Monthly Archives: March 2012

Capital Budget for 2012

There has been some misunderstanding by some citizens and taxpayers in our community about the affect the 2012 City of Lacombe Capital budget will have on property taxes. In December 2012, the city council adopted the budget to the tune of nearly 26 million dollars. The large majority of this expenditure is for the new upgrades that are slated for the north section of Highway 2A. The funding formulas are available on the city website for all to review but to provide you with a bit of a condensed version, it is as follows.

The city operations budget (the one used for all the daily workings of the city) has in it a number of reserve allowances that are used every year for collection of some monies that are allotted to the various capital projects. It is prudent for the city to collect some of its capital monies this way so that we as citizens are not faced with large sums of monies needed due to poor planning for future expenditures. The reserve funding does not change substantially from each year and that is positive. For 2012 the reserve funding of capital expenditures is around 12% of the total. This means those monies are already in place. A large portion of the funding is from the provincial government from it’s various programs and grants. This is approximately 86% of the total funds required for the capital program for 2012. The remaining 2% is from various sources typically unrelated to affects on property taxes. The initial amount of the capital program was to be just under $26,000,000. With council’s decision in January to scrap the REDHI program portion of the capital budget it will bring this budget down to right around $21,600,000. The REDHI portion was to come from debentures (borrowing) and from capital reserves.

Based on the funding listed above the capital budget for 2012 for the City of Lacombe will not have a direct affect on the property taxes beyond that already proposed in the operations budget. If it were not for the provincial and federal governments, majority of the capital projects would not be able to proceed.

Let me know if this makes sense or if further clarification is required.