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City to Invest More Than $2.3 Billion in Infrastructure

October 26, 2011

The proposed Capital Budget released today recommends investing $2.3 billion in building and maintaining Edmonton’s infrastructure in the three years 2012 to 2014.

“This proposed budget continues a significant level of investment in projects that provide direct benefits to Edmontonians,” said Lorna Rosen, Chief Financial Officer.

“The ability to build and properly maintain infrastructure assets is essential to ensure Edmonton can provide services and remain an attractive and cost-effective place to live and do business.”

The proposed Capital Budget includes funding for new infrastructure such as building the LRT line to NAIT, a new fire station, new community recreation centres, new park construction, two new libraries, the SmartBus program, a new park-and-ride lot, new commercial land development, and a new highway interchange at the QE2 and Township Road 512 (also called 41 Ave Beaumont).

Renewal investments include replacing the Walterdale Bridge, work at the Mill Woods Senior Centre, the Valley Zoo, four library locations, bus replacements, Edmonton Police Service IT systems, and street and sidewalk renewal work in about 20 older neighbourhoods each year of the three-year plan.

Projects proposed in the budget are funded by a combination of grants, the City’s investment income, developer fees, debt financing, and a dedicated tax to fund the Neighbourhood Renewal program.

In addition to the proposed $2.3 billion for the 2012-2014 capital budget, $98 million is requested to continue renewal projects that will extend into 2015.

“The best possible balance between growth and renewal should ensure that investments in infrastructure assets maximize benefits, reduce risk, and provide satisfactory levels of service to the public,” said Rosen. “Our proposed budget for the next three years goes a long way toward achieving that goal.”

The proposed 2012-14 Capital Budget was released today. City Council postponed the presentation on the budget to the November 9 Council meeting, before the presentation of the proposed 2012 Operating Budget. Council will then ask questions and after a November 23 public hearing, Council will discuss projects and funding methods before setting a final budget likely by mid-December.

Background

The City plans a three-year budget because capital projects require a longer planning and funding cycle than day-to-day operations.

The 2012-14 Capital Budget is divided roughly 50/50 between growth projects and renewal projects.

Renewal projects maintain tax-supported assets with a total replacement value of $20.5 billion. Risk exposure and physical condition are assessed to prioritize what work needs to be done each three-year cycle and establish renewal targets for budget.

Growth projects are prioritized according to their contribution to Council priorities, public health and safety, legal obligations, and contribution to the City’s strategic outcomes, partnerships and civic revenue streams. Projects were first rated by individual departments and authorities, and then subjected to a peer review process.

Faced with the pressures that come from being a national hub of economic strength and population growth, as well as maintaining an ageing infrastructure base (some of it a century old), Edmonton continually seeks ways to fund its capital growth and renewal needs appropriately. A strategic plan called The Way We Finance, due for completion next year, will address some of these challenges and opportunities.