File photo by LANA MICHELIN/Advocate staff

Red Deer City council looks at needs versus wants

Capital budget discussions continued at city hall Wednesday

The smallest, no-frills capital budget in a decade is being considered by Red Deer City Council.

The biggest projects on the table deal with ‘needs’ rather than ‘wants’: water utility infrastructure upgrading, wastewater treatment plant rehabilitation and replacement, crown paving and road reconstruction.

With the proposed budget just over $81 million, several large building projects, including the Northlands Drive connector road, are being delayed for several years. This prompted Coun. Buck Buchanan to question, during Wednesday’s capital budget meeting, how will the road postponement impact city traffic?

City Manager Craig Curtis responded traffic flow in Red Deer can be studied over the next year. If congestion is noticed, he said, council can reintroduce the Northlands Road construction in next year’s budget. As it stands, construction is slated to start in 2021 and be completed in 2027.

The budget for 2018 has been adapted for Red Deer’s difficult financial realities. With the recession of the past few years significantly reducing city revenues, “we are adjusting the sails in a fairly major way,” said Curtis.

Mayor Tara Veer said the capital budget was already pared down by $26 million from what it was anticipated to be. “We’re doing our due diligence” to find even more saving, she added.

Although the local economy is believed to have increased by 3.5 per cent this year after two years of shrinking growth, Curtis noted there‘s typically a two-year lag before municipalities begin to feel the results of an economic recovery.

Another reason for careful spending is the provincial government is “restructuring” its Municipal Sustainability Fund. Curtis said this could impact how much money is received by the city from a fund that was to provide predictable government funding to municipalities.

Chief Financial Officer Dean Krejci said most of the budget will come from reserves, but some borrowing will also be required.

While some citizens expressed concern over the municipal debt level, Krejci said 2018’s debt load is estimated to be at 59 per cent of the allowable limit. The city is prepared to deal with any unexpected costs that arise from several reserve funds, he added. “We will not go bankrupt.”

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