Peace River town council approved its 2024 Utility Operating Budget at its Dec. 11 regular meeting.

Guiding principles for this year’s budget included keeping utility rates competitive, mitigating negative future budget changes, maintaining existing service level standards, and including funding for the current year capital plan.

“The budgeting documents show a move away from contributions to reserves which were then taken out of reserves to fund capital expenditures to budgeting for amortization expenses which will also be used for present year capital expenditures and also to fund future life cycle cost expenditures,” explains Mayor Elaine Manzer.

“The 2024 budget has $7.8 million in total revenues and $8.7 million in total expenditures.”

The 2024 budget will see an increase of anticipated revenues from 2023 of over $900,000.

“The approved Utility Rate Bylaw included rate increases for water, wastewater and solid waste services which increased the expected revenues in the budget by about $289,480,” says Manzer.

“The increase in expenses over the 2023 year is about $1.07 million which largely represents the difference between amortization expense of $2.3 million included in budget 2024 versus contribution to reserve of $1.17 included in budget 2023,” she adds.

The 2024 waste disposal budget will go down by nearly $50,000. Manzer explains this is because the 2023 budget included one month of the amount owed to Peace Regional Waste Management Company whose three municipal partners had to contribute funds to pay down a company deficit.

Waste Administration’s budget will also see a reduction of approximately $113,000 in the new budget.

Manzer says the $50,000 reduced budget for yard waste disposal costs is a large contributor to the reduced budget in 2024.

“A full year of the program enabled administration to better anticipate usage volume and subsequent tipping costs,” she says.

“No contribution to operating reserve in 2024 budget rather the 2024 budget for waste management shows a surplus of $77,150 that will be transferred to reserve.”

Wastewater administration projected budget has gone up by $680,000 in 2024.

“The Town has started to budget for amortization expense versus contribution to reserves,” says Manzer.

“Amortization expense represents the cost of utilizing an asset for one year of its expected useful life, reducing the value of the asset over its lifespan, providing a truer value of our assets. In 2023, $78,300 contribution to reserve was included in the budget. In 2024, $761,250 amortization expense has been budgeted. An increase of $682,950. Funded amortization expenses are transferred over to reserves.”

By Emily Plihal, Local Journalism Initiative Reporter – South Peace News –

Original Published on Jan 03, 2024 at 08:10

This item reprinted with permission from   South Peace News   High Prairie, Alberta

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