CFO looks to ‘stay the course’ on capital budget

Maintaining spending seen as protecting jobs

The City of Edmonton is proposing to largely stay the course on its capital budget even as it is facing a sharp decline in revenue due to the COVID-19 pandemic.

The spring 2020 supplemental capital budget adjustment, which is slated to be brought before city council on Monday, recommends a series of changes that would result in a net decrease to the 2019-2022 capital budgets of only $1 million.

The capital budget for 2020 alone is $2.8 billion.

The city’s chief financial officer Mary Persson said the plan is designed to “stay the course” in part as a way to try to preserve future jobs that come with capital projects.

“We have had touch-points with council throughout about keeping the capital budget as whole as we can to keep the jobs and the funding in Edmonton and to be aligned with what the province is doing with respect to their stimulus funding,” Persson said.

The city estimates that the overall four-year capital plan will create 66,600 jobs in industries like construction.

The budget adjustment comes as Mayor Don Iveson continues to sound the alarm over the city’s financial hardships because of the COVID -19 pandemic.

The mayor has previously said he wants to maintain the capital budget plan.

In April, the city’s approved operating budget adjustments found savings of $137.2 million to offset the expected net impact of the COVID -19 pandemic through mid-september.

Approximately 2,500 city employees have been temporarily laid off since the start of the pandemic.

Iveson said Thursday that without help from other levels of government, the city may have to make cuts to essential services or infrastructure spending.

Meanwhile, there are a few urgent items that council is being asked to add to this year’s capital budget. Administration is proposing spending $2.2 million on new IT network switches.

There are 149 network switches around the city that are more than 12 years old, despite the fact that it’s considered best practice to replace them every four to five years, according to the documents being presented to council.

The switches, located throughout the city, allow information to flow back and forth on the City of Edmonton’s internal network.

“We would not have put it forward had we thought we could wait a bit,” Persson said.

Another new item is $1.3 million to be spent in 2020 on new extrication equipment for the fire department.

“The contract for replacing it is expired so they do not have the ability to replace their current equipment that is passed its end of life,” she said.

Among the largest items being removed from the overall 2019-2022 capital budget is $43.9 million in cash related to drainage assets that are being transferred to Epcor as part of a plan that was approved in 2017.

City council will get a chance to discuss the specific items in the budget at Monday’s meeting.