Cost pressures due to inflation, supply chain issues, and competition priorities are impacting the city’s long term capital project planning.
Council and administration staff met on Tuesday to debate options for the reconstruction of Victoria Ave, which also includes a second phase of the 4th Ave. N to replace failing infrastructure. now that the first phase is close to completion.
Staff presented a number of options for the full Victoria Ave project over the next three years, which included the potential borrowing of just shy of $30 million to pay for it. However, council also wrestled with the optics of making a significant budgetary decision ahead of the upcoming local government elections in October that would be binding to the incoming new council.
Following discussion, council directed staff to continue with the 2023 slate that includes the second phase of 4th St. N project, which will see the reconstruction of a section between 18th Ave. and Kootenay St., as well as the reconstruction of 12th Ave — 2nd St. to 3rd St. S, and the city’s annual paving program
A decision on funding sources for both phases of the Victoria Ave reconstruction project in 2024 and 2025, either through borrowing, reserves or tax increases, was also punted to the future to be made by a new council following the election.
“This project is still on our five-year capital books, what we’re doing today isn’t changing anything, it’s just giving clarity for 2023,” said Chief Administrative Officer Mark Fercho, during discussions. “We still intend it because we simply don’t have the reserves, but there will be some borrowing on our part for Victoria [Ave].
While the immediate need was direction for staff in next year’s capital works project schedule, the discussion also touched on upcoming major infrastructure projects on and the resulting long-term budgetary impact in the five-year financial plan and beyond.
Other major projects on the five-year horizon includes replacing the Gold Creek Dam, a Phillips Reservoir bypass that would source water around the reservoir, the sewer lagoons upgrade currently underway, a UV disinfection facility and water filtration treatment plant.
Addressing aging infrastructure in the downtown core is a longer-term priority, as the entire area will need an estimated $90 million dollars in funding.
Fercho noted city staff is risk managing some of the bigger projects by preparing as much design work as possible in order to be “shovel-ready” when submitting grant applications.
Staff also noted that given the increases in costs, there will be potential impacts to utility rates and taxes next year, however, the fine details will become clearer once a new council is elected in October and budget discussions for 2023 and beyond get underway in November.
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