EXERCISE IN UNCERTAINTY
City CFO calls capital budget ‘constrained’
A proposed $4.3-billion budget for city construction and repair projects for the next four years has been frustrated by uncertainty, Mayor Don Iveson said Thursday.
“The fact that we’re going into this budget deliberation with hundreds of millions of dollars of uncertainty for Edmontonians makes it very difficult for Edmonton city council to effectively prioritize,” Iveson said, following the release of the proposed 2019-22 capital budget.
The current funding agreement, the Municipal Sustainability Initiative (MSI) agreement, has been reduced by $61 million annually for the next three years and expires in 2021.
A new funding agreement with the province has yet to be reached. City administrators had to make a best guess at how much money may come from the province for 2022.
“Our administration has made some assumptions about what we hope will be there, but really the number is zero,” Iveson said.
Alberta’s municipal affairs ministry spokeswoman Lauren Arscott said in an email Thursday that discussions are ongoing for a long-term new deal.
“We are taking the time we need to get this right, and as the current MSI program does not expire until 2021-22 we have ample time to work on the details of the system,” she said.
The capital budget encompasses spending for new and existing infrastructure. A proposed operations budget, which sets spending for day-to-day civic services, will be released publicly on Nov. 1. Citizens will have an opportunity to weigh in at a hearing on Nov. 25, then council will have up to 10 days to debate the budgets, beginning on Nov. 28.
“This is a more constrained budget than we’ve seen in previous years,” Edmonton’s chief financial officer Todd Burge said Thursday as he outlined some of the budget’s highlights.
A priority was funding upkeep of existing sidewalks, roads and other city facilities — the $500 million per year earmarked for replacement and repairs is just 90 per cent of what was recommended to keep assets in “ideal” condition, but Burge said because of strong support for renewal in the past few budget cycles, the city is in a “good position” to stay on top of maintenance with the proposed funding.
Money for new projects was proposed in long lists of recommendations of items to be fully paid, funded only for design, or to be skipped for the next several years.
The budget highlights three big “transformational projects”— the Yellowhead Trail freeway conversion, LRT expansion, and the Blatchford development — as well as neighbourhood repairs, starting the alley renewal program, and enhancements to Fort Edmonton Park.
Some popular proposed projects that administration says the city can’t afford include planning and design for Chinatown’s Mary Burlie Park and Clarke Stadium enhancements to support FC Edmonton.
City officials also identified several projects that could be funded through debt, which in turn would mean tax increases. That list includes high profile projects such as the Lewis Farms Community Recreation Centre and Library, the first stage of upgrades to Terwillegar Drive Expressway, LED street light conversion and an upgrade to the Stadium LRT station.
Building a west-end recreation centre was a campaign promise of Ward 5 Coun. Sarah Hamilton, who said Thursday that debt could be a way to fund Lewis Farms if it’s approved. Hamilton said she knows there’s a lot of competing priorities in the capital budget, but said delaying Lewis Farms means delaying other recreation centre projects that are also in the queue to be built.
“That poses a significant risk to a growing city,” she said.
Iveson said he thinks the one per cent tax increase required to get Lewis Farms built is worth it, but he said the question is when that bump will be affordable.
In September, Iveson proposed asking homeowners in new developments to pay more for infrastructure in those areas to offset the cost, giving as an example the possibility of residents around Lewis Farms being asked to pay a special levy to fund the project, but he said Thursday he’s since heard from the public and council that there’s not a lot of appetite for that kind of measure.