A budget for projects that invest in assets that are considered capital, such as buildings, equipment and vehicles. This budget includes how the projects will be financed. It is separate from the Operating Budget, which goes towards staffing, supplies, utilities, gas and other expenses involved in day to day operations.

A type of capital project focused on renewing or fixing existing assets (like replacing, repairing, or restoring them).

In the 2025 budget, approximately 40% of the project are State of Good Repair.

A project mainly focused on expanding or adding new assets, often to support growth, but not always.

In the 2025 Capital Budget, 60% of the projects are Expansionary Projects.

The proposed Capital Budget is a total investment of $128.3 Million with strategic use of reserves and debenture (debt).

The budget catches up with $27 million of projects that have been backlogged from prior years, some due to the pandemic.

Of the state-of-good-repair investment: 59% goes to roads and bridges

The capital budget makes significant expansions to roads, bridges, facilities, and fleet to prepare the municipality for growth.

Debt is a tool that municipalities use to finance capital projects with a goal of spreading cost over the assets' useful life. For example, fixing a bridge that will last 30 years, and paying back the cost of it over the 30 years.

That depends. Projects that are done because of City growth, such as expanding a water treatment plant, are eligible for funding from developers, as well as from the future homeowners that will benefit from the water system.

Projects that are for keeping existing City buildings and property, or roads, in good shape, also known as State of Good Repair projects, are paid for by taxpayers.

There are several checks and balances in place to make sure municipal debt is financially responsible:

1. The Municipal Act governs maximum debt principle and interest payments. (known as the Annual Repayment Limit).
2. Council has endorsed a Debt Servicing Ratio of 10% of Gross Revenues. This means our borrowing costs (repayment of principal and interest expense) cannot be more than 10% of our revenues. Revenues includes taxes, grants, user fees and investment income. In 2024, revenues were $253 million, so the City's repayments must be within $25 million in that year.

Kawartha Lakes total debt is $138 million. However, the debt on the general tax levy, which is the part tax payers are responsible for, is $49 million.

The rest of the debt is the responsibility of developers and the users of the Water-Wastewater systems.

• Logie Park
• Bobcaygeon Beach Park
• Affordable housing projects
• Major arena upgrades
• Bridges
• Road projects that extend the useful life

Imagine you are comparing the financing of a $1 million house to the municipality’s option to borrow to fund projects:

Mortgage on $1 Million House

Normally, when taking a mortgage for a $1 million house, you might be able to borrow up to 80% of the home’s value, which is $800,000. This is the typical amount lenders allow for a home loan. How much you earn (your revenue) will determine how much your mortgage can be. Your payments include both principal (the loan amount) and interest.

Municipality

In the case of the municipality, the "home" is its total revenue-generating potential ($272 million in 2025), and the "mortgage" is the amount they can borrow for capital projects. Subject to a maximum, of principal and interest repayment affordability, similar to how a lender sets a limit for homebuyers.

The Debt Servicing Ratio restricts the municipality from spending more than 10% of its revenue on principal and interest payments for debt, ensuring that it doesn't overextend its borrowing.

In both cases, there’s a cap to borrowing based on the capacity to pay back, whether it's a homeowner or a municipality.