The budget for 2013 capital projects is almost three million dollars, but $2.254 million of that is ear marked for the multi-use arena expansion project and is made up of grant money, while $661,900 remains for other projects.
Capital projects are the one-time or long term expenditures that the village has to pay for in the following year. Operating under the self-imposed constraint of a balanced budget is an exercise in compromise and strategic planning.
The two largest expenditures will be for public works and the completion of Phase I of the downtown revitalization project. Rick Martin, Director of Public Works, explained that the village needed to upgrade some current equipment and purchase new equipment, like a backhoe, upgrades to the grader, and a bobcat snowblower, totalling $152,000.
Downtown revitalization waits for Shell to clean up
The completion of Phase I of the downtown revitalization will require $280,000 in 2013. Phase one is 50 per cent complete already and will be finished by the end of June, Martin reported. Phase II of the revitalization cannot be completed until remediation of the brownfield site is complete.
Councillor Varga would like to see the revitalization project wrapped up during the current sitting of village council. “I think it’s important that we complete as council what we started,” Varga said. “I get the sense that if we don’t finish the project by 2014, a different council will come in and it may not happened.”
The completion of the downtown revitalization project in 2013 depends on Shell Canada completing the remediation of its property in time for the village to complete its work on schedule. Martin warned that, “Shell isn’t necessarily on board with that.”
“We’re ready to proceed,” said Martin. “But we can’t make demands on what they do with their own property.”
An unbudgeted expense may send a chill through the users of the ice arena. Charlie Bowerbank, arena foreman, informed council that the arena chiller has already eaten up 13 of its 12 to 15 year life expectancy.
The chiller is responsible for keeping the arena ice cool and if it were to fail during the season it would take ‘at least a month’ to take delivery a new one and install it. The arena would be shut down during this time.
Generally, it’s advisable to replace the chiller before it starts to leak. “You don’t want a leak in the chiller,” Bowerbank said. “If you have a leak in the chiller ammonia will get into the compressor and then you’re not just fixing the chiller you’re fixing the whole system.”
A new 50 year chiller would cost $140,000 installed. Councillor Illes was concerned that the village didn’t have a plan in place for replacing the unit and he pressed council to consider putting it into a budget plan by 2015. Councillors Beach and Varga agreed that a ‘if it isn’t broke, don’t fix it approach’ was better.
Beach said that there were a lot of hidden infrastructure and maintenance issues that needed looking after, not just the arena’s chiller. Carla Fox, Deputy Director of Finance, suggested that the chiller could be eventually replaced out of capital reserves in a couple of year.
Balanced budget constrains spending and saving
Fox reminded council that her work on the 2013 capital budget was done in the context of a balanced budget and she asked if that was still the intent of the council. Councillor Illes suggested that increased expenditures or capital reserves could still be accommodated in a balanced budget through tax increases.
“Every extra $10,000 in budget spending means a one per cent tax increase,” said Fox, so a $150,000 or $200,000 budget increase could easily lead to a 20 per cent tax increase. No one suggested that an increase to taxes should be considered.
Mayor Luke Strimbold said that instead of increasing taxes, council would find a way to increase capital reserves through, “tough decisions regarding operational costs.”