Hay River presented its draft of its capital budget for 2021 to town councillors on Monday, with a big increase in spending for public works.
The proposed capital budget for 2021 is $18.1 million, nearly a $5 million increase from last year.
Most of that increase is made up by the $4.7 million increase in the budget of public works.
“The budget itself heavily supports the necessary replacement of our core municipal infrastructure,” said Glenn Smith, senior administrative officer for Hay River.
The increase in spending is covered partly by $7.4 million carried over from previous years. Hay River is projecting to have more than $3 million in their financial reserves, that will help fund the increase in spending — around $1.5 million is coming from the reserves in the 2021 draft budget.
“We’re taking more out of our reserves next year than we anticipate that we’ll be putting in, in the current year,” said Sam Mugford, Hay River’s Director of Finance & Administration. “So in the long term, that’s not sustainable.”
The town council is taking more out of the reserve this year because the Investment Canada Infrastructure Program gives funding proportionally based on what the town is spending themselves, said Mugford.
“When those funding opportunities come along, it’s important to strike when the iron is hot,” said Mugford.
The bulk of the remaining funding to cover the increased spending compared to 2019-20 comes from federal sources, like the Investment Canada Infrastructure Program, totalling just under $7 million.
The capital budget also includes money for areas the council had identified as areas in need of growth, like housing developments, added Smith.
The Fraser Place development is a large chunk of the money that’s going towards new capital projects, around $2.7 million.
The subdivision development is part of the town’s efforts to prepare for a large population boom that could bring the population up to 6,000, according to estimates from Hay River’s 2019 community plan.
The construction of the Fraser Place development will “assist in facilitating growth of the tax base,” added Smith. The town has also begun pre-selling lots from the Fraser Place development
Most of the money, more than $15 million, is going toward replacing existing infrastructure. Projects like upgrading the system’s lift station will be starting shortly and should be completed by the end of 2021.
Other projects, like replacing the water treatment plant — which the Department of Municipal and Community Affairs said Hay River should start working on within five years — the new town hall and the capital drive road works are in their “preliminary and design stages.”
Most of the costs associated with these projects will come in future years, according to Mugford.
The draft budget will be made open to public feedback on Thursday, held at town hall at 6:30 p.m.
The final budget will be approved and passed mid-December.