The capital budget is the portion of a municipal budget dedicated to acquiring or constructing long-lasting assets such as buildings, roads, water infrastructure, vehicles, and major equipment. Unlike the operating budget (which covers day-to-day expenses), capital budgets address one-time investments with benefits lasting many years. Capital budgets are often multi-year, showing planned projects over 5-10 years. Funding comes from various sources including reserves, development charges, grants, and borrowing. Separating capital from operating budgets allows different financing approaches—while operating budgets must balance annually, capital projects may be debt-financed with costs spread over the asset's life.