The Town of Hay River has prepared a draft capital budget for 2021 which would see a spending increase from this year.
The proposed capital spending next year would total $18.1 million, compared to $13.4 million budgeted for 2020.
However, Sam Mugford, the town’s director of finance, told the Nov. 9 online meeting of council that the proposed spending for 2021 would include a $7.4-million carryover from projects this year, partially because of some delays due to Covid-19 restrictions.
“For a variety of reasons, the work was not completed,” Mugford said. “A large portion of that, roughly $5.5 million, was related to the lift station.”
Another reason for the proposed spending increase for 2021 is the availability of funding under favourable arrangements.
Mugford noted that $15.6 million of the proposed spending would be funded externally and $2.5 million funded internally.
The bulk of the internal funding would be $1.5 million from reserve funds, even though the town expects to add $1 million to reserves in 2020.
“In the long term that’s not sustainable,” said Mugford. “It’s being done at this point because we were able – through (the Investment Canada Infrastructure Program) – to get 75 cents on the dollar for capital replacement. And when those funding opportunities come along, it’s important to strike when the iron is hot.”
The ICIP funding would amount to just under $7 million, and there would be additional funding from the federal and territorial governments, CanNor and other sources.
Mugford said the breakdown of proposed spending in 2021 would be about $2.7 million for new assets and $15.4 million for replacement of existing assets.
The bulk of the spending on new assets would relate to the proposed Fraser Place development for residential land.
Overall, Mugford said the lion’s share of the capital spending – about 90 per cent – would fall under public works.
“For a municipality, that is fairly standard and that’s comparable with previous years,” he said.
By department, the proposed spending for 2021 would see $16.2 million go to transportation and public works, $1 million to recreation, $740,000 to administration, $120,000 to protective services and $39,500 to tourism and economic development.
“The purpose of bringing this before you now is to stoke a discussion and allow for additional time for public input,” said Mugford.
A public consultation was held on Nov. 12 at the Hay River Community Centre, but only representatives of town administration and council showed up, along with the reporter from The Hub.
During the Nov. 9 council meeting, Glenn Smith, the town’s senior administrative officer, said the draft capital budget supports the necessary replacement of core municipal infrastructure and associated assets, and also leverages a lot of favourable contribution funding.
“But it does speak towards some new identified growth that council has had an interest in, specifically around housing development,” he said, noting that approval of the final capital plan will take place in mid-December.
Mugford noted there are some projects listed in the proposed capital budget that will see the bulk of spending beyond 2021, such as a new town hall, the Sundog subdivision development, a possible new water treatment plant and Capital Drive roadwork.
“In 2021, these projects are just in their preliminary and design stages,” he said.
The major capital projects in 2021 would be completion of the roadwork on Caribou Crescent and commencement on Riverview Drive and Beaver Crescent, finishing the work on a new lift station which started this year, and development of Fraser Place with work concluding in 2022.
Town administration is still working on an operations and maintenance budget for 2021.