Council sticks to capital savings plan

Council saves another $1 million for future capital projects instead of borrowing.

Red Deer city council trimmed the amount to be set aside for future capital projects on Friday.

The budget called for transferring $1.279 million to a fund that will be used to finance future projects so the city doesn’t have to borrow as much.

Coun. Tanya Handley proposed holding off on the transfer for a year to bring the tax rate increase down below one per cent for the 2017 city budget.

However, other councillors were reluctant to drop a capital savings plan contribution entirely. After much deliberation, council opted to transfer $1 million and leave the rest in the operating budget.

Handley supported that compromise.

Coun. Lynne Mulder said the long-term consequences of not putting aside the money outweighed the benefits of saving a few dollars on residents’ tax bills.

She remained opposed to reducing the amount.

“I just don’t think that’s strong leadership. I think it’s taking the easy way out.”

Coun. Paul Harris also didn’t like reducing the amount going to capital. Not putting aside enough money for capital projects would leave a future council having to either raise the city’s debt limit, borrow money for longer terms, or take projects out of the capital plan.

He did not want to see a situation where future generations would be saddled with borrowing costs, preferring to see the city “pay as you go.”

Other council members suggested enough money was transferred to keep the capital plan strong. This year’s shortfall could be made up in future years after the economy has improved.

In other final budget day decisions:

•Council opted to provide $81,750 in 2017 and $27,250 in 2018 to Volunteer Central, an organization that recruits and trains volunteers for more than 100 local groups. Volunteer Central is waiting on provincial funding so the city will provide $109,000 in bridge funding to keep the doors open. When provincial money comes in, less city funding will be needed and will be returned. Council also agreed to pay off a $9,000 debt owed by Volunteer Central.

•The Red Deer Royals will be recognized as official ambassadors for the city. The organization approached the city last year for annual funding and official recognition as ambassadors. Instead, council approved a $250,000 contribution to a new fieldhouse, which will become the permanent home and practice field for the marching band.

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