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Council to debate giving housing agency $2.2 million for downtown project

An additional $963,000 is needed to buy replacement transit busses in 2026, and a report detailing the Servus Place recreation centre's 2023 $1.6 million operating deficit are also on St. Albert city council's agenda this week.
A bird's eye view shows the area at 22 St. Thomas St. that will be the future site of a Homeland Housing project. SCREENSHOT/Google Maps

On Tuesday afternoon St. Albert city council will debate whether or not the city provides Homeland Housing with an additional $2.19 million to be used towards the development of the agency's downtown affordable housing project.

The project, referred to in council documents as the 22 St. Thomas Street project, involves a mixed-use rental building that will have 118 apartments and some street-facing commercial space on the ground floor. 

In the fall of 2022 council voted to sell the currently undeveloped 1.3 acre property on St. Thomas Street to Homeland Housing for $1. At the time, the property was appraised at $2.65 million.

As part of the city's 2022 agreement with the agency, at least 55 per cent of the building's rental units will need to be maintained as below-market housing for a minimum of 30 years.

Since many affordable housing grant programs at the provincial and federal level require municipal funding contributions toward a project that is more than providing land, Homeland Housing is requesting St. Albert put up $2.19 million in funding towards the project's capital costs in order to “strengthen” the organization's grant applications.

“The city's increased funding commitment is expected to strengthen Homeland Housing's application to both the Alberta Affordable Housing Partnership Program (AHPP) and federal housing funding and loan programs,” reads a report to council written by the city's affordable housing liaison, Lory Scott.

“Administration is recommending that the city's funding commitment be subject to Homeland Housing's confirmation of receipt of grant funding from the province and/or other funding sources, enabling the project to proceed to the construction phase.”

Scott wrote that without this additional funding, which would bring St. Albert's overall project contribution to around 10 per cent of total costs, council risks further delaying the 22 St. Thomas Street project, or potentially even making the project unviable.

“St. Albert's 2021 Statistics Canada data indicates a shortage of 3,165 affordable rental units, with 1,615 owner and renter households in core housing need,” Scott wrote, adding that just 1.8 per cent of St. Albert's housing stock is considered affordable housing, compared to the provincial municipal average of 3.1 per cent.

The Gazette did not immediately receive a response from Homeland Housing's chief executive officer Raymond Cormie about the funding request.

Additional $963,000 needed for bus replacements in 2026

Another item on city council's June 18 meeting agenda is to potentially increase the budget for purchasing nine new transit buses that will replace some of the existing fleet in 2026.

The increase is in line with a similar increase council approved last month to the city's three-year spending plan to expand the transit fleet by two, and to replace 17 of the city's existing diesel busses, which have reached the end of or even superseded their 18-year life expectancy.

As of last month, the city's spending plan involves $1.83 million this year to purchase two new busses in order to introduce transit services in Jensen Lakes and Riverside; about $10.5 million in 2025 to purchase eight replacement busses; and then $8.27 million to purchase nine replacement buses in 2026.

A report to council written by city fleet manager Tom Kumka says that the approved $8.27 million 2026 budget will need to be increased by $963,000 as a result of negotiations between the city and bus manufacturer Nova Bus Inc.

“This negotiated pricing for 2026 busses is consistently higher than the values estimated in 2023 [and is comparable to the increases approved last month],” Kumka wrote.

“Proceeding with the 2026 lifecycle replacements with this manufacturer at this time allows for current pricing without inflated risk pricing but will still allow for delivery in 2026.”

Kumka did also note, however, that Nova Bus Inc., one of two Canadian bus manufacturers — the other being New Flyer — actually plans to stop producing diesel engine transit busses at the end of next year. The company's decision won't affect the city's order for nine new busses to be delivered on or shortly after Jan. 1, 2026, although Kumka's report doesn't explain whether or not the city will be able to purchase replacement parts from the company in the years to come as the busses will inevitably need to be repaired over the course of their 18-year lifecycle.

With Nova Bus Inc.'s decision to get out of the diesel engine bus market, Kumka wrote that “minimal competition” in the industry may mean the city will see “future price volatility” if the city is to maintain the majority of its transit fleet as diesel powered, rather than electric.

RELATED: St. Albert's electric buses not lasting as long as expected

Kumka's report also includes a breakdown of how old more than half of the city's transit fleet is, including the busses set to be replaced over the next few years.

“As of 2024, the conventional transit fleet of 62 busses consists of three busses that are 19 years old, seven busses that are 18 years old, 13 busses that are 17 years old, and 14 busses that are 15 years old.

The city's seven electric busses are all between six and seven years old, and the Gazette has reached out to the city to see how old the city's remaining 18 unaccounted for busses are.

Servus Place runs $1.6 million deficit in 2023

According to the city's annual Servus Credit Union Place financial report for 2023, which is included in the June 18 council meeting agenda, St. Albert's main recreation facility had a $1.6 million operating deficit last year.

The $1.6 million deficit marks the third straight year where the facility has posted a lower deficit than the year before, as the facility had a $2.1 million deficit in 2022, and $2.9 million deficit in 2021.

However, an administrative report notes that growth in membership and programming revenue has “begun to plateau,” and the city may not see improved cost recovery this year.

“In 2023, Servus Credit Union Place generated $7.2 million in revenue against a budget of $6.3 million, $839,000 greater than budgeted revenue,” the report reads. “The two major drivers of the increased revenue were admissions and program revenue.”

“From an overall admissions perspective, users continue to seek out flexible access options such as monthly memberships or day admissions, both of which ended the year better than budget by a combined $367,000 ($133,000 and $234,000 respectively).”

“These numbers have begun to plateau and are not anticipated to see continued significant increases past 2024.”

Administration is currently forecasting a $1.8 million Servus Place deficit this year, although the city will continue to “monitor usage patterns and communicate forecast adjustments as part of the quarterly reporting process,” the report reads.

Jack Farrell

About the Author: Jack Farrell

Jack Farrell joined the St. Albert Gazette in May, 2022.
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