Ford City BIA– Appendix I

As at the end of 2018, the BIA had an accumulated surplus (reserve balance) of $29,036.

The requested budget and related levy due from BIA members is $30,000, which is an increase of $1,200 from 2019. The BIA is planning one event, Dropped on Drouillard, at an estimated cost of $11,800 to be funded from the BIA levy.

Risk Analysis:

There is little risk to the municipality in generally approving the budgets of the BIA’s. All budgets are required to be presented and discussed within each BIA membership prior to being submitted to Administration.

Related levies are recovered through the charge to the BIA memberships which is added to final property tax bill. Property taxes are secured in that they are attached to the property and not the member. Therefore, should a property owner fail to make a payment of the annual charge, it can be recovered through subsequent property owner or tax collection action.

Financial Matters:

At its regular meeting on February 24, 2020, City Council was advised, in a communication item, that BIA’s would be provided with an interim payment equal to not more than 50% of its 2019 approved budget. Until funds are provided to the BIA, most are not in a cash flow position to proceed with planned expenditures. The authorization of an interim payment allows BIA’s to fund operations, which are required to be paid, until the 2020 rates and levies are finalized. BIA’s are not allowed to expend funds on items that have not received Council approval. Following approval of the budgets and respective rates, Administration will prepare to release a 2nd payment to each of the BIA’s. This 2nd payment represents the balance of the budget, less any amounts due for capital projects and other repayments as well as a minimal holdback for any unidentified items that may arise during the year. The release of the 2nd payment is subject to the receipt of a clean audit opinion with regards to their 2019 annual financial statements.

It should be noted that each of these budgets were prepared and presented to the membership prior to the recent COVID-19 events which have caused many businesses to close their operations. Each of the BIA’s were provided with the opportunity to revise the budget submissions to take into account any impacts on planned events and expenditures. Any revisions would need to be presented and supported by the membership. No revised budgets were received and as such are being presented in full to City Council for approval. Any amounts budgeted for but not expended in 2020 would be taken into the BIA’s reserve at the end of the year. As such, Administration has provided City Council with information as to the balance in each of the BIA reserves as of the end of 2018. There are no legislative requirements for City Council to approve expenditures from accumulated reserves leaving discretion to the BIA Boards.