FAS-004 - Operating Budget Policy 20261
City of Saint John
Operating Budget Policy
Title: Operating Budget Policy
Subject: Operating Budget Category: Finance and Strategic Services
Policy No.: FAS-004 M&C Report No.: 2026-226
Effective Date: 2018-04-23 Next Review Date: 2029-10-05
Area(s) this policy applies to: Cross Corporate Office Responsible for review of this Policy:
Finance and Strategic Services
Related Instruments:
FAS-001 Asset Management Policy
FAS-002 Investment Policy
FAS-003 Operating and Capital Reserves Policy
FAS-005 Capital Budget Policy
FAS-006 Debt Management Policy
FAS-020 Long Term Financial Plan Policy
FAS-021 Budget Monitoring Policy
Policy Sponsors:
Chief Financial Officer
Document Pages:
This document consists of 7 pages.
Revision History:
Common Clerk's Annotation for Official Record
I certify that the Operating Budget Policy Statement was adopted by Common
Council on October 5, 2026
I certify that the Operating Budget Policy was approved by the Chief
Administrative Officer on
October 5, 2026
Common Clerk
Date
Date Updated: Common Council Approval Date: Contact: 2026-08-13 2026-10-05 Finance and Strategic Services
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City of Saint John
Operating Budget Policy
TABLE OF CONTENTS
1. POLICY STATEMENT ...................................................................................................................... 3
2. DEFINITIONS ................................................................................................................................ 3
3. PRINCIPLES AND STRATEGIES .......................................................................................................... 4
4. AUTHORITY .................................................................................................................................. 4
5. USE OF NON-RECURRING REVENUES ............................................................................................... 5
6. USER CHARGES & FEES ..................................................................................................................... 5
7. GRANTS ......................................................................................................................................... 6
8. VARIANCE REPORTING...................................................................................................................6
9. ROLES AND RESPONSIBILITIES...........................................................................................................6
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City of Saint John
Operating Budget Policy
1. OPERATING BUDGET POLICY STATEMENT
1.1 The purpose of this policy is to outline the financial principles governing the
funding of the City operating budget;
1.2 Operating budget planning shall comply with all relevant provisions of the Local
Governance Act and all other applicable legislation;
1.3 The City's objectives with respect to the Operating Budget Policy are as follows:
1.3.1 Strengthen Financial Sustainability by budgeting recurring expenditures with
recurring revenues and allocating non-recurring revenues to non-recurring
expenditures or reserves;
1.3.2 Reduce Financial Vulnerability by gradually decreasing reliance on sources of
revenue outside its controls such as operating grants from other government
sources.
2. DEFINITIONS
Operating Budget - Council approved plan containing the revenue and expenditure allocations
required to provide City programs and services, including the Utility fund, for the current fiscal
year which must be aligned with a Council Approved Long Term Financial Plan;
Basis of Budgeting - All budgetary procedures will conform to the New Brunswick Local
Governance Act, the Local Government Budgets Regulation, and all applicable provincial financial
reporting standards;
Structurally Balanced Budget - A budget for which recurring operating revenues are sufficient
to fund recurring operating expenses, ensuring compliance with the statutory balanced budget
requirements of the New Brunswick Local Governance Act and the Local Government Budgets
Regulation;
Non-Recurring Revenues - Revenues that the City cannot reasonably expect to receive on an
ongoing basis. The source is most likely one-time if any of the following applies:
• Has a set ending date ranging between 12-36 months with the exception of
intergovernmental funding agreements designed to improve long-term
sustainability;
• Revenue spikes due to higher-than-normal transactional activity;
• One-time transactions, such as the sale of assets or insurance proceeds;
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City of Saint John
Operating Budget Policy
3. PRINCIPLES AND STRATEGIES
3.1 The City will utilize the following principles and strategies in making decisions
related to the operating budget:
3.1.1 Alignment with Strategy- The City's budgeted operations shall be in line with
agreed upon Council priorities and the Long Term Financial Plan;
3.1.2 Affordability - The City must be able to bear the budgeted costs of providing
services without incurring financial difficulty or risking other undesirable
consequences;
3.1.3 Innovation - Implementation of operational efficiencies, continuous
improvement initiatives, and new revenue generation strategies will be
considered when planning the operating budget;
3.1.4 Sustainability - The operating budget will be produced with a long-term
focus on achieving a structurally balanced budget; giving taxpayers a better
representation of the link between financial resources and services that can
be delivered over the long term;
3.1.5 Diversification - The City will seek to improve its mix of operating budget
revenues to the extent feasible within the confines of the Local Governance
Act, and other applicable legislation.
3.1.6 Statutory Compliance - The annual operating budget will be prepared in
accordance with the New Brunswick Local Governance Act and its
regulations.
4. AUTHORITY
4.1 The operating budget establishes the spending authority for all Service Area activities
and initiatives;
4.2 Operating budgets, at the Service Area level, cannot be reallocated without Council
approval;
4.3 Executive Leadership Team is responsible for managing activities within their existing
budget;
4.4 In cases where significant budget overruns are expected due to Emergencies such as
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City of Saint John
Operating Budget Policy
severe weather conditions or EMO events, such cost overruns can be approved by the
Chief Administrative Officer in advance and must be reported back to the Finance
Committee as per Section 8 of this Policy together with recommended mitigation
measures.
5. USE OF NON-RECURRING REVENUES
5.1 Non-recurring revenues shall be directed to one-time uses and away from funding
ongoing services. Examples of non-recurring revenues would include one-time sale of
assets. Examples of acceptable uses would include funding Pay-As-You-Go for capital
expenditures that would otherwise be funded by debt, funding the infrastructure
deficit, or building up capital or operating reserves;
5.2 Short term revenue spikes should be treated in a similar way to non-recurring revenue.
6. USER CHARGES AND FEES
6.1 The City will seek to balance the need for services and the ability to raise fees, charges,
and taxes to support those services. User fees will be assessed relative to the cost of
providing the services;
6.2 Service areas should assess the cost of activities supported by user fees on an annual
basis to identify the impact of inflation and other cost increases;
6.3 Council may decide against full cost recovery in cases where greater public benefit is
demonstrated;
6.4 Factors suggesting a higher level of cost recovery include (1) the service is similar to
services available in the private sector or through another agency; (2) there is a strong nexus
between the amount paid and the benefit received; (3) the goal is to discourage use of a
service or limit demand; (4) the service is regulatory.
6.5 Factors suggesting a lower level of cost recovery include (1) there is a community wide
benefit to the service; (2) the fee will discourage compliance with regulation;
(3) there is a weak correlation between the amount paid and benefit received; (4)
collecting the fee is not effective; (5) is an emergency service that may depend on no
notice.
6.6 Service areas should develop cost recovery policies that will be used as a basis for
setting the charges or fees, as well as the service cost recovery goals based on
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City of Saint John
Operating Budget Policy
quantitative targets (percentage recovery targets) and how the charges and fees will be
levied and collected.
7. GRANTS
7.1 Inter-Governmental funding opportunities will be pursued for initiatives that are in
line with Council priorities, the approved budget, and the Long Term Financial Plan;
7.2 Any opportunities falling outside the criteria in 7.1 will require Council approved
adjustments to the budget and the Long Term Financial Plan and be supported by a
business case.
8. VARIANCE REPORTING
8.1 The Finance Committee shall be informed on a timely basis on all significant
unfavorable financial matters and will receive, as a minimum, quarterly financial budget
variance reports;
8.2 Executive Leadership Team is responsible for presenting a quarterly report analyzing
material variances and causes of such variances to the Finance Committee for their
service areas.
9. ROLES AND RESPONSIBILITIES
9.1 Council shall:
9.1.1 Approve the operating budget as recommended by the Finance Committee;
9.1.2 Establish priorities through the Long Term Financial Plan.
9.2 The Finance Committee shall:
9.2.1 Review the operating budget and make recommendations for Council
approval;
9.2.2 Ensure the operating budget is aligned with the Long Term Financial Plan
9.3 The Chief Administrative Officer shall:
9.3.1 Direct the preparation and presentation of the operating budget;
9.3.2 Exercise financial control over all corporate operations in conjunction with
the Chief Financial Officer to ensure compliance with the operating budget
approved by Council.
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Operating Budget Policy
9.4 The Chief Financial Officer and Finance Team shall:
9.4.1 Prepare long range revenue and expenditure forecasts;
9.4.2 Review departmental budgets with individual departments;
9.4.3 Analyze and make recommendations on budget requests;
9.4.4 Review the consistency and alignment between budget requests and overall
budget goals;
9.4.5 Consolidate all budget requests and their impact into a package that clearly
communicates the City's budget objectives, pressures, and linkage to the
City's Long Term Financial Plan.