A Moment with the Mayor: How Municipal Services and Equipment Are Funded

One of the most common questions I receive relates to the taxes, grants, and fees paid by residents and service users. A review of the City budget begins with understanding the two primary components: the Operating Budget and the Capital Budget.

The Operating Budget supports the day-to-day services the City provides. This includes water and sewer operations, police and fire services, culture and recreation programming, and routine maintenance across the community. It is the portion of the budget that keeps facilities open and safe, ensures lifeguards are on duty, arenas are operating and ice is maintained, grass is cut and roads are serviced, among many other essential functions. Operating costs are funded through a combination of property taxes, utility and user fees, limited sponsorship dollars, and a small portion of government grants.

The Capital Budget, by contrast, focuses on new construction and major rehabilitation projects. This includes underground water, sewer and stormwater infrastructure, water and wastewater treatment systems, municipal and recreation buildings, and other long-term assets. Capital planning is addressed annually and ranges from targeted repairs and upgrades to full replacement of infrastructure.

Historically, major capital projects were often delayed until sufficient reserves were accumulated to avoid incurring debt. Over the past decade, this approach has presented challenges as material and labour costs have risen significantly. Much of the underground infrastructure installed in the 1950s and 1960s has reached the end of its service life and replacing cast iron pipes with modern plastic and PVC materials, along with reconstructing roads and sidewalks, has become substantially more expensive.

Facilities such as the Archie Miller Arena illustrate this evolution. When originally constructed in the early 1960s, the arena represented a significant improvement over outdoor natural ice rinks. Today, community expectations and building standards have changed, and modern arenas require considerably higher capital investment and ongoing maintenance. To address these pressures, the City relies on a blend of grant funding, municipal reserves, sponsorships, and long-term debt financing. Fleet vehicles and specialized equipment are also included in the Capital Budget, with annual evaluations determining whether assets are repaired or replaced to maintain reliable service delivery.

Budgeting and financial planning play a critical role in municipal operations. The City’s finance team works closely with internal departments and stakeholders to plan responsibly for current needs while preparing for future infrastructure and service demands.

Mayor Gerald S. Aalbers
City of Lloydminster