Alberta’s government has tapped into the provincial piggy bank’s infrastructure monies for municipalities, and some of that funding has already been transferred to Sundre.
“I can confirm that we did receive the $432,000 in funds for the Main Ave Phase 2 project,” Chris Albert, the town’s director of corporate services, said last week.
The provincial ministry of municipal affairs issued municipalities a letter last month announcing the government planned to release $597 million of Municipal Sustainability Initiative (MSI) funds for 2019-2020 to municipalities for infrastructure improvements.
The letter the municipality received from the ministry highlighted the fact that the monies are interim funding, and Albert said the provincial government will likely announce plans to provide more after the budget is tabled later this fall. The interim allocations, he said, are to enable municipalities to start planning and working on capital projects.
The letter also said essential federal monies for infrastructure improvements under the Federal Gas Tax Fund program in the amount of about $473 million will also be released once those funds have been handed over by the federal government to the provinces.
“That seems to be what they’re releasing for now,” said Albert, adding Sundre’s interim 2019 allocation for the gas tax fund was a little more than $308,000, and that a further nearly $35,000 in municipal sustainability funding is expected for operating expenses.
To provide some perspective, Albert said that in previous years, Sundre’s capital allocation for municipal sustainability funding had been in the ballpark of $600,000 to $700,000.
Last year, he elaborated, the former government reallocated funding from future years into the 2017 reporting year. Sundre ended up receiving an additional one-time allocation of $421,901, but the total future amounts estimated to be allocated in 2019 and 2020 would be reduced in total by that amount.
“Where our typical allocation would be $650,000 per year it would be reduced by about $210,000 — half for each of the two years — which would bring us to a 2019 typical allocation of $440,000,” he said.
“This is approximately the allocation that Sundre did receive, so I’m not sure I would be expecting any additional funding after the fall budget.”
As for operating, he said the town has typically received roughly $35,000 from MSI. The municipality has also on average gotten approximately $150,00 from the gas tax.
The reason the amount received from the gas tax was basically double that of past contributions is because the allocation included “a one-time funding top-up from the federal government.”
Albert also said the municipality had been anticipating in its multi-year budget an eventual end to municipal sustainability funding.
“It was actually due to expire. We weren’t really counting on any additional funding after this year,” he said, adding towns have a time span of six years to use funds allocated through the MSI program.
“The MSI capital allocation can be carried forward an additional six years.”
Furthermore, once the provincial government announces how much each municipality will be allocated, he said the funding is not made immediately available.
“They don’t release the money until you have an approved project,” he said, adding the town has to fill out plenty of paperwork outlining detailed plans, which can be done at any time throughout the year, for the money.
“It’s not until you have a specific spending plan outlined that they release the funds.”
Whether for pipes in the ground, sidewalks, roads or engineering, he said a municipality’s proposed capital project must meet certain criteria for MSI funding to officially be approved and released.
Municipalities have to develop and present plans for how the allocated money will be spent before actually receiving a single cent. There could be a request for one major infrastructure project, or multiple requests to provide funds for several projects.
“It is kind of a good thing. They’re not just giving anybody a blank cheque and saying, ‘Go ahead and spend it,’” he said.
“Until we submit a project, we don’t get the funding. If it takes us another couple of years to find projects to spend the money on, we don’t get funds right away.”
Plans that have already been approved can also still be revised as circumstances change. Albert cited as an example the council-approved addition of the elevated boardwalk that was included in the overall scope of the Main Avenue West upgrade.
“We recently received a letter that said the revised project was accepted.”
That bumped funding up to $432,000 from an originally anticipated $281,000, he said.
An additional requirement before funds are received, he said, is for the provincial government to pass legislative approval of the program budget.
“So even with this announcement of allocations, it could be a little while before funds are actually received by municipalities.”
Albert also noted he was pleased to see included in the ministry’s announcement that the provincial government is “reducing some of the reporting requirements for the MSI operating portion and streamlining the process a little bit.”
Following this past spring’s election victory, the new UCP government announced it would not be tabling its first budget until the fall, a move intended to allow for more informed financial planning.
In the meantime, government operations would be funded through special warrants while an appointed panel would look into the state of provincial finances.
Since then, the UCP government has not released MSI funds to municipalities for the 2019-2020 fiscal year, and has implemented provincial funding holdbacks, notably for policing and libraries, until after the fall budget. The recent funding announcement did not address full police and library funding. To date municipalities have received only 50 per cent funding in both areas to cover operational expenses for 2019-2020.
The provincial government’s decision on Aug. 15 to finally issue MSI grant money follows increasing frustration and concerns from municipalities across the province.
However, because Sundre was already anticipating the end of the program in the coming years, administration developed a long-term budget that does not disproportionately depend on the fund, said Albert.
“It hasn’t held us back or held up any projects,” he said about the government’s decision to delay the provincial budget.
“We were kind of anticipating getting it this year and some next year, but after that, we were unsure,” he said.
“Because we don’t know what MSI is going to be, I don’t like to plan ahead for it.”
So going forward beyond 2020, Sundre has not made plans to allocate any of the MSI funding for a specific project, he said.
“We’re unsure what will happen in the future,” said Albert, adding that from his “perspective as a conservative accountant,” he had no desire to include numbers in a budget without knowing for sure whether the funds will even be available.
“We planned for a conservative approach, so this doesn’t really affect our budgeting.”
In the eventuality that MSI capital funding does come through in an amount higher than expected, he said the town would then use that money instead of drawing any more than necessary from the municipality’s restricted surplus funds.
Administration will be coordinating with council to pick a date for a fall workshop to review the town’s budget, including further discussion on levels of service, depending in part on whether residents provide input at an open house that has yet to be scheduled, he said.
— With files from Johnnie Bachusky
