(rdnewsNOW file photo)

By Ashley Lavallee-Koenig

AMENDMENTS MADE

Red Deer city council approves 2025 Capital Budget and 10 Year Capital Plan

Nov 18, 2024 | 9:34 PM

The City of Red Deer unanimously approved a reduced 2025 Capital Budget and the proposed 10 Year Capital Plan on November 18, each of which will see a shift in focus from city advancement to preserving infrastructure through previously deferred maintenance.

The 10 Year Capital Plan was approved in principle at about $148 million per year ($1.47 billion) and is largely based on estimates around future revenue, expenses, inflation, and other predicted factors.

The 2025 Capital Budget consists of about $88.9 million in new project costs; these projects are funded through a combination of the Capital Projects Reserve (tax supported), grants, and debt. Looking forward, there is about $13.1 million available for these projects through the reserve and $20 million to be available through 2025 grants, said Mike Olesen, growth and finance general manager.

“We’re facing a difficult budget, and we’ve had to make hard choices to ensure we’re focusing on what matters most – our core infrastructure,” said Mayor Ken Johnston. “This budget reflects a balanced approach, prioritizing critical maintenance and upgrades to roads, bridges, and facilities that support the day-to-day lives of Red Deerians. We’re committed to meeting our community’s needs responsibly, even in a difficult fiscal environment, to keep our foundation strong for the future.”

These initiatives come in addition to $80 million in projects approved by council in previous years that are carrying over into next year. Funding both these amounts requires an additional $108 million in principally approved debt commitment; however, official approval of debt commitments will happen on a case-by-case basis moving forward — that total does not get executed at the time the budget is approved.

AMENDMENTS MADE

Red Deer city council approves 2025 Capital Budget and 10 Year Capital Plan

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The City is currently servicing $290 million in debt and, if this entire proposed $108 million is used, it will have $30 million in remaining borrowing room based on self-imposed limitations.

Two notable projects making up a large portion of the 2025 Capital Budget are the replacement and enhancement of the City’s fleet vehicles.

General Manager of Community Services Sarah Tittemore explained that fleet size and scope is a result of the service levels determined by council, meaning a reduction from or addition to the fleet will have a similar impact on the services Red Deerians receive, such as snow clearing and waste disposal. She added that many of these units have reached the end of their life cycle and require replacement to maintain service levels.

As a result, administration proposed $17.7 million to replace these units, as well as $10.7 million to enhance the fleet and improve its efficiency.

Councillor Kraymer Barnstable moved to reduce the enhancement proposal to $6.2 million, which eliminated $3.3 million in debt that would have been required to adequately fund it. This passed 6-3 and brought the total of the 2025 Capital Budget to the approved $88.9 million, down from an initially proposed $93.8 million. Cindy Jefferies, Lawrence Lee and Dianne Wyntjes were opposed, citing a trust in administration’s proposal and concern around the deferred cost coming back higher later.

Administration did note throughout the day that the projects put before council had already gone through a thorough vetting process to determine needs versus wants and were significantly reduced compared to the requests received.

Other projects anticipated for 2025 include bus replacements ($1 million), traffic signal infrastructure ($1.5 million), security upgrades to civic facilities ($2 million), rehabilitation and replacement of the City’s numerous bridges ($18.5 million), and many more. Some of these projects have grant funding covering a portion of their cost.

Today’s debate also appeared to reveal components of the capital budget process that councillors felt could use improvement, such as in the transparency and communication around capital projects as they’re developed.

A motion from Barnstable asked administration to prepare an updated Council Capital Budget Policy by Q2 of 2025 to inform the 2026 Budget Debate process. The motion was passed and, specifically, asked that the updated policy includes:

• the treatment, presentation, and approvals required for capital items carried forward from previous fiscal years; and
• a process to review capital projects at regular intervals with respect to cost versus budget, timeliness of projects.

Budget deliberations resume November 19 at 10 a.m. and residents can tune in online.