee of the Whole

DATE

Tuesday, April 8, 2025

DEPARTMENT

Finance

SUBJECT

2025-2029 Financial Plan – 2026 Projected Key Budget Items

EXECUTIVE SUMMARY

At the March 17, 2025, Regular Council Meeting, Council passed the following motion:

THAT Council approve the 2025 budget and direct staff to bring back further information related to the projected tax increases in 2026-2029 of the 2025-2029 Five Year Financial Plan to a Committee of the Whole meeting to be held on April 8, 2025.

This report outlines the items that make up the amended proposed 2026 tax increase as drafted in the Proposed 2025-2029 Financial Plan at a high level. As this is a future year within the current Financial Plan, it is a projection and subject to change throughout the current year, with further changes through the 2026-2030 Financial Plan process that will commence in late 2025 or early 2026. Beyond the second year of the Financial Plan (in this case 2026) the Financial Plan is primarily driven by projections and inflation (CPI) estimates and refined each year through the budget process as that year gets closer to being the “current” year. This is especially true in a city growing as fast as Langford. As well, with many longer-term planning documents scheduled to be completed or updated over the next year the City will be able to more accurately project budgets further into the future each year.

Though the 2026-2029 budgets/projections will be subject to change during future budget processes, Council may choose to revise these projections by removing items or by deferring items to a future year. However, it should be emphasized that these decisions are just altering the projection and will be subject to further budget deliberations and staff input in future years. The actual % tax increase for future years is not finalized until the applicable year’s budget is approved.

BACKGROUND

The Proposed 2025-2029 Five Year Financial Plan was presented to Committee of the Whole. Staff presented the proposed operating and capital budgets at the January 20th and January 27th Committee meetings. Subsequently, the City held two public input meetings to allow the public to provide comment and feedback on the proposed Financial Plan and the information presented. In addition to submissions from the public at these two meetings, the public was able to submit comments by email to budget2025@langford.ca as well as complete the City’s first budget survey on the Let’s Chat Langford engagement platform. Subsequent to these initial meetings, the Proposed Financial Plan was presented to Committee of the Whole at the February 20th meeting. The Committee deliberated the Proposed Financial Plan at the February 20th and March 4th Committee meetings.

The initial Proposed 2025-2029 Five Year Financial Plan included a 14.51% tax increase in 2025. Through the Committee of the Whole meetings, several amendments were made in an effort to reduce the 2025 % tax increase. At the March 17, 2025, Regular Council meeting, Council approved the 2025 Budget with an overall tax increase of 9.77% and directed staff to bring back further information related to the projected tax increases in 2026-2029. This report responds to Council’s direction.

COMMENTARY

The 2025-2029 Financial Plan as presented is summarized as follows (Council has approved 2025):

The initial proposed 2025-2029 Financial Plan (which has subsequently been amended as outlined above) is summarized as follows:

Council may wish to note that while the proposed tax increase for 2026 of 15.59% in the amended Proposed Financial Plan is higher than the proposed tax increase for 2026 in the initial proposed Financial Plan of 11.56%, the total property taxes projected to be collected by the City has reduced by $340,010. This is important to highlight as it shows one of the challenges associated with using a percentage (%) when comparing year to year.

As requested by Council, the following is a breakdown of the key budget items that are currently projected to contribute to the 2026 property tax increase. To show the comparison and net effect of the amendments made to the 2025 budget, the chart includes the percentage of each item in the initial Proposed 2026 budget and the Amended Proposed 2026 budget.

Staff note that as with the regular course of business, some of the above items are projected and known in principle but are subject to further Council decision and direction throughout the coming year.

2027-2029

Detailed key budget items which haven’t been included for these years as the primary drivers to the projected % tax increase in these years are: Debt Servicing, Public Safety costs and inflation (CPI). Further refinement and projections will be added to these years as the City’s Master Plans are completed and as these years get closer to the “current” year of the Five-Year Financial Plan.

OPTIONS

Option 1

THAT Committee of the Whole recommend that Council approve the 2025-2029 Financial Plan as presented at the March 17, 2025, Regular Council meeting and direct staff to prepare the 2025-2029 Five Year Financial Plan Bylaw and the 2025 Tax Rates Bylaw.

OR Option 2

THAT Committee of the Whole recommend that Council approve the 2025-2029 Financial Plan with the following amendments to 2026-2029: a. ______________; b. ______________; c. ____________.

AND

THAT Committee of the Whole recommend that Council direct staff to prepare the 2025-2029 Five Year Financial Plan Bylaw and the 2025 Tax Rates Bylaw.

SUBMITTED BY

Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence

• Melisa Miles, Manager of Legislative Services
• Donna Petrie, Senior Manager of Communications & Economic Development
• Yari Nielsen, Director of Parks, Recreation and Facilities
• Matthew Baldwin, RPP, MCIP, Director of Development Services
• Leah Stohmann, RPP, MCIP, Director of Community Planning and Climate Change
• Katelyn Balzer, P.Eng., Director of Engineering and Public Works
• Marie Watmough, Director of Legislative & Protective Services
• Braden Hutchins, Deputy Chief Administrative Officer
• Darren Kiedyk, Chief Administrative Officer