During this week’s Council meeting, Council gave first three readings to several bylaws and authorized the transfer of funds between two reserves (see November 5, 2024, Council briefs). These actions followed recommendations in a report to Council on October 8 to streamline reserves and created some new required reserves.
What is a reserve?
Reserves are like savings accounts, which are used to make sure the Village can maintain existing municipal infrastructure and regular operations without extraordinary tax increases. The Village of Lytton can build up reserve funds using revenue sources like property taxes, fees, grants, and developer contributions.
The Village currently has the following:
- General reserves for future operating or capital projects
- Statutory reserve funds set aside for specific purposes
- Several reserves resulting from funding (like the provincial Climate Adaptation Program) and contribution agreements with restrictions on the use of the funds
- Recovery funding to manage to ensure adequate funds are available to complete projects and fulfil the contribution agreements
Reserves are important, because they provide financing for long-term projects and help ensure financial stability and sustainable service delivery. They are also an important tool for strategic asset management.
Current situation of reserves
As part of their recent strategic planning session, Council reviewed the Village’s overall financial position, including contributions to reserves. This process highlighted that fact that before the 2021 fire, residents and businesses were not paying adequate taxes to pay for the services provided by the Village and to contribute to healthy municipal reserves.
As stewards for the Village, Council is focused on good governance and the long-term financial sustainability of the municipality and its services, including maintaining or replacing existing and future infrastructure and assets. This means that they will need to look at ways to increase contributions to reserves for the future.