Preparing Sylvan Lake’s next budget is going to be “real interesting” as the town wrestles with the need to provide infrastructure and facilities for a growing community.
A plan for capital spending over the next ten years shows just over $108 million will be needed for a variety of street, water and wastewater projects, a new fire hall, multiplex, community recreation hub, and additions and replacements for the town’s fleet of vehicles.
To accomplish all that’s proposed, the report presented by Darren Moore, director of finance, to council July 8 suggested $23.3 million would need to be borrowed.
Councillor Ken MacVicar noted that borrowing costs are cheap right now but may be different in a couple of years. “It’s going to be real interesting budgeting in 2014,” he said.
Subsequent councils will have the opportunity to review and change the plan. “It’s a plan not a budget,” said Chief Administrative Officer Betty Osmond.
Each of the projects in the plan includes a breakdown of where money would come from to fund them — operating funds (current year taxes), reserves, grants or other sources.
The plan proposes borrowing $3.3 million this year for construction of the fire hall. Then another $10 million would be borrowed in 2014 for a multiplex planned to replace the current arena.
Other big projects next year include $4.5 million for 50th Street work from Lakeshore Drive to 48th Avenue including the 50th Avenue realignment, $1.6 million for Lakeshore Drive from 50th Street to Harbourtown, $650,000 for parking, $1.3 million for an aerial fire truck, $2.5 million for a trunk main upgrade and $1.5 million for the curling rink redevelopment.
New to his calculations, said Moore, is the addition of borrowing for transportation capital projects. “In the last version we didn’t factor in debt financing for transportation services. To make it work we’re suggesting debt financing,” he said. “We’re hopeful as the years get closer we can eliminate some of the need for debt.”
The transportation services area was the one which changed most from the previous plan a year ago. “Public Works submitted additional projects, changed the timing of major changes to deal with major improvements in the cottage area and West Village (west of 50th Street and north of the railway). They couldn’t be pushed off to 2020, ’21 or ’22.” The planned start for those projects is now 2015.
The cottage area modernization is a multi-year project pegged at $7.7 million spread out between 2015 and 2020. The West Village project is estimated at $3 million over three years beginning in 2015.
The town may borrow up to a certain debt limit which is based on 1.5 times its revenue, according to a provincial government regulation.
Projections show the town’s debt moving from 34 per cent of the total limit in 2013 to 63 per cent next year, then dropping to 60 per cent in 2015, 58 per cent in 2016 and 2017 and jumping again to 67 per cent in 2018.
Moore admitted his debt limit calculations are conservative.
He’d only increased total tax revenue by two per cent each year to create the numbers. However growth could increase tax revenue significantly.
“What does it do to property taxes?” asked Mayor Susan Samson.
“You’re going to see a period of a couple of years where debt servicing costs are going to increase substantially,” explained Moore.
The town may borrow for a term of five years or less without advertising to ratepayers. If the term is greater than five years it must be advertised and a bylaw passed.
Osmond added, the plan is one option. “We can look at other options.”
“When we look at projects, growth, these have to be done,” said Samson.
MacVicar concurred. “You have to look after infrastructure, it’s a matter of catching up.”
Councillor Dale Plante suggested the town work to attract a bigger tax base from industrial growth.
The report was unanimously accepted by councillors for information.