Ceci fires back over city funding PAIGE PARSONS

Edmonton, Calgary rejected initial proposal, finance minister says

The province’s two largest cities need to “come to the table” if they want to get a municipal funding agreement nailed down, Alberta’s finance minister said Tuesday in response to Edmonton Mayor Don Iveson’s frustration about a deal being delayed.

Finance Minister Joe Ceci’s comments came on the heels of City of Edmonton administrators presenting city council with a $4.3 billion proposed capital budget for 2019-2022 on Tuesday.

The minister said a funding formula was proposed, but that Edmonton and Calgary rejected it and made a counter offer, and that a lot more discussion is needed.

“Until we can meet somewhere that works for the provincial government, as well as hopefully is satisfactory for them, we’re not going to conclude it,” Ceci said.

The capital budget captures spending for both building and repairing things like recreation centres, libraries and roads.

A proposed operations budget, which sets spending for day-today civic services, will be released publicly on Nov. 1.

A chunk of the funding that the capital budget relies on comes from the province through the Municipal Sustainability Initiative (MSI) agreement, which has been reduced by $61 million annually for the next three years, and expires in 2021.

Speaking after the budget presentation, Iveson said he remains frustrated that the revenue sharing deal hasn’t been finalized, pointing to an intention set by the province in its budget earlier this year to come to an agreement in 2018.

“That’s going to start to impact construction cycles, construction seasons for us, and that’s going to start having economic implications for Alberta. We really need to get on this,” Iveson said.

Municipal Affairs Minister Shaye Anderson said he’s optimistic an agreement could be reached this fall, but it’s a matter of reconciling the cities’ interests with the province’s fiscal challenges.

“Everybody is under a lot of pressure, and we just have to make sure we all understand where we’re going with this,” Anderson said.

Along with proposals for what should fit into the budget, city staff fielded questions about how it decided on the list of “unfunded” items that council can consider paying for with debt.

These were projects that staff deemed “important” but just not affordable in the budget, such as the Lewis Farms Community Recreation Centre and Library, and the first stage of upgrades to the Terwillegar Drive Expressway.

Ward 10 Coun. Michael Walters is hoping to add another potential project to the list of items that could be paid for with debt — an additional south side LRT stop at 40 Avenue.

Walters said residents who live in the area are driving south to a park-and-ride or taking a bus, getting on the LRT, and riding the train back through their neighbourhoods as they head toward the core.

There’s also a number of students crossing busy roads and making quite a trek to get from Southgate to Harry Ainlay and Louis St. Laurent schools.

“It was always planned to be there. It was skipped over, and it’s resulted in the LRT not really serving those communities through which it passes,” Walters said.

The funds proposed would only cover the design stage for this budget cycle, but Walters said with an additional high school planned to open in the next few years, he needs to “get it moving.”

Walters motion passed to include the proposal as additional information, but it won’t be considered for funding until further down the line in budget discussions.

‘ROTTEN EGG’

As councillors grappled with what was — and what wasn’t — on the list of projects funded by debt, they also queried city staff about the risk of taking on more debt and having less wiggle room, and what that would mean for the future.

“I’m wondering if, as governors, we might be avoiding some fiduciary responsibility by taking up that room,” Ward 5 Coun. Sarah Hamilton asked, describing it as potentially “leaving a rotten egg” for the next council.

Stacey Padbury, deputy city treasurer and branch manager, said climbing closer to the debt ceiling could mean less financial flexibility in the future, but that by 2026, some of the room for debt taken in the past will become available once again.

Citizens will have an opportunity to weigh in on both the proposed capital and operations budget at a hearing on Nov. 15. Council will then have up to 10 days to debate the budgets, beginning on Nov. 28.