2004 News Releases
Water quality a priority in city's Capital Budget
WINNIPEG - November 26, 2004 - Water coming into our homes and cleaner water going back into the river systems are all big- ticket items in the city's preliminary Capital Budget package tabled today by Executive Policy Committee.
The city plans to spend $370 million on its sewage disposal system and $249 million for its water system over the next six years, part of which is to meet provincial mandates.
The Capital Budget totals $1.3 billion over the next six years with $303.5 for 2005.
"This Capital Budget attempts to balance our overwhelming needs within our existing resources," said Mayor Sam Katz. "We're attempting to address our revenue shortfalls through negotiations with the other levels of government. We are anticipating that gas tax revenue from the federal government will flow in 2005 but we do not yet know the amount. Once that becomes clear we will budget for it accordingly."
Some of the areas where significant capital investments will occur over the next six years include:
The capital plan continues to avoid new external debt for tax-supported programs for the next six years, and continues the strategy of financing on a pay-as-you-go basis.
"This Capital Budget is fiscally responsible," said Councillor Bill Clement, Chairperson, Standing Committee on Fiscal Issues. "Our tax supported net debt has been reduced by 38% since 1999 resulting in much lower debt servicing costs."
The 2005 Capital Budget is $303.5 million- a $98 million increase over the 2004 adopted budget. The increase is mainly to provide for sewer and water treatment projects. The increased spending will be primarily financed by sewer and water charges, which will pay for the debt servicing costs related to the $50 million of new debt required. The Water Treatment and Environmental Projects Capital reserves, also funded by sewer and water charges, will be drawn down by an additional $21 million in 2005. New funding from the Canada Strategic Infrastructure Fund in an amount of $23 million will go toward the Kenaston Underpass project. The cash to capital contribution from the City is planned to increase by $4 million to $61 million in 2005.
Major capital projects receiving funding in 2005 include:
There are several quality of life enhancements in the budget as well. Pedestrian and cycle facilities, reforestation, playground replacements and a public art program all receive support.
Though this budget reflects what the city can buy now, negotiations continue with the Federal and Provincial governments to develop strategic partnerships in order to address the infrastructure needs of the city. The six-year plan includes $26 million from the two levels for the Kenaston underpass project. Another priority is the City's community facilities. The budget includes only the City's share and once partner commitments are finalized they will be integrated into the capital plan.
Because of the challenges facing the city to come up with a balanced operating budget for 2005, the administration will review the Capital Budget to identify $15 million in potential holdbacks until it is clear that the operating budget can be balanced. A similar strategy was implemented last year.
"This has been an open and transparent process," said Mayor Katz. "All members of Council have had the opportunity to review the budget prior to tabling and all interested parties will have a chance to express their views."
The timetable for approval of the Capital Budget is as follows:
Council conducts final review and adoption — December 13
Capital Budget Backgrounder
The Capital Budget is a six-year capital investment plan. The first year of the plan is adopted by Council and the five-year forecast is adopted in principle.
The Capital Budget is a tool to authorize new projects. The spending does not necessarily occur in the year that the projects are authorized.
Capital assets are generally defined as those with a cost exceeding $100,000 with a minimum 10-year life. Major equipment or automated systems development projects are also included in the capital budget although their useful life may be less than 10 years. Land acquisition and local improvements are considered capital works regardless of expected cost.
The city also passes an operating budget for both its tax-supported and utility operations. The operating budget must be a balanced budget and, as required by the City of Winnipeg Charter , must be adopted by Council by March 31 in the year that it comes into effect.
There is a link between the capital and operating budgets. Debt and finance charges which show as an expense in the operating budget are the costs of servicing new projects and debt payments on previously approved projects.
There is a maximum $61 million contribution from the tax-supported operating budget to support the Capital budget each year. This $61 million cap, that finances part of the tax-supported capital program each year, is shown as a debt and financing charge in the operating budget.