Town of Banff

Capital Budget

The capital budget covers spending on infrastructure.  Examples of infrastructure include:

• water and sewage treatment
• municipal roads
•  street lighting
•  transit
• solid waste management
• recreational facilities
• public buildings
• front-line emergency services such as police, ambulance and fire.

Funding for capital projects comes from three major sources: capital reserves, grant funding, and loans.

• 2012 Capital Budget ( PDF - 169 kb)

Capital Reserves

The amount required for capital projects can vary greatly one year to the next, depending upon the projects that are scheduled. If taxpayers were taxed on exactly how much was spent each year, property tax bills would vary widely from one year to the next. To provide a more stable approach to taxation, reserves are used.

This is how the capital reserves work:  Each year, some of the revenue collected is set aside in order to “save up” enough to fund capital projects. The funds placed in the reserve are then invested until they are needed.

• 2012 Capital Reserves ( PDF - 107 kb)

Grant Funding

Over the past 15 years, federal and provincial governments have off-loaded responsibilities to municipal governments and cut transfer payments. To help lighten the financial load on municipalities, these levels of government offer grant funding to municipalities for capital projects. 

One of the largest grant programs to date is the Municipal Sustainability Initiative (MSI).  The Town of Banff originally expected receive approximately $37.4M in MSI funding over a 10 year period. Recently, however, the province announced that the program will be cut by 25%. Since our five-year capital budget was based on the original funding, in May 2009 several changes were made to the capital budget to accommodate the lower amount of money coming in.

• Read the report about capital budget changes ( PDF - 146 kb)

Loans

For many years the Town of Banff prepared budgets based on the philosophy of no tax-supported debt.  Over the past few years, a growing deficit in our reserves, increasing construction costs and low borrowing rates have caused Council to review this strategy.

Whenever a municipality is considering a loan, Council needs to pass a bylaw.  The loan needs to be for a specific project, and the borrowing bylaw must be passed before the project begins. The Town is not obligated to borrow the full amount authorized by the bylaw, or borrow at all if other revenue becomes available.