Money from land sales should not be used to bump up the city's road paving budget, according to Mayor Shari Green.

At Monday night's meeting, Green presented a report to city council suggesting that proceeds from the sale of land in the Highway 16 West corridor should go into reserves for other capital projects.

Currently, that money is slated to fund downtown development projects through a bylaw established in 2004.

"In recent years, a number of other initiatives have proven effective in beginning to change the face of downtown," Green said in her report, adding that having a dedicated funding source is no longer required.

Green acknowledged the funding shortfalls in the yearly road rehabilitation budget, but stressed that picking up the slack from reserves every year is not a sustainable avenue.

"Taking funds from reserves for ongoing capital needs such as road rehab (a multi-million dollar budget is needed every year) without repaying those funds cause the reserves to be depleted," the report reads. "The sustainable approach to funding road rehab would be to increase the road rehab levy."

Earlier this summer, council approved the use of $1.9 million from reserve funds to enhance the road paving budget. This allowed for four additional paving projects to be completed.

The Land Development Reserve that Green is recommending the money be directed to currently has a negative balance, since it owes the city's Endowment Reserve fund.

That endowment reserve is used to finance internal debt and there is no legal requirement to repay it, since it gets filled with interest from the city's general operating fund.