Financial crisis prompts Town of Grande Cache to consider dissolution
Grande Cache is looking at giving up its town status and becoming part of the surrounding municipal district because of continuing financial problems.
The town, which faces a sharp drop in property assessments and a rise in taxes following layoffs at several major employers, asked the province two weeks ago for a viability review to determine whether it can keep operating.
“In small municipalities such as we live in, the revenues are very limited … We have been talking about this for a very long time,” Mayor Herb Castle said Sunday.
“It’s basically us struggling with raising utility fees and user fees, raising taxes and trying to meet our cost requirements … The town is some 45 years old and the infrastructure is old.”
The economy has also gone through a downturn, although Castle said this is not the reason for seeking the review.
Grande Cache Coal suspended surface and underground operations during 2015, throwing about 400 people out of work in the centre 430 kilometres northwest of Edmonton, built as a coal town in 1969.
In March, Maxim Power Corp. announced it was temporarily shutting a coal-fired electrical generator, putting another 37 people on the street.
There are also concerns about the future of the medium-security Grande Cache Institution, a provincially owned facility run by the federal government under a lease that expires in 2020 that still hasn’t been renewed.
“We’re seeing more houses being foreclosed because people can’t make ends meet,” Coun. Mary Nelson said.
“That hurts our revenues down the road. That hurts our businesses, which are quite heavily taxed. Unfortunately, we just can’t offer a lot of relief for the businesses.”
The town has implemented a wage and hiring freeze, but without federal and provincial grants for a new $13-million water treatment plant, people would have had to boil their drinking water.
About $60 million in spending is forecast over the next few years.
The review sought from the Department of Municipal Affairs involves looking at governance, finances, infrastructure and services to determine whether changes are required for the community to remain viable.
Local residents — the population is thought to have dropped from 4,319 people in the 2011 census — get a vote if councillors support dissolution, which could see Grande Cache become part of the surrounding Municipal District of Greenview.
“Council believes the town’s financial situation in 2016 is sustainable,” says information on the civic website, which indicates a dozen other Alberta villages and the town of Swan Hills are undergoing or have completed similar reviews.
“Looking into the future, with the anticipated reduction in assessment and expected/unexpected capital requirements to maintain the town’s infrastructure, we anticipate the town will be in an increasingly unstable financial position.”
Financial problems grew over the years because money wasn’t put away to replace infrastructure and user fees didn’t cover service costs, the website says.
A public meeting is scheduled June 27, but Nelson is concerned Grande Cache won’t be able to survive as an independent municipality.
“As is, our town cannot financially operate much longer without serious, serious cuts or serious tax increases.”