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Operating and capital budgets

​Operating vs. capital – what’s the difference?

Operating budget

  • Used for costs that recur year after year, does not have future value
  • Primarily paid to staff who deliver City services
  • Also covers the costs of delivering services – operation and maintenance of facility, infrastructure, equipment, systems, vehicles, etc.
  • Largely funded by property taxes and user fees
  • Utilities services (clean drinking water, wastewater treatment and disposal) are fully supported by user fees

Capital budget

  • Land acquisitions, construction of buildings and infrastructure – roads, recreation centres, libraries, etc.
  • Procurement of items used for one-time costs, with life expectancy of more than one year – equipment, vehicles, structures, systems, etc.
  • Largely funded through government grants, debt and reserves

In most cases, money cannot be transferred between capital and operating budgets because of funding restrictions.

Who makes budget decisions?

Operating budget

The City develops its business plans and budgets in three year cycles.  In the November prior to the start of a budget cycle, Administration presents to Council the proposed plans and budgets, which is then debated and approved by Council at the end of November.

The approved plan is then carried out by City departments and business units.  Each year, Council votes on adjustments to the business plans and budgets to meet current needs.

Capital budget

The City’s five-year capital plan ensures appropriate planning for required projects and their related funding to demonstrate the complete impact of major, multi-year projects.  Capital budgets are approved by Council as part of the three-year business planning and budgeting cycle.

Thirty-nine per cent of the capital plan is to meet transportation-related needs with other major components being recreation and culture, emergency services and corporate infrastructure and life-cycle maintenance.

Operating budget expenditures

Approximately 75 per cent of The City’s operating budget is allocated to departments and civic partners that provide services directly to the public. The remaining 25 per cent of the operating budget is allocated to departments and expenditures that govern, enable or support service delivery. These include Corporate Services, Corporate Administration (CA), Council, corporate programs and capital financing.

Capital budget expenditures

The City’s capital budget is allocated based on the five year capital investment plan. In addition to new infrastructure builds and acquisitions it includes a mix of maintenance and upgrade projects – acknowledging that needs for new infrastructure must be balanced against The City’s obligations for existing infrastructure in older communities.​​