What budgets are municipalities responsible to manage?

Every municipality is responsible to manage two types of budgets: operating budgets and capital budgets.

• Operating budgets pay for short-term operating expenses and expenditures, for example, for salaries, rent, utilities, materials, supplies, bank fees, and debt charges.
• Capital budgets pay for long-term assets that have a significant value and useful life, for example, vehicles, machines, heavy equipment, and buildings.

All municipalities in New Brunswick must manage two operating budgets: general operating and utility operating. The general operating budget contains revenues and expenses for all services not directly related to water, wastewater, and utilities. The utility operating budget, as you may have guessed, contains revenues and expenditures for all services that are directly related to water, wastewater, and utilities. Operating budgets are one-year budgets that must be submitted to the province each year in November for the following year. In any given year, for either budget, if total revenue exceeds total expense or expenditure, the surplus must be carried forward two years (that is, a surplus in 2025 must be carried forward to the 2027 budget). If the reverse occurs, and expense or expenditure exceeds revenue, the deficit must be carried forward two years.

Capital plans are multi-year plans that define the capital projects that municipalities will execute to add or upgrade capital assets. For example, to add a new fire truck or build a new recreation centre. To secure Canada Community Building Fund (CCBF) funds from the federal government, which provide hundreds of thousands of dollars to municipalities such as Five Rivers, Council must prepare and submit a special 5-year plan to the province (the province administers the CCBF program for the federal government). In addition to the CCBF plan, the municipality can (and should) develop its own long-term capital plan, in which other projects are paid for through savings, grants, or debt (long-term borrowing). In most cases, municipalities transfer any annual surpluses in their operating budgets into long-term capital funds, or capital savings, that the municipality can then use to pay for capital projects.