OLDS — Town council has given initial approval to a $3.4 million capital budget, which is down nearly $4 million from last year.
During a special council budgetary meeting Nov. 15, chief administrative officer Brent Williams said the big difference is that this year’s capital budget does not contain big ticket items like revamping of the Aquatic Centre, which began this summer.
It was pointed out that $925,000 of this year’s capital budget covers items being previously approved, such as a hydro vac and ice resurfacer.
New projects and purchases planned for 2024 total $2,526,000.
Williams told council that provincial funding is going to be a challenge.
A discussion paper included in council’s agenda package noted that during the last 10 years, the town has received an average of $1.99 million in provincial Municipal Sustainability Initiative (MSI) funding a year. In 2023, that figure was just over $1 million, a reduction of 46 per cent.
There’s concern that funding could remain a challenge for the town.
This year MSI is being replaced by the Local Government Fiscal Framework (LGFF).
“While the LGFF funding proposed in the 2024 provincial budget is an increase over the MSI funding received in the 2023, it is beginning at a 33 per cent reduction from the average MSI funding municipalities have received over the last 12 years,” the discussion paper said.
“To date, no information has been released on exact allocation amounts.
Meanwhile, the paper said, “the costs of underground and surface improvements have increased by 30 per cent in just the last two years.”
In response, 11 items suggested by various departments totalling $1.1 million were cut from the capital budget or postponed, ranging in cost from $435,000 to replace the RCMP building roof to $13,000 for kitchen improvements at the Rotary Athletic Park.
The main focus of this year's capital budget is an ongoing strategy to deal with one of the most expensive issues confronting the town – water loss, known as I & I (inflow and infiltration). That loss is expected hit the $2 million mark this year.
In 2024, $1.5 million is earmarked to battle the problem.
Another focus is replacing equipment with more efficient equipment, especially in the parks department.
Meanwhile, the municipality is also contending with the same issue residents are: inflation. Another source of financial pressure is the debt incurred, largely on behalf of O-NET.
"We don't see significant servicing reductions on our own side until 2027,” Williams said.
Another hit to the town’s revenue occurred earlier this fall when SNDL, a major taxpayer, announced it is closing its marijuana production plant in Olds.
During discussion, Coun. James Cummings wondered if the town is perhaps not throwing enough money at the I & I problem.
“Is that a limit on what we believe we can actually do in a year? Or is it more of a ‘I don’t want to shock council with a bigger dollar amount that we could use,’” he asked.
Williams said “it’s not so much the shock value.” That figure, $1.5 million, is indeed the estimated cost for the work.
However, he said there’s concern about what the cost might be for water loss solutions to be brought forward in a report on the vapour testing undertaken in mid to late September this year.
In that procedure, vapour, which the town said was safe and non-toxic, was released into the sewer system and its escape points monitored.
“I’m assuming those repairs will be higher than what we have budgeted currently. But I want to bring council as accurate information as possible, including an action plan, prior to them voting on spending the money,” Williams wrote in an email to the Albertan.
Coun. Heather Ryan echoed Cummings’ point, adding she would like to see the capital budget for that work extended to 2025 and ‘26 so council has an idea of the costs the town might be facing to solve that problem.
Councillor Dan Daley said he was OK with the current budget to tackle I & I, adding that once this year’s work is completed, the town will likely have a better idea of what costs solve the problem might be further down the road.
Coun. Darren Wilson echoed that point.
“This will move us in the right direction,” he said. “I’ll also throw a cliche on the table. The best way to eat an elephant is one bite at a time, and I'm fine with this amount and leaving it with administration to take us forward.”
Coun. Wanda Blatz said the I & I issue underlines the need for the town to undertake a serious asset management examination.
“This will help us to prepare for the future and any future capital asks that we will need and I think that needs to be one of our focuses and our priorities,” she said.
Coun. Harvey Walsh said he too was happy with the amount set aside for I & I work in 2024.
However, Walsh, who sat on council for several years before coming back on council in 2021, said discussions about the problem have been going on for years “and will not go away.”
“I think that the discussion council needs to really start talking about is the water loss we're happy with. Thirty per cent? 20 per cent? Five per cent? The lower the percentage, the higher the cost is,” he said.
After hearing all that discussion, Cummings said he’s satisfied with the amount of money set aside in the capital budget to tackle I & I.
He expressed hope there might be money in the upcoming operational budget to deal with I & I from a maintenance point of view.
