Oakville drops a $12-million plan to bury hydro lines on Khalsa Gate in its mid-year financial report

What Council received

At its September 28 meeting, Oakville Council received the Finance Department's June 30, 2026 Financial Results report, which covers the Town's operating budget, capital program, reserves, investments and purchasing for the first half of the year. Council approved closing 23 capital projects and endorsed one capital change: discontinuing the underground hydro conversion planned as part of the Khalsa Gate urbanization project in Palermo Village.

A surplus that depends on reserves

Staff project that the Town will finish 2026 with a favourable variance of $1.56 million, or 0.5% of the tax levy — but only after policy-related transfers from reserves. Before those transfers, the projection is $3.75 million unfavourable. The largest transfers are $2.80 million from the Storm Event Reserve to cover extra winter control costs and $2.34 million from the Building Enterprise Reserve, which by law absorbs shortfalls in building permit revenue.

The projected surplus also includes $3.53 million in higher-than-budgeted investment income. The report notes that for the past three years surplus investment income has been moved into the Capital Reserve because of the size of the capital program; if that happens again at year end, the overall projection becomes $1.97 million, or 0.7%, unfavourable.

Overtime, diesel and snow

The fire department's overrun is mainly personnel: overtime, the early hiring of new recruits to reduce overtime, and stand-in pay to cover sick leave. The report says Oakville Fire, Finance and Human Resources are reviewing the root causes and how to address them. Diesel is the other pressure. The Town budgeted $1.21 a litre; its July average was $1.69 for operations and $1.71 for transit. Staff assumed prices stay near the year-to-date average, an impact of $0.65 million that Town policy funds from the Tax Stabilization Reserve.

Staffing elsewhere ran under budget. The Town had 72 vacancies at the end of the second quarter, an average vacancy rate of 5.5%, down from 5.75% in the first quarter. The report also flags economic risk: total inflation reached 3% in July, driven mainly by energy prices, and staff warn capital budgets could come under pressure if those headwinds persist.

Khalsa Gate's hydro lines stay overhead

The Khalsa Gate and Old Bronte Road project will rebuild about 885 metres of rural road in Palermo Village, from Dundas Street West to the end of the Khalsa Gate cul-de-sac, with curbs, sidewalks, cycling facilities, storm sewers, lighting and street trees. It has a life-to-date approved budget of $15.9 million, $7.9 million of it from the Building Faster Fund, with another $7.3 million requested in the 2027 forecast.

After a technical review, staff concluded that burying the hydro infrastructure would add about $12.0 million and bring corridor constraints, property and utility coordination problems and a high likelihood of delaying the project past the Building Faster Fund deadline of March 31, 2028. The report describes the conversion as discretionary and primarily aesthetic. With Council's endorsement, $4.7 million returns to the Capital Reserve from the current budget and $7.3 million comes out of the 2027 forecast; the road work proceeds with minimal overhead hydro relocations. The Town's project page anticipates tendering and construction in 2027, with substantial completion targeted by March 31, 2028.

Elsewhere in the capital program

• Active capital projects have a cumulative approved budget of $1,257.6 million; spending and commitments so far in 2026 total $230.1 million.
• The 23 closed projects returned a net $1.2 million to reserves and reserve funds.
• The St. Jude's Cemetery culvert replacement produced $6 million in savings, and the Bronte Village streetscape and one-way conversion of Lakeshore Road and Bronte Road $2.3 million; both amounts go back to reserves.
• A $302,100 project to develop Green Development Standards was closed without completing its scope; staff say further work is on hold until the Town's Climate Action Roadmap is completed in 2027.
• The Town earned $17.9 million in gross investment revenue in the first half on a $1.14-billion portfolio, an annualized 3.37% return.