November 21st, 2017

City’s focus likely to be on treasury and energy


By Medicine Hat News Opinon on November 9, 2017.

The ballots have been counted, the results are in, and this week the new city council group in the City of Medicine Hat resumed regular business following last month’s election.

It’s early days. A strategic plan is not due until January.

But what can Hatters expect for the next four years?

Mayor Ted Clugston made it clear in a successful campaign that city spending needs to draw back on capital projects and await private sector investment in the community.

Hatters no doubt have bated breath after the 2013 election was waged largely on economic development front, an oilpatch collapse in 2015 onward, and a retreading of business issues in the 2017 campaign.

If City Hall is to back off a building campaign, the new focus is obviously greater focus on treasury, energy production, budgeting and municipal operations.

Next year the city will still need to withdraw $16 million from its bank accounts to pay for operations while a revenue gap is tackled.

A 10-year budget plan calling for cost containment led to council closing the Medicine Hat Arena and Heald Pool. But a $750,000 trim of the transit budget brought changes that proved more than the community or council could stand.

So far, administrators have negotiated three of four union contracts that include a wage freeze for 2017.

Most expire in 2019, at which point they will be renegotiated during, perhaps coincidentally, the first year in the city’s next budget cycle.

A drilling plan for the city’s energy company and hopes to find helium have been discussed thoroughly, but the potential economic windfall hasn’t.

This council and the general public will also see the first arrival of treasury updates related to its deposits with provincial pension and endowment investment wing AIMCo.

A mid-year report presented in June stated $44 million had been transferred to a higher-return portfolio, and eventually about $130 million in money earmarked for oil and gas well abandonment will be parked with AIMCo.

A separate “Heritage Savings” account will receive energy profits that could return, at least meagerly, in 2017 or 2018.

Clugston is now more forcefully stating his opinion that new fields could be sold to improve the balance of that interest-bearing endowment fund.

He did so again at this week’s Breakfast with the Mayor address.

That fund, long a pet project of Clugston’s, will purportedly supply capital dollars back to the city projects, though some can be used for tax abatement and two other existing funds are capital focused.

It’s obvious that more clarity is required there.

In terms of building, construction of the new Veiner Centre is underway, as is work to relocate a second fire hall. Major portions of berm construction could be complete in 2018, though the matter of funding the flood defence network via grant applications to provincial programs is outstanding.

In a related vein, still due is an audit of how the city could stand to maximize how it seeks out grants and other levels of government and applies them to city projects.

Staying with provincial matters, the city’s power production sector announced last spring that it would undertake a major review of how the city’s power plant can adjust to and thrive under a new provincial regime in the energy market.

The last four years saw city council sell gas fields, open a new power plant, start a trust fund for business unit profits, and bear down on operating costs.

That’s four significant departures from past practice.

It will be most interesting to see if it works.

(Collin Gallant is a News reporter. To comment on this and other editorials, go to http://www.medicinehatnews.com/opinions.)


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