Improve the financial and budgeting management

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PROPOSALTO IMPROVE

THE FINANCIAL ANDBUDGETING MANAGEMENT

OF MUNICIPAL JURISDICTIONS


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Presented to the Committee on Canadian IssuesDenver, June 15, 2002

Roger Galipeau, FCA


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CONTENTS

1. OBJECTIVES

2. WHAT IS THE GOVERNMENT FINANCE OFFICERS ASSOCIATION(GFOA)?

3. ORIGIN OF THE PROJECT

4. GFOA RECOMMENDED PRACTICE, ADOPTION OF FINANCIAL POLICIES

5. ADVANTAGES OF ADOPTING FINANCIAL POLICIES

6. REASONS TO ADOPT FINANCIAL POLICIES

7. SUMMARY

8. RECOMMENDATIONS


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APPENDIX 1: GFOA - AWARDS CRITERIA

APPENDIX 2: QUBEC MUNICIPAL FINANCIAL INFORMATION MANUALAPPENDIX 3: AN ACT (APPROVED BILL 82) RESPECTING PUBLIC

ADMINISTRATION IN QUEBEC

APPENDIX 4: AN ACT (PROPOSED BILL 46) RESPECTING THE

ACCOUNTABILITY OF PUBLIC SECTOR ORGANIZATIONS(PROVINCE OF ONTATIO)

APPENDIX 5: AN ACT (PROPOSED BILL 106) TO AMEND VARIOUSLEGISLATIVE PROVISIONS CONCERNING MUNICIPAL

AFFAIRS (MAY 2002)

APPENDIX 6: BUDGET PRINCIPLES OF THE CITY OF REGINA


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1. OBJECTIVES

To improve the management of local governments by adopting the Recommended

Policies of the Government Finance Officers Association (GFOA) for the UnitedStates and Canada.

To include within the budget document a comprehensive summary of all of agovernments critical budget policies.


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2. WHAT IS THE GOVERNMENT FINANCE OFFICERS

ASSOCIATION (GFOA)?

GFOA is the professional association of state/provincial and local finance officers in theUnited States and Canada, and has served the public finance profession since 1906.The association's 15 000 members (more than 200 from Canada) are dedicated to the

sound management of government financial resources.

Membership

Membership in GFOA is open to government employees at the local, state, provincial,or federal level. GFOA members form a diverse group of individuals--from entry-level

employees to senior managers--who work for a broad range of governments, includingcities, towns, and other municipalities of all sizes; county governments; school districtsand special districts; public employee retirement systems; states and provinces; andthe federal government. Associate members come from schools of administration andpublic affairs; accounting firms, law firms, investment banks, and consulting firms.


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Professional Services

The association's full-time staff administer a broad range of services and programs inthe major functional areas of government financial management, including:

Accounting, auditing, and financial reporting;

Budgeting and financial planning; Capital finance and debt administration;

Cash management and investments;

Financial management;

Retirement administration and finance; and, Health care and other employee benefits.

Improving government budgeting is one of the biggest challenges facing state,provincial, and local governments today. Recognizing the critical need for guidance in

this area, the GFOA worked with other government associations, academe, labour, andindustry to form the NACSLB in 1995. The NACSLB was charged with establishingguidelines for budgeting that could be readily adapted to any type or size ofgovernment.

In 1998, the NACSLB released Recommended Budget Practices: A Framework forImproved State and Local Government Budgeting.


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GFOA - BEST PRACTICES IN PUBLIC BUDGETING

ElementsEach of the principles of the budgetprocess incorporates components orelements that represent achievable

results. These 12 elements helptranslate the guiding principles intoaction components. Individualbudgetary practices are derived fromthese elements and are a way toaccomplish the elements. The

elements of each guiding principle areidentified on the right. The principlesand elements provide a structure tocategorize budgetary practices. Clickon an element to see a more detailedexplanation.

Overview of Principles,Elements, and Practices

http://www.gfoa.org/services/nacslb/

Principle I Establish Broad Goals

Element 1- Assess Community Needs, Priorities,Challenges and Opportunities

Element 2- Identify Opportunities and Challengesfor Government Services, Capital

Assets, and Management

Element 3- Develop and Disseminate Broad Goals

Principle II Develop Approaches

Element 4- Adopt Financial Policies

Element 5- Develop Programmatic, Operating, andCapital Policies and Plans

Element 6- Develop Programs and Services thatare Consistent with Policies and Plans

Element 7- Develop Management Strategies


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GFOA - BEST PRACTICES IN PUBLIC BUDGETINGElementsEach of the principles of the budgetprocess incorporates components or

elements that represent achievableresults. These 12 elements helptranslate the guiding principles intoaction components. Individualbudgetary practices are derived fromthese elements and are a way to

accomplish the elements. Theelements of each guiding principle areidentified on the right. The principlesand elements provide a structure tocategorize budgetary practices. Clickon an element to see a more detailed

explanation.Overview of Principles,Elements, and Practices

http://www.gfoa.org/services/nacslb/

Principle III Develop Budget

Element 8- Develop a Process for Preparing and

Adopting a BudgetElement 9- Develop and Evaluate Financial

Options

Element 10- Make Choices Necessary to Adopt aBudget

Principle IV Evaluate Performance

Element 11- Monitor, Measure, and EvaluatePerformance

Element 12- Make Adjustments as Needed


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3. ORIGIN OF THE PROJECT

The GFOA recommends that all states and local governments develop acomprehensive set of financial policies to help define how they intend to achievetheir long-term goals (Recommended Practices 4.1-4.7).

The recommendations specifically address the need to adopt policies regarding:

Practice 4.1 - Stabilization Funds

Practice 4.2 - Fees and Charges

Practice 4.3 - Debt Issuance and Management

Practice 4.3a - Debt Level and Capacity

Practice 4.4 - Use of One Time Revenues

Practice 4.4a - Use of Unpredictable Revenues

Practice 4.5 - Balancing the Operating Budget

Practice 4.6 - Revenue Diversification

Practice 4.7 - Contingency Planning


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An increasing number of U.S. and Canadian governments have formally adoptedfinancial policies and regularly publish these policies in their budgets.

However, even among these governments there is considerable variety regarding:

The types of financial policies adopted; The scope of the financial policies adopted;

The role of elected officials in establishing and periodically reviewing thesepolicies and, The method of presenting financial policies in the budget document.

While we believe that a degree of diversity is desirable, consistent with the diversecircumstances of different governments, we also believe that a minimal degree of

consistency is needed as well if financial policies are to be truly effective.


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4.

4. GFOA RECOMMENDED PRACTICEhttp://www.gfoa.org/services/rp/budget.shtml#9

Adoption of Financial Policies

GFOA Recommended Practice, Adoption of Financial Policies

Background

The National Advisory Council on State and Local Budgeting (NACSLB) hasdeveloped a comprehensive set of recommended budget practices. The

recommendations have been endorsed by a number of key governmentalassociations, by academia and by labor groups associated with state and localgovernments. These practices and the associated framework outline a budget processthat encompasses the broad scope of governmental planning and decision-makingwith regard to the use of resources. This work is recognized as one of the mostimportant advances in governmental finance in decades. The Government Finance

Officers Association (GFOA) has adopted a recommended practice endorsing theNACSLB practices and the associated framework. However, the policies included inthis Recommended Practice are those considered fundamental to the budget processand relevant to the broadest number of jurisdictions.


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The work of the NACSLB provides a framework for describing the overall budgetprocess. The framework is organized around the four principles of the budget process:

Establish Broad Goals to Guide Government Decision Making Develop Approaches to Achieve Goals Develop a Budget Consistent with Approaches to Achieve Goals Evaluate Performance and Make Adjustments

Each of these principles has additional elements that provide guidance for an effectivebudget process. Element #4, of Principle 2, Adopt Financial Policies, addresses theneed for jurisdictions to establish policies to help frame resource allocation decisions.(Appendix 1)


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Recommendation

The Government Finance Officers Association (GFOA) recommends that, at aminimum, financial policies in the following areas be developed by professional staffand formally adopted by the jurisdiction's governing board as well as the governingboards of those component units; state, provincial and municipal corporationsand organizations; and other bodies under their jurisdiction:

Financial Planning Policies Revenue Policies Expenditure Policies

The jurisdiction's adopted financial policies should be used to frame major policyinitiatives and be summarized in the budget document.

It is further recommended that these policies, along with any others that may be

adopted, be reviewed during the budget process. Professional staff should review thepolicies to ensure continued relevance and to identify any gaps that should beaddressed with new policies. The results of the review should be shared with thegoverning board during the review of the proposed budget.


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Policy categories that should be considered for development, adoption andregular review are as follows:

Financial Planning Policies

These policies address both the need for a long-term view and the fundamentalprinciple of a balanced budget. At a minimum, jurisdictions should have policies thatsupport:

1. Balanced Budget - A jurisdiction should adopt a policy(s) that defines a balancedoperating budget, encourages commitment to a balanced budget under normalcircumstances, and provides for disclosure when a deviation from a balancedoperating budget is planned or when it occurs. (NACSLB Practice 4.5)

2. Long-Range Planning - A jurisdiction should adopt a policy(s) that supports afinancial planning process that assesses the long-term financial implications ofcurrent and proposed operating and capital budgets, budget policies, cashmanagement and investment policies, programs and assumptions. (NACSLBElement 9, GFOA Recommended Practice)

3. Asset Inventory -A jurisdiction should adopt a policy(s) to inventory and assessthe condition of all major capital assets. This information should be used to plan for the

ongoing financial commitments required to maximize the public's benefit. (NACSLBPractice 2.2)


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Revenue Policies

Understanding the revenue stream is essential to prudent planning. Most of these

policies seek stability to avoid potential service disruptions caused by revenueshortfalls. At minimum jurisdictions should have policies that address:

1.Revenue Diversification -A jurisdiction should adopt a policy(s) that encourages adiversity of revenue sources in order to improve the ability to handle fluctuations inindividual sources. (NACSLB Practice 4.6)

2. Fees and Charges -A jurisdiction should adopt policy(s) that identify the manner inwhich fees and charges are set and the extent to which they cover the cost of theservice provided. (NACSLB Practice 4.2)

3.Use of One-time Revenues - A jurisdiction should adopt a policy(s) discouragingthe use of one-time revenues for ongoing expenditures. (NACSLB Practice 4.4)

4.Use of Unpredictable Revenues - A jurisdiction should adopt a policy(s) on thecollection and use of major revenue sources it considers unpredictable. (NACSLBPractice 4.4a)


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Expenditure Policies

The expenditures of jurisdictions define the ongoing public service commitment.Prudent expenditure planning and accountability will ensure fiscal stability. Atminimum jurisdictions should have policies that address:

1. Debt Capacity, Issuance, and Management -A jurisdiction should adopt apolicy(s) that specifies appropriate uses for debt and identifies the maximumamount of debt and debt service that should be outstanding at any time. (NACSLBPractice 4.3, 4.3a, GFOA Recommend Practices pp.90-92)

2. Reserve or Stabilization Accounts - A jurisdiction should adopt a policy(s) to

maintain a prudent level of financial resources to protect against the need to reduceservice levels or raise taxes and fees due to temporary revenue shortfalls orunpredicted one-time expenditures. (NACSLB Practice 4.1)

3. Operating/Capital Expenditure Accountability - A jurisdiction should adopt apolicy(s) to compare actual expenditures to budget periodically (e.g., quarterly) and

decide on actions to bring the budget into balance, if necessary. (NACSLB Practice7.2)


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References

National Advisory Council on State and Local Budgeting. Recommended BudgetPractices: A Framework for Improved State and Local Government Budgeting.GFOA, 1998.

A Guide for Preparing a Debt Policy, Patricia Tigue, GFOA, 1998. GFOA Recommended Practice. "Setting of Government Charges and Fees" (1996). "Elements of a Comprehensive Local Debt Policy," Government Finance Review,

October 1994. "Developing Formal Debt Policies," Government Finance Review, August 1991.

Recommended by the GFOA Committee on Governmental Budgeting andManagement, January 31, 2001.


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5. ADVANTAGES OF ADOPTING GFOAS FINANCIAL

POLICIES Improves governance:

o Highlights policies of sound financial management;o Improves the understanding of budget orientations;o Allows to debate and approve annually budget guidelines at the

municipal Council;o Improves transparency;o Improves equity between generations;o Improves financial and administrative management;o

Improves the democratic process. Once formally adopted, improves managements ability to enforce policies.

Provides enhanced protection for citizens, municipal entities, from certaindifficulties.

Highlights current policies and facilitate the implementation of new policiesand management practices.


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Cities that adopt GFOAs practices are officially recognized by the GFOA(Appendix 1) and credit rating agencies take this into account in theirevaluation.

In general, Ontario cities have better credit ratings because they adoptand use higher financial standards.

Consequently one can predict improved credit ratings for thosemunicipalities.


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6. REASONS TO ADOPT FINANCIAL POLICIESOver the years most cities have adopted good management principles. Even thoughthese practices exist they are rarely summarize in the budget document. The Quebecmunicipal law lists a number of practices including the obligation of having a balancedbudget. The Quebec Municipal Affairs Department publishes a Manual on thePresentation of Municipal Financial Information (Updated October 2001).Municipalities must adopt and follow those practices. (Appendix 2)

GFOA is formally committed to encouraging governments to implement therecommendations of the Budget Council. We believe this proposed recommendedpractice could serve as a strong practical impetus for governments to implement many,if not all, of the Budget Councils recommendations on financial policies.

This proposed recommended practice is not a novel or radical departure from currentbudgetary practice, but rather builds upon and supports what many governments arealready doing.

By asking governments to formally adopt and clearly communicate the rules ofengagement governing the budget process, this proposed recommended practiceoffers the promise of significant practical benefits to all stakeholders in the budgetprocess and encourages their active and informed participation.


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What we propose is consistent with Quebec Public Administration Bill 82 (Appendix 3)which:

States that the Government should prioritize, in the design and implementationof public administration rules, quality of services provided to its citizens;

Specifies management practices should be based on results with previously

determined objectives and consistent with transparency guidelines; Acknowledges the role of elected officials with respect to governmental actions

and their contribution to improving services to its citizens by encouraging theaccountability of the government to the National Assembly.

Our proposal is consistent with Ontarios Bill 46, An Act respecting the accountability ofpublic sector organizations, 2001. (Appendix 4) This proposed bill:

Requires that state funded bodies manage their activities consistent withrecognized best practices (measuring performance against established goals,financial practices, business plans);

Applies to all public sector organization that receives government financialassistance and most specifically municipalities, school boards, hospitals,colleges and universities and other Crown agencies, etc.


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What we propose goes in the same direction as the bill 106 (see appendix 5) whoauthorizes the Minister of Affaires municipales et de la Mtropole:

To introduce, after consultation with the municipalities representativeorganizations, the indicators of performance relating to the administration ofthe municipalities and other municipal organizations

To prescribe the conditions and procedures of establishment To also allow him to prescribe the methods of how the citizens must be

informed of the actual results through the applied indicators of performance.

We believe our proposal is also a required additional step to Quebecs municipal

mergers law (Bill 170).

Moreover, the Canadian Institute of Chartered Accountants (CICA) is in the process ofreevaluating the accounting standards. The committee has been given the task ofexamining the changes that must be made to quickly fix loopholes in Canadianaccounting standards. The work of the committee is a result amongst others of the

ENRON bankruptcy.

CICA will soon recommend measures of disclosure on asset condition, deferredmaintenance and on governments infrastructure management plan.


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The budget document for the City of Regina, Saskatchewan, provides an excellentexample of the type of approach we wish to recommend. Those budget principles were

adopted in 1989. You will find in appendix 6 a copy of the relevant pages of thatdocument.

The City of Yellowknife has implemented the GFOA Recommended Practice, Adoptionof Financial Policies in its 2001 Budget.


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7. SUMMARYFor municipal bodies, adopting financial policies:

Is consistent with the trend towards improved transparency;

Improves financial and budgetary management;

Improves disclosure of long-term financial and budgetary orientations to allstakeholders;

Improves the accountability of municipal and provincial governments;

Encourages greater participation of taxpayers;

Allows auditors to improve their reports on financial performance of municipalbodies.


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8. RECOMMENDATIONSWhile the adoption of financial policies should apply to all government bodies, we limitourselves in this document to municipal entities.

To recommend to Municipal Councils to use GFOAs financial practices as a basein the budgetary process of municipalities.

To develop measures to help municipalities to implement these financial andbudgetary practices.


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The GFOAs 100th annual conference will be held in Montreal in

2006

This conference will host more than 8 000 participants.


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APPENDIX 1

Government Finance Officers Association

Awards Criteria

Distinguished Budget Presentation Awards Program

(and explanations of the Criteria)


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Distinguished Budget Presentation Award (Budget Awards Program)

The Budget Awards Program is designed to encourage governments to prepare budgetdocuments of the highest quality to meet the needs of decision-makers and citizens.During FY 2001, approximately 925 governments are expected to submit budgets tothe program.

To be eligible to the award budget documents have to cover the four areas listed belowwith criteria to follow in each one:

A. Policy DocumentB. Financial PlanC. Operations Guide

D. Communication Device


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Distinguished Budget Presentation Awards Program

Government Finance Officers AssociationAwards Criteria

** Note: Mandatory Criteria must be satisfied by applicant to receive award **

A. POLICY DOCUMENT

1. The document should include a coherent statement of organization-wide financialand programmatic policies and goals that address long-term concerns and issues.

2. The document should describe the organization's short-term financial andoperational policies that guide the development of the budget for the upcoming year.

3. The document should include a coherent statement of goals and objectives oforganizational units (e.g., departments, divisions, offices or programs).

4. Mandatory: The document shall include a budget message that articulates prioritiesand issues for the budget for the new year. The message should describe significantchanges in priorities from the current year and explain the factors that led to thosechanges. The message may take one of several forms (e.g., transmittal letter, budgetsummary section).


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B. FINANCIAL PLAN

1. The document should include and describe all funds that are subject toappropriation.

2. Mandatory: The document shall present a summary of major revenues andexpenditures, as well as other financing sources and uses, to provide an overview ofthe total resources budgeted by the organization.

3. Mandatory: The document shall include summaries of revenues, and otherresources, and of expenditures for prior year actual, current year budget and/orestimated current year actual, and proposed budget year.

4. Mandatory: The document shall describe major revenue sources, explain theunderlying assumptions for the revenue estimates and discuss significant revenuetrends.

5. Mandatory: The document shall include projected changes in fund balances, asdefined by the entity in the document, for governmental funds included in the budget

presentation, including all balances potentially available for appropriation.6. The document should include budgeted capital expenditures and a list of majorcapital projects for the budget year, whether authorized in the operating budget or in aseparate capital budget.


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7. The document should describe if and to what extent capital improvements or othermajor capital spending will impact the entity's current and future operating budget. The

focus is on reasonably quantifiable additional costs and savings (direct or indirect) orother service impacts that result from capital spending.

8. Mandatory: The document shall include financial data on current debt obligations,describe the relationship between current debt levels and legal debt limits, and explainthe effects of existing debt levels on current and future operations..9. Mandatory: The document shall explain the basis of budgeting for all funds, whetherGAAP, cash, modified accrual, or some other statutory basis.


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C. OPERATIONS GUIDE

1. Mandatory: The document shall describe activities, services or functions carried outby organizational units.

2. The document should provide objective methods to measure progress towardaccomplishing the government's mission as well as specific unit and program goals andobjectives.

3. Mandatory: The document shall include an organization chart(s) for the entireorganization.

4. Mandatory:A schedule(s) or summary table(s) of personnel or position counts forprior, current and budgeted years shall be provided, including descriptions of significantchanges in levels of staffing or reorganizations planned for the budget year.


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D. COMMUNICATION DEVICE

1. The document should provide summary information, including an overview ofsignificant budgetary issues, trends, and resource choices. Summary informationshould be presented within the budget document either in a separate section (e.g.,executive summary) or integrated within the transmittal letter or other overviewsections.

2. The document should explain the effect, if any, of other planning processes (e.g.,strategic plans, long-range financial plans, capital improvement plans) upon the budgetand budget process.

3. Mandatory: The document shall describe the process for preparing, reviewing andadopting the budget for the coming fiscal year. It should also describe the proceduresfor amending the budget after adoption. If a separate capital budget process is used, adescription of the process and its relationship to the operatingbudget should be provided.

4. Mandatory: Charts and graphs shall be used, where appropriate, to highlight

financial and statistical information. Narrative interpretation should be provided whenthe messages conveyed by the graphs are not self-evident.

5. The document should provide narrative, tables, schedules, cross-walks or matricesto show the relationship between different revenue and expenditure classifications(e.g., funds, programs, organization units).


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6. Mandatory: The document shall include a table of contents to make it easy to locateinformation in the document.

7. A glossary should be included for any terminology (including abbreviations andacronyms) that is not readily understood by a reasonably informed lay reader.

8. The document should include statistical and supplemental data that describe theorganization and the community or population it serves, and provide other pertinent

background information related to the services provided.

9. The document should be printed and formatted in such a way to enhanceunderstanding and utility of the document to the lay reader. It should be attractive,consistent and oriented to the reader's needs.

April 2001

All rights reserved. The awards criteria and explanations may not be reproduced

in whole or in part without written permission from the GovernmentFinance Officers Association, 180 North Michigan Avenue, Suite 800, Chicago, IL60601-7476.


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APPENDIX 2

QUBEC FINANCIAL INFORMATION MANUAL


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THE MANUAL (Updated October 2001 )

The Quebec Manuel de la prsentation de l'information financire municipale isused by all municipal bodies including local and regional municipalities, urban ormetropolitan communities, inter-municipal agencies and public transport commissions.

This manual includes amongst other things general notions, accounting policies, chartof accounts definitions and guidelines for the presentation of financial information. Itdefines accounting methods and provides information on the particulars of municipalaccounting in Quebec.

Financial reports and budgetary forecasts of municipal bodies must follow principlesand rules spelled out in the manual and reflect legislative dispositions that govern thepresentation of financial information.


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APPENDIX 3:

Quebec Public Administration Act (Bill 82)


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The government management framework shall focus more specifically on

(1) Responsiveness, in making management decisions, to the expectations

expressed by the public in light of available resources;

(2) The achievement of results in relation to stated objectives;(3) Greater flexibility, through the adaptation of management rules to the particular

situations of departments and bodies;

(4) Recognition of the role of deputy ministers and chief executive officers in

implementing controls in relation to results-based management;(5) Accountability reporting based on performance in achieving results;

(6) Optimum use of the resources of the Administration;

(7) Giving the National Assembly access to relevant information on the activities of

the Administration.


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For the purposes of this Act, the Administration comprises:

(1) The departments of the Government;

(2) All budget-funded bodies, namely all bodies all or part of the expenditures ofwhich are provided for in the estimates tabled in the National Assembly otherwisethan under a transferred appropriation

(3) All bodies whose personnel is appointed in accordance with the Public Service Act(chapter F-3.1.1);

(4) All bodies a majority of the members or directors of which are appointed by theGovernment or by a minister and at least half of the expenditures of which areborne directly or indirectly by the consolidated revenue fund.


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APPENDIX 4

A PROPOSED ACT (BILL 46) RESPECTINGTHE ACCOUNTABILITY OF

PUBLIC SECTOR ORGANIZATIONS

PROVINCE OF ONTARIO


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1. The following are the purposes of this Act:

1. To initiate best practices in public sector organizations by measuring theirperformance against their established goals and by reporting publicly on the progressmade.

2. To improve program effectiveness and accountability to the public by promoting astronger focus on the results and the quality of service of public sector organizations.

3. To improve the delivery of service by requiring that each public sector organizationprepares a plan to meet identified objectives and to provide information about theresults and quality of service that are achieved.

4. To improve decision-making in public sector organizations by ensuring that relevantinformation is made available to the public about the organization's objectives and

about the effectiveness and efficiency of its activities.5. To improve the fiscal responsibility of public sector organizations by requiring themto prepare a balanced budget each year.


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2. The following entities are the public sector organizations to which this Act applies:

1. Every agency of the Crown in right of Ontario and every authority, board,commission, corporation, office or organization of persons a majority of whosedirectors, members or officers are appointed or chosen by or under the authority of theLieutenant Governor in Council or a member of the Executive Council.

2. The corporation of every municipality in Ontario.

3. Every local board as defined in the Municipal Affairs Actand every authority, board,commission, corporation, office or organization.

4. Every board as defined in the Education Act.

5. Every university in Ontario and every college of applied arts and technology andpost-secondary institution in Ontario.

6. Every hospital.

7. Every board of health under the Health Protection and Promotion Act and everyboard of health under an Act of the Assembly that establishes or constitutes a regionalmunicipality.


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APPENDIX 5

An Act to amend various legislative provisions concerning

municipal affairs


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EXPLANATORY NOTES

This bill enacts, amends or removes various provisions governing municipal

bodies.

The bill amends the Act respecting the Ministre des Affaires municipales etde la Mtropole to provide for a power authorizing the Minister to establish,after consultation with bodies representing municipalities, performanceindicators in relation to the administration of the municipalities and othermunicipal bodies, and to prescribe the conditions and implementationprocedures. The Minister is also empowered to prescribe the terms accordingto which the citizens are to be informed of the results measured using theperformance indicators.


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ACT RESPECTING THE MINISTRE DES AFFAIRES MUNICIPALES ETDE LA MTROPOLE

175.The Act respecting the Ministre des Affaires municipales et de la Mtropole(R.S.Q., chapter M-22.1) is amended by inserting the following section after section17.6 :

"17.6.1. The Minister may, after consultation with the bodies representing municipalities

including the Union des municipalits du Qubec and the Fdration qubcoise desmunicipalits locales et rgionales (FQM), establish performance indicators thatrelate to the administration of municipal bodies and prescribe the conditions andprocedures for the implementation of the indicators in municipal bodies.

The Minister may, for that purpose, classify municipal bodies into categories and

establish performance indicators or conditions and procedures of implementation thatmay vary according to the categories of municipal bodies.

The Minister may also prescribe the manner in which municipal bodies are to providecitizens with the information determined by the Minister regarding the results measuredusing the performance indicators.

The Minister may exempt any municipal body from the application ofperformanceindicators for any period the Minister determines.

For the purposes of this section, "municipal bodies" means the bodies referred to insection 5 of the Act respecting Access to documents held by public bodies and theProtection of personal information (chapter A-2.1)."


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APPENDIX 6

City of Regina

Budget Principles


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REGINA BUDGET PRINCIPLES

Budget principles were first defined during the 1989 budget process, and werereviewed and updated in each successive budget process. The principles included:

1. The City will pursue continuous improvement of quality of life through socialand economic development which respects the sustainability capacity of our

human, fiscal and environmental resources.2. Should a mill rate increase be required, the city will keep mill rate increases

at or below inflation.

3. The City will produce a balanced budged each year and ensure operating

results achieve a balanced position or surplus.

4. The City will preserve basic, established service levels to community-basedorganizations.

5. The City will preserve and renew its infrastructure, as a priority over

developing new infrastructure.

6. The Utility will be self-supporting, with revenues covering capital andoperating costs. The utility will transfer funds to the Citys general operatingbudget to help pay for services that benefit all Regina citizens. Utility rateswill be established to ensure equity and the Citys commitment to

conservation.


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7. The City will fund general capital projects on a pay as you go basis , with

the use of debt financing used for utility capital projects, or significant, non-recurring general capital projects.

8. The City will maintain or improve tax comparisons with Winnipeg, Saskatoon,Calgary and Edmonton.

9. The City will continue to review and adjust user fees as necessary to ensurethat the funding of services maintains a reasonable balance between userfee revenues and funding from the general revenue base of the City.

10. The City will maintain strong financial reserves.

11. The City will maintain or improve the current AA+ rating.

12. The City is committed to enhanced staff development, training,communication, participation and employee health.

13. The City will maintain the financial sounded of employee pensions plans.

Improve the financial and budgeting management

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