The capital budget indicates the funds needed for a specific year of the 10-year capital planning period. It is how we pay for major projects such as reconstructing streets; building and improving public facilities such as recreation facilities, community centres, parks and fire halls; dealing with growth pressures such as new streets; and new initiatives. These costs are similar to adding an addition to your home this year.

Most of The City’s capital expenditures are planned on a long-term basis to make them more manageable. The estimates that are included in the 2023 – 2030 capital plan are placeholder values for the funding that is expected to be required in each of the years. Longer-term planning allows The City to tailor projects to the changing needs of the community and to better manage finances. Our capital forecast is similar to your plan to purchase a new vehicle in two years or start home renovations in three years.

City Council approved the following capital budgets:

• 2021 Capital Budget: $218.7 million
• 2022 Capital Budget: $103.497 million (total with additional items approved in 2021)

There are five categories of funding for the capital budgets, however, the main source of funding is from grants in 2021 and reserves in 2022.

• Debt: this is split into tax supported debt and other debt, however both contribute towards The City’s debt limit. The amount of debt a municipality can incur is set by the Government of Alberta at 1.5 times annual revenue. Based on this formula, the debt limit for The City is $541.1 million as of December 31, 2019 and is projected to drop to $534.2 million in 2020 due to reduced revenues as a result of COVID-19. The City has also set a policy to limit The City’s debt to 75 per cent of the provincial debt limit.
• Operating: Some capital expenditures are funded with transfers from department operating budgets.
• Grants: The City receives grants from both the Provincial and Federal Governments annually. The Municipal Sustainability Initiative (MSI) grant from the Provincial Government is the main grant used to fund capital budgets. Another significant grant is the Gas Tax Fund (GTF) from the Federal Government. At this point in time, both of these grants and/or a replacement program are expected to be received for the next 10 years.
• Reserves: The main source of capital funding for tax supported operations is the Capital Projects Reserves. This reserve is generally used to fund projects less than $1 million, non-eligible expenses for grant funded projects and operating grants funded by capital.
• Developer/customer contribution: Some capital expenditures are initiated by developers and customers, such as EL&P customer servicing, annual development servicing and development agreement sign and paving markings. These projects are funded through payments by the developers and customers which includes proceeds from land sales.