Red Deer city council receives report on infrastructure sustainability and asset management

During the regular city council meeting, City of Red Deer Chief Financial Officer Sam Mugford, presented the report to council, which included information on the city’s assets, emerging pressures, the current state of infrastructure, and financial sustainability.

The report comes after city council passed a resolution during budget deliberations last December, directing administration to bring forward a city-wide asset management plan by quarter three of 2026.

The report was to include the current replacement value, age profile, and condition rating for all major asset classes; the estimated deferred maintenance liability and annual lifecycle funding gap; a 10-year risk-based capital renewal forecast; the alignment between asset condition, reserve strategy, and debt capacity; and the financial and service-level risks associated with deferring recommended reinvestment.

Mugford indicated in the report that some of the emerging pressures includes aging infrastructure, rising construction costs, utility renewal requirements, fleet replacement. road rehabilitation, and more.

The city reports that they have approximately $2.26 billion in capital assets, which would include roads, buildings, and vehicles.

The estimated total replacement value is 11.9 billion. Furthermore, the estimated annual funding gap ranges from $4 million to $25 million.

The city indicated they own approximately $371.2 million in land, which was listed as being in good condition, as well as $87.3 million in land improvements in fair condition.

They also reported $261.1 million in total buildings and leasehold improvements listed in barely fair condition and $52.7 million in machinery and equipment in good condition.

However, the city reported that $39.8 million in vehicles were considered at risk condition. This includes vehicles used for transportation purposes such as light, medium, and heavy-duty vehicles, transit buses, fire apparatus and ambulances.

Councillor Jaelene Tweedle said in closing comments that the condition of the vehicles stuck out to her and added that infrastructure was very close to that.

She said that heading into budget, there will be tough decisions to be made.

“Infrastructure ages regardless of budget. There’s tough decisions to be made, and they’ll cost money, and there are costs to not make them. Deferred investment eventually becomes replacement,” she said. “When we talk about fiscal responsibility, it’s not just spending as little as possible, it’s being responsible and planning.”

Councillor Tristin Brisbois said the report provides a good baseline.

She said that s they look at the evolution of this it would be good to move from a qualitative report to a more quantitative space.

“Really hitting on those key metrics because that will help us make those key decisions when it comes around budget time, and it would also be helpful to all to see where we are in danger and what’s coming up in yellow, especially if there’s a big dollar figure attached to it.”

Red Deer Mayor Cindy Jefferies said they often talk about the tax payer but don’t talk about them as shareholders.

“You look at the assets that belong to the city and therefore belong to the citizens and taxpayers. It’s not like your taxes go to nothing. I think we need to remember that what we’ve invested in also needs maintenance, and as a council member who’s been around on and off since 2004, I recognize how good maintenance has saved us money in the long run… You pay now, or you pay later, so if you reduce your maintenance too much, you end up having to do bigger and more repairs.”

by Ian Gustafson

Red Deer city council receives report on infrastructure sustainability and asset management

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