Municipal Affairs Minister Ray Danyluk told a St. Albert breakfast crowd municipalities are important to the government, but he doesn’t know what their funding will look like next year.
Danyluk addressed the local Progressive Conservative Association’s breakfast meeting Thursday when he told them the provincial government is committed to stable funding for local governments.
“The premier feels that the work municipalities do is very critical.”
The province has just started its budgeting process, however municipal budgets — including St. Albert’s — are well under way. While the province’s fiscal year runs from April 30 to March 1, municipal budgets are usually based on the calendar year.
A significant portion of municipal funding comes from provincial grants, which Danyluk says will not be revealed until the province completes its budget. Premier Ed Stelmach has already stated next year’s budget includes cuts in some areas.
Danyluk doesn’t know what, if any, cuts are planned to municipal grant programs, however the government wants to work hard to give that certainty by the end of the year.
“You have to know that we are in the middle of the budget process, but our premier has said very clearly that strong municipalities make good communities.”
One of the most significant provincial grant programs is the municipal sustainability initiative (MSI), which provides capital dollars for infrastructure projects.
Annual funding for municipalities had been set to increase annually, however this year’s amount held at 2008 levels, catching some municipalities off guard.
City manager Bill Holtby said the city is not banking on increases to grant funding. The city’s budget assumed a 20 per cent reduction.
Holtby said the city will be hurt by fewer capital dollars, but he understands the predicament the province is facing.
“It is really prolonging some work that should be done, but we all respect the fact that the resources are limited.”
Dean Screpnek, chief financial officer said the city was originally expecting $20 million in funding through MSI, but has budgeted for just $16 million in anticipation of a cutback.
Screpnek said the province has hinted the cutbacks to MSI funding could be as much as 25 per cent, which would force some revisions before tax notices are mailed next spring.
“If the worst case scenario occurs we need to go back into our budget and make some last minute amendments, probably by cutting back on some of our capital projects.”
The additional five per cent would represent about $1 million in funds for the city.
St. Albert also receives about $3 million in grants for city operations, including money for libraries, policing and Family and Community Support Services, which Holtby hopes remain untouched.
“We would really strongly encourage the province not to cut the operating because that would be a direct hit to our ratepayers in terms of either a tax increase or service level reductions.”
Holtby said it would be up to council to review what changes might have to be made if those grants don’t come through.
“Even though it might be a policing grant or a library grant, council would have to decide where they wanted the reduction to be made.”