The municipality has received a half million dollar financial boost from the provincial government, but that money isn’t necessarily good news.
On March 6, Alberta’s Minister of Municipal Affairs, Diana McQueen, announced $400 million of additional funding for municipalities through the province’s Municipal Sustainability Initiative.
The MSI was set up in 2007 when the government of Alberta allocated more than $6 billion to helps municipalities undertake capital projects. The $400 million comes in addition to the money already set aside.
The extra money will be split amongst the province’s municipalities and added to the $1.2 billion that was already dolled out this year.
The money is split according to a complicated formula and, according to Alice Lettner, the municipality’s director of finance, Jasper’s share of the funding is $566,000.
That money will be added to the $1.4 million the town received in the government’s initial 2014–15 budget.
But, on March 10 Lettner warned council to be prudent with the additional funding, because the amount of MSI funding the municipality will receive in the upcoming budget is unknown.
“While the government gave us an additional bump to the 2014–15 MSI capital grant, we’re uncertain what we’re going to get for 2015–16 and therefore are being cautious,” she said in an interview March 11.
She pointed out that in 2009 the province unexpectedly reduced the amount of MSI funding it dolled out, after an economic downturn left it on shaky financial ground.
Since the recent nosedive in the value of oil on the international market, Premier Jim Prentice has been warning Albertans that tough choices will have to be made in the March 26th budget.
McQueen herself even made allusions to the difficult budget ahead when announcing the MSI funding.
“This funding should help our partners meet their capital infrastructure commitments and position them well for the tough budget cycles ahead,” she said.
It’s language like this that gives Lettner pause, and why she advised council to consider the possibility that in the future the municipality won’t receive the level of MSI funding it’s used to.
“What we are concerned about right now, with the current economic climate, is that the amount of money that we have been receiving in the past number of years will be reduced to the point where it makes it difficult to fund our capital projects.”
Helen Rice is the president of the Alberta Urban Municipalities Association. She said not even the AUMA has an idea what MSI funding will look like in the upcoming budget, but a change is not at all out of the question.
“Everybody in Alberta is expecting it’s going to be a tough budget. But I expect the worst that will happen to us will be if they extend the MSI funding over a greater number of years ... then that cuts down how much we get annually.”
But, she said, the $400 million boost will go a long way to alleviating that.
According to Lettner, Jasper generally receives more than $1 million of MSI funding each year. In the past the money has gone towards projects like the library and cultural centre, and this year it will go towards purchasing a new grader.
But in the next few years the municipality plans to install new sewer lines, power lines and sidewalks in some areas of town. This will be an expensive, multi-year project that involves ripping up infrastructure, and the municipality was planning on using MSI funding to get it done.
But Lettner warned against starting the project, because if MSI funding doesn’t materialize, the municipality could be left with a half-finished project for far longer than anticipated.
“We would prefer not to get ourselves into the middle of a project that we possibly couldn’t complete,” she said.
Until the budget is released, however, there is no way to know what capital funding will look like for the next year.
The government remains tight-lipped about what the budget will look like, but a representative at McQueen’s office told the Fitzhugh that the money should help municipalities through the “tough budget ahead.”
Trevor Nichols
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