Preliminary Discussion for 2026 Budget

Executive Summary

At the April 8, 2025 Committee of the Whole meeting, as requested by Council, staff summarized a breakdown of the significant items that made up the tax increase for 2026 within the 2025-2029 Five Year Financial Plan. After this meeting, additional adjustments were made to the 2025 budget, which resulted in the projected 2026 tax increase, within the approved 2025-2029 Five Year Financial Plan of 15.61%.

Staff have done significant preliminary work related to the 2026-2030 Financial Plan and prior to doing additional work in preparation for the 2026-2030 Financial Plan process, Committee of the Whole may wish to provide additional information and direction for staff to consider when developing the initial draft 2026-2030 Financial Plan in January.

Background

At the April 8, 2025, Committee of the Whole meeting, staff presented Council with a report that provided a breakdown of the significant items that made up the projected tax increase for 2026 within the 2025-2029 Five Year Financial Plan. One of the reasons Council requested this report was so they could better understand the impact changes to the 2025 budget year had on future years, namely 2026. One additional adjustment was made after this report was presented to Council, the Grant in Aid budget was increased to $100,000 in 2026, which resulted in the projected 2026 tax increase, within the approved 2025-2029 Five Year Financial Plan of 15.61%.

Property tax increases over the last five years for the City of Langford have been:

• 2.95% (2021);
• 2.95% (2022);
• 12.41% (2023);
• 15.63% (2024); and
• 9.77% (2025).

As outlined through the detailed budget presentations in the last couple of years, the major drivers to these property tax % increases have focused on public safety, implementation of the 2023-2026 Strategic Plan, development and acquisition of key land and building infrastructure, shift away from a dependency on General Amenity funds to offset property taxes, and inflationary increases to the cost of providing services.

Commentary

As outlined in the April 8, 2025 staff report the breakdown of the major items included in the 2026 budget projection within the 2025-2029 Five Year Financial Plan were:

Staff have, over the past number of months, been working to further refine the 2026 budget based on various factors, including but not limited to:

• Council Direction/Decisions committed to previously
• Inflation (CPI)
• Contractual Obligations (internal and external)
• Maintenance requirements
• Strategic Plan
• Additional workload requirements to maintain current levels of service
• Asset replacement schedules
• Growth in Asset Inventories

It is worth noting that some items shown in the chart above as moved from 2025 to 2026, upon further investigation staff may now be recommending they be deferred later than 2026, thus, they are not included in the chart seen below.

While the current tax increase projection is 15.97%, it is important to note this figure is prior to final refinement at the staff level, and prior to the Financial Plan process which includes public and Council input.

The current preliminary breakdown of the 15.97% is as outlined below. The chart below is broken into three sections: No Adjustments Available, Potential Adjustments Available, and Adjustments Available.

No Adjustments Available: Items the City is committed to by contract or previous Council decision.

Potential Adjustments Available: Items that Council may have some discretion on, though likely not full discretion as some of these items have been committed to by Council policy. Adjustments to these items may have significant service level or other implications. Additionally, Council may consider a funding source other than property taxation for these items.

Adjustments Available: These items Council may have full discretion over these increases; however, adjustments may have service level implications or future tax increase implications. Additionally, Council may consider a funding source other than property taxation for these items.

For reference, for 2026, a 1% tax increase equals $622,061.

2026 Current Proposed Property Tax Increase for Discussion

No Adjustments Available

Potential Adjustments Available

Adjustments Available

Other / Total

Options

Option 1
THAT Committee of the Whole direct staff to present options, when presenting the Preliminary Draft 2026-2030 Financial Plan, for a 2026 tax increase of:
a. __________%
b. __________%
c. __________%

OR Option 2
THAT Committee of the Whole receive this report for information.

SUBMITTED BY: Curtis Staniforth, Manager of Budgets and Revenue

Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence:
Melisa Miles, Manager of Legislative Services

Concurrence:
Katelyn Balzer, P.Eng., Director of Engineering and Public Works

Concurrence: Braden Hutchins, Deputy Chief Administrative Officer

Concurrence:
Darren Kiedyk, Chief Administrative Officer