The success of the capital partnership program now depends on the willingness of the city’s non-profit groups to step up with their ideas for significant infrastructure and bring them to fruition.
On Monday city council put the finishing touches on the program by approving it. In development since last June, the program creates a fund of $40 million that groups with large infrastructure projects can draw upon, provided they can supply two-thirds of the total cost themselves.
The city will borrow the money internally and assign a percentage of grant money to the program, building it up over five years to the $40 million total. Paying the money back will increase property taxes by 0.3 per cent per year, compared to the 0.7 per cent that borrowing externally might have cost.
It is a creative idea, for sure, meant to address the growing gap between what the city pays to repair and renew existing infrastructure and what it spends on growth projects. Rather than simply using the fund exclusively for the city’s own purposes, the city could see as much as $120 million of growth if the program is completely subscribed over five years. Eligible groups include non-profits and even the city itself, while eligible projects include community halls, recreation facilities and cultural amenities.
It is clear the city can’t afford to build everything St. Albert wants or even needs. As it stands today, council must look to its limited budget every year and pick and choose which capital projects to fund. The new program means that large funding requests – the city’s minimum contribution is $500,000 – can follow a process instead of everyone taking turns lobbying council for the money.
Examine the policy behind the program, however, and it’s equally clear the money won’t be handed out easily. Groups seeking city funding will need to have their proposals in solid shape and their share of the project funding in place before they even submit the paperwork.
Mayor Nolan Crouse suggested earlier this year that the community might not have the capacity to build $120 million worth of infrastructure. City manager Patrick Draper, who conceived the program, counters that interest is high and that non-profits feel they could spend the $40 million in one year.
So we wait to see just how popular this program will be. If it is well subscribed, the city should be credited for designing a creative funding plan. On the other hand, if Crouse is right and our local groups don’t have the capacity to raise their share of the funding, it won't get off the ground.
It will take a 0.3 per cent annual tax increase to give it a try – a reasonable risk for an investment that could pay significant dividends for the community.
