Unspent grant money will not slip through the cracks in the Northern Rockies Regional Municipality after council approved a dedicated reserve account to hold surplus grant funding for future budget years.
Council voted Monday to authorize the creation of a reserve account for its government transfer program, capping the fund at 25 per cent of the program’s annual budget.
Toni Pike, the municipality’s director of finance, told council the move gives the local government a mechanism to set aside leftover money and unspent contract funds for future community initiatives.
“We identified within our discussions on the government transfer program that we would have the opportunity to establish a reserve account that would hold funds from a given budget year for use in a future budget year,” Pike said.
Under the framework, unallocated funds at the end of each fiscal year, along with money returned to the municipality when an agency does not spend it under an approved contract, will go into the reserve account.
Council settled on a maximum of 25 per cent to prevent unspent money from accumulating indefinitely. Surplus funds exceeding that threshold will automatically be transferred to the municipality’s discretionary financial stabilization reserve fund.
“What it does is it automates the process so that we can identify that we want to be protected in any given year by having a set amount of funds available for future requests or future budgets, but not build the reserve account to an amount that doesn’t seem reasonable,” Pike explained.
Mayor Rob Fraser saidthat based on the program’s typical annual budget of around $1 million, the 25 per cent ceiling would allow the reserve to hold up to $250,000.
“I don’t expect it to go there the first year, so it may take multiple years for it to build up to where that maximum is,” Fraser noted.
“In the meantime, there may be years where we’re using it, where we’re drawing from it, and that’ll give us a little better idea what it should be sitting at. So I don’t have a problem with the 25 per cent.”
Councillors also highlighted the importance of ensuring the reserve’s guidelines and balances are clearly communicated to incoming council members in the future.
“I think that this is such an important piece that I would like to ensure that the next council is made aware of this as soon as possible,” said Deputy Mayor Leslie Gerwing, noting that municipal learning curves can be steep for incoming leaders.
“That historical perspective I think is so important, and also the fact that the amount can be changed at any point.”
Pike assured council that the municipality’s reserve policies, including updates on fund balances and actual expenditures, will be integrated into the annual budget presentations, year-end wrap-up reports, and new councillor orientation packages.
Council voted unanimously in favour of establishing the reserve account and setting the 25 per cent cap.
