A debt limit is the maximum debt that the municipality may undertake in a fiscal year. Debt limits for municipalities are legislated by the province at 1.5 per cent of annual revenue.
Debt servicing is the maximum amount of principal and interest that the municipality may pay on its debt over the fiscal year. This amount is also legislated by the provincial government. It's equivalent to .25 times the Town of Banff’s eligible annual revenue.
Infrastructure deficit occurs when the amount a municipality has in its capital reserves is lower than the anticipated costs of future replacement of its capital assets. The calculations take inflation and projected interest rates on investments into consideration. Based on our current Infrastructure Deficit Analysis, the Town of Banff looks to be on a solid financial course to address its annual shortfall.