Municipalities taking cautious approach to provincial budget

Central Alberta municipalities have had more time to digest the province’s latest spending plans but questions remain.

Central Alberta municipalities have had more time to digest the province’s latest spending plans but questions remain.

Most communities were relieved that the province agreed to pump $400 million in additional cash into the Municipal Sustainability Initiative (MSI), a decade-old program has provided billions to communities to address infrastructure deficits.

Red Deer County received a $2.7-million supplementary payment in March, ahead of the provincial budget, to boost its MSI take this year to $6.6 million.

However, there has been no official word yet from the province on whether municipalities can expect that higher contribution to be sustained, although a five-year capital plan calls for big increases as future “targets.”

If the increases don’t materialize, Red Deer County and all of the province’s other municipalities will have to review their budgets.

Red Deer County corporate services director Heather Gray said the county typically takes a cautious approach to slotting in provincial funding until there is a firm announcement from the government.

Previously, the county used MSI grants to maintain its large network of roads.

Lacombe County corporate services manager Tim Timmons said they will get $3.6 million in MSI capital funding this year, including $1.6 million in supplementary funding.

Timmons said on Thursday they are not counting on that extra cash next year and assume their MSI will be about $2 million.

Should MSI funding remain at lower levels, it will eventually have an impact on the county’s road paving and bridge projects.

Rural municipalities have been lobbying the province for years to restore funding to a bridge replacement program but that remains unfunded and Lacombe County has been dipping into its MSI funding to do that work.

Fixing or replacing bridges is a major portion of the infrastructure in most rural municipalities, where a majority of bridges were built in the 1940s through 1960s.

Lacombe County has a $131-million bridge replacement program for its 161 bridges and culverts.

In Red Deer County, bridge replacement and repair amounts to a $65-million infrastructure deficit.

The City of Lacombe is also waiting to hear whether it will be affected by the province’s plan to slash a Regional Collaboration Grant program to $19.2 million from $48.8 million. Lacombe and Lacombe County have applied for $300,000 to create an Intermunicipal Development Plan, a joint planning document that ensures neighbouring municipalities are on the same page when it comes to future growth.

Lacombe chief administrative officer Norma MacQuarrie said their application is already in and there has been no word yet on its progress.

“The funding is affected in the budget, so what that means for us I’m not sure.”

Another program whittled down by provincial number crunchers is the Water for Life Strategy, which has been used by municipalities to bankroll major initiatives such as the Olds-to-Red Deer regional wastewater line that is nearing completion.

Lacombe, Blackfalds and Lacombe County have stepped up efforts to line up funding for a Red Deer-to-Lacombe leg, a project expected to cost in the $40-million range, 90 per cent of which would be paid by the province.

However, Water for Life is only funded to $30 million in the last budget, down from its peak of $100 million in 2009.

MacQuarrie said they’re still hopeful that the province will pump more money into the program as the fiscal situation improves.

There is some room for optimism. The province’s five-year plan shows the fund rising again to $86 million, and up to $135 million by 2018.

On the MSI front, Lacombe is in line for $2.24 million this year, a number bolstered by $1 million in supplementary funding.

Additional costs to communities were spotted in a smaller budget line item. The province will stop paying municipalities property taxes on provincially owned social housing. That means a $72,000 hit to Lacombe.

Other grants will rise, in step with increased populations, such as transportation and policing allotments and a Federal Gas Tax Fund.

Municipalities could also see their fine revenues increase, thanks to sharp increases in those penalties.

Whether MSI funding increases is likely to depend on the province hitting targets outlined in its five-year capital plan. It calls for this year’s $497 million in MSI funding to increase to $846 million in 2016-17 and staying at that level for the following two years.

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