Braced for severe provincial cuts, the Town of Okotoks said it will be able to absorb nine per cent loss of funding over two years.
The United Conservative Party (UCP) released its first budget Oct. 24, announcing a $94 million cut to capital funding through the Municipal Sustainability Initiative (MSI) in 2019 and an additional $142 million cut in 2020 for a total of $236 million, or nine per cent, over two years.
“We’ll have less money to do things, but we had anticipated actually a larger cut than that,” said Okotoks Mayor Bill Robertson.
He said the Town had planned for a worst-case scenario and its staff is currently preparing budgets with more drastic cuts to MSI predicted.
“Ultimately we’re pleased it didn’t reach the level we thought it might reach,” said Robertson. “We’ll be able to absorb that nine per cent.”
Starting in 2022-23, municipalities will see a new funding formula called the Local Government Fiscal Framework. The UCP plans to split $860 million between all municipalities, with Calgary and Edmonton receiving just over half the funds. Money will be adjusted each year to reflect half the amount of provincial revenues, so if revenues rose by six per cent municipalities would increase by three per cent – but funding would drop according to the same model, should the Province lose money.
Robertson said the framework could be an interesting model, though he can’t predict how it will work for Okotoks at this time.
He is interested in changes to funding for the Calgary Metropolitan Regional Board, which in 2019 was given $1.5 million provincial dollars to operate. In 2020 funding will be cut by $500,000 followed by another half million in 2021.
After three years it will be funded by the member municipalities without provincial assistance, he said.
“We certainly didn’t budget anything for that,” said Robertson.
The Town of Okotoks currently works with a five-year projection budget model.
The CMRB was previously the Calgary Regional Partnership, which was a voluntary organization. In 2018, the CRP disbanded and the CMRB formed as a mandatory organization for all municipalities in the Calgary region with a population of 5,000 or more.
“There were a lot of municipalities who were dragged in kicking and screaming because the government made it mandatory,” said Robertson. “When it was paid for by the government, that was one thing. But when you’re unhappy in an organization and you need to start paying for it yourself, that’s certainly another can of worms.”
Okotoks council will also be interested to see how Water for Life funding is distributed, he said. The budget projects 10 per cent more in the funding than the previous NDP government had estimated, with $51 million in 2020. There is also $50 million budget each year for 2021-22 and 2022-23.
“Still our number one concern is the water pipeline,” said Robertson. “Money is tight, so I guess it all comes down to the grant approvals.
“Okotoks has been waiting for years for funding for a pipeline, but certainly all municipalities would argue their need is the greatest so they should be first.”
Foothills County CAO Harry Riva Cambrin said overall the budget won’t have too much of an impact on the municipality in 2020 due to previous savings in the county.
“I would say we’ve fared quite well in the scheme of things,” said Riva Cambrin. “Because we received the gas tax and we hadn’t used all of our previous MSI funds, 2020 we should be fine
“It’s probably three years out before we see a large impact in our capital projects from the cutbacks to MSI.”
He said the proposed Local Government Fiscal Framework would result in about 20 per cent less funding than what has been historically received through MSI, if the provincial economy doesn’t pick up substantially.
The total would be an impact of about $1.2 million for Foothills County, he said. That funding is typically used for projects like paving and rebuilding of roads, water and sewer infrastructure, and bridges, he said.
“We have time to plan things out over a little longer period of time, so we’ll have to be fairly careful what we take on from a capital perspective,” said Riva Cambrin.
He said funding for the CMRB will be an unknown in the County budget for the next few years as changes are made to its provincial support.
The County was pleased to see no change to libraries, Family and Community Support Services and education tax, he said.
For Foothills, the biggest question mark lies with policing, he said. The funding model is still under review by the Province and could have a significant impact on the county.
“We’re not sure, that could be a major hit to us,” said Riva Cambrin. “At this point we don’t know where they’re headed with that one. We expect something probably in the next budget.”
Highwood MLA RJ Sigurdson said he thinks the UCP budget is fair.
He said the government cannot continue to go back to the taxpayers for more money, and it’s time to fix the issue at the provincial level.
“I think it’s very well thought-out with support in areas that are critical,” said Sigurdson. “We need to get our spending in-line.”
