The Alberta recession’s fingerprints were all over City of Red Deer’s 2018 capital budget.
Council trimmed, tweaked, shuffled and rescheduled to make the numbers work while ensuring the “needs” were addressed.
When finely sharpened budget pencils were put down on Friday morning, council approved a $80.7-million capital budget — far less than originally projected.
The city is “realizing the full effects of the provincial recession, said Mayor Tara Veer on Friday morning, following two full days of budget wrangling that began on Wednesday.
“The budget that council ultimately approved is $29 million less than what we were anticipating this time last year.
“That really is a direct reflection of our economy.”
Council is not expecting number-crunching will be any easier when the operating budget debate begins next month.
“In the operating budget we will be grappling with the fact user fees are down in areas such as recreation and transit.”
As well, the city does not know for certain how much funding it will get from higher levels of government. Municipalities rely heavily on those grants, said Veer.
“We are functioning in a climate of uncertainty of where the provincial and federal governments will go with their grants.”
Much of the capital spending will focus on infrastructure replacement and upgrading. Roads, stormwater and sewage lines will be added or replaced, with some money set aside to upgrade sports fields and Bower Ponds.
“With Red Deer continuing to see the residual effects of slower growth in our community, we are focusing our investments towards projects and infrastructure that ensure our sustainability,”
“We recognize the importance of keeping tax rates as low as possible for our citizens while the economy moves through a state of recovery.
One of the bigger examples of the budget belt-tightening, was a decision early on to delay construction of the Northland connector road for up to three years.
Besides reducing spending expectations, council had to shuffle cash around to ensure there was enough available to cover the cost and repayment obligations for the services largely already in the ground for new development.
Normally, the levies developers pay covers the cost. But the recession has significantly cooled new construction and levy cash is only trickling in.
“The payback is proving to be challenging because there just isn’t the market up-tick from new development,” said Veer.
To ensure cash is on hand for future servicing, council approved borrowing $10.5 million from one of the city’s reserve funds as a temporary measure.