A newly elected Red Deer city council begins number-crunching today as they deal with leanest draft capital budget of the last five years.
The municipal leaders, elected on Oct. 18, will pore over 84 budgetary items before finalizing the capital budget, which so far stands at $87 million. Last year’s capital budget rang in at nearly $107 million, while the 2009 budget was considerably higher at nearly $473 million. In 2006, the budget was about $100 million.
News media were told on Tuesday that the global recession is continuing to hit the City of Red Deer hard.
City manager Craig Curtis said that lower revenues, as well as reduced provincial funding through the Municipal Sustainability Initiative, have pushed city administrators to get tight with department budgets once again, as they did last year following the downturn in the international market.
“We have to really totally adjust the budget to what we can afford,” Curtis said.
Mayor Morris Flewwelling said next year’s capital budget shows that the city is moving slowly with projects that are needed in the community. Any desired projects have been delayed.
“We haven’t deleted anything but we have certainly slowed the budget,” said Flewwelling. “And I think there is as much disappointment internally as there is going to be externally. We don’t have the luxury of funding for the things that we would like to do — a lot of those are in the Community Services area.”
The biggest capital item is Riverlands subdivision development to the tune of $17.8 million, with a large chunk of that slated for relocating the transmission line underground.
The second largest cost is $5.9 million for replacing fleet vehicles.
Council will also be asked to approve crown paving of roads at a projected cost of nearly $5.5 million.
Administration has also recommended an additional amount of $4.3 million towards front-ending a regional sanitary trunk to be constructed in conjunction with the first phase of the ring road that will be built on the northeast side, also known as the North Highway Connector. Council previously approved $81.8 million and $19.9 million to construct the major utility component.
“The initial impetus is to get the services across the river and the fill on either side of the river which will allow growth on the northeast,” said Curtis.
Also being proposed is some land development done by the City of Red Deer — phase one Garden Heights north of 67th Street and east of the Red Deer River, as well as some work within Queens Business Park.
Some downtown development will also occur, particularly the extension of 55th Street west of Gaetz Avenue, plus the revitalization of Gaetz Avenue from 46th Street to 53rd Street.
“There are certain essential things we have to do — maintaining our asphalt paving program and making sure our wastewater and water treatment plants keep up to the standards,” said Curtis. “That’s meant the reduction of some projects that we would all like to do, but had to be deferred and in many cases beyond 2020.”
Council will be asked to review the city’s 2011-2020 capital plan, which includes pushing the Central Alberta Aquatics Centre 50-metre pool project from 2020 to at least 2021.
Also not included in the capital plan are a performing arts centre and concert hall.
“For many people, when you look at 10 years, that’s the end of the world, but when you look at some of the big projects — five years is sort of a blink,” said Flewwelling, adding the downtown library took about 10 years to get developed.
Curtis said the city will be able to afford this 10-year capital plan and well within the allowable debt limit, plus any other provincial and federal grants that may come forward.
Last year, the city was only able to allocate dollars for the first five years of the 10-year capital plan.
“The debt continues to go up and then plateaus over a number of years,” said Curtis.
The debt will rise to a projected $238.3 million — $90.5 million of which is supported through taxes, $95.2 through utilities and $52.6 million through offsite levies.
Dean Krejci, financial services manager, said the city would be at 63 per cent of the total debt load. The city is within the estimated debt limit for the next decade, as allowed by the Municipal Government Act.
The main source of debt relates to the simultaneous expansion of the city’s wastewater and water treatment plants. That debt is paid through utility revenues, not through taxes.
Council will begin deliberating over the 2011 operating budget on Jan. 4.
ltester@www.reddeeradvocate.com