A request to borrow another $1.57 million for two infrastructure projects raised eyebrows among two Red Deer rookie councillors on Monday.
Councillors Chris Stephan and Paul Harris wondered why administration was coming back with requests so high.
The Riverside Drive trunk twinning project in coming in at $28.29 million after an additional $950,000 in borrowing was sought.
Another project, which would cover water infrastructure on Riverside Drive as part of the North Highway Connector ring road, would need another $625,000 in borrowed funds. The project bill would come to $11.67 million.
“I know we have to do this but to think we’re out that much,” said Harris.
Engineering Services Department director Frank Colosimo said the original budget for the water project had changed, partly because material prices escalated.
Installing pipe in that location along Riverside Drive was also challenging.
The borrowing on the water project comes years after one phase of it was approved in 2000 and another part of it in 2006.
“We should have gotten a new estimate,” said city manager Craig Curtis.
Council was told that this is fairly standard practice for city administration to come back with requests to borrow money for essential infrastructure projects.
“New councillors haven’t had to deal with this kind of thing,” said Stephan. “But when I hear that this is a standard thing and we see this frequently, to me that’s alarming.”
Stephan said that council approves projects based on cost projections and now council is expecting to approve them at much higher costs.
“When we’re doing our budgeting, it’s important to build in (extra costs) and I know we do that (somewhat),” he said.
Mayor Morris Flewwelling said this doesn’t happen frequently.
“It happens when our original estimates are out of whack with whatever is going on in the community,” he said. “Perhaps the scope of the work has changed. When you think of the many dozens of contracts that are out there, having two of them go awry is not a bad batting average.”
Harris wondered what kind of impact this borrowing would have on future capital projects.
Dean Krejci, acting corporate services director, said that for every $1 taken out in debt limit amounts to $1 that can’t be spent on something else.
If the additional dollars weren’t approved, Curtis said the city would lose millions of dollars in provincial and federal dollars.
Council approved both.
ltester@www.reddeeradvocate.com