April 19th, 2018

Transit, helium, and budgets, oh my! City Hall in 2017

By Collin Gallant on January 2, 2018.

NEWS FILE PHOTO
Mayor Ted Clugston makes a speech to the crowd of supporters gathered at Beveridge Landmark Events on election night after winning a second term.

cgallant@medicinehatnews.com @CollinGallant

Helping to ring in the new for 2017 at City Hall were a new budget process, a new power plant, and new council elected.

The city also kept the old bus system and most municipal workers kept the same old salaries after accepting a wage freeze during union negotiations. Here’s list of the biggest stories in city government over the course of the year:

Transit
Hatters woke up on Sept. 5 to find a new bus system, and then again on Nov. 27, after cost-cutting route changes were reversed by council weeks after they were initially implemented.

In late 2016 council approved a cost review of the service that had been criticized in some quarters as too highly subsidized for the level of ridership. The new system, with fewer stops and no central location was panned by riders who said no night or weekend service made getting to work or around the city nearly impossible.

A 6-3 vote in late September restored old routes and sent budgetters back to the drawing board.

Budget

2017 will go down as the first year of the 10-year-plan to rebalance the city’s budget after removing energy division profits. The Financially Fit plan calls for phased in tax increases to fill a void left by low energy, oil and natural gas prices. Budget cuts and cost containment would limit the overall increase, and cash reserves built up from the energy division would help stagger increases from year to year.

Budgetters expect the gap will shrink to $16 million per year by the end of 2018, down from $23 million in 2016.

Mayor Ted

Ted Clugston won a second term as mayor on Oct. 16, winning a majority of the total votes over challengers former alderman John Hamill, broadcaster Scott Raible and local blogger Tom Fougere. New to council was Kris Samraj while former aldermen Phil Turnbull and Darren Hirsch were returned.

Power profits

After losing money on electrical generation in 2016, the city’s power plant was on track to make about $1 million by the end of 2017 — as opposed to losing another $3 million in an initial forecast.

Bank accounts

A heritage savings account for Medicine Hat became a reality in 2017, and city treasurers also moved about $77 million of funds earmarked to abandon gas wells into a long-term provincial investment fund.

Access to AIMCo., the government’s investment fund manager was granted by the province early in the year. An initial $1 million was deposited in the trust account, and blocks of cash from the energy division followed.

At Sept. 30, the portfolio was valued at $78.4 million, about $1.1 million more than had been deposited in stages over the previous nine months.

Debt

Council members were surprised to find that the city’s debt forecast was much higher than commonly thought following a News investigation in to city borrowing.

Coun. Les Pearson wondered aloud at council’s March 20 meeting about shrinking wiggle room under a provincially mandated debt ceiling and common explanation was that projects had come in under budget council sometimes approved borrowing bylaws it never intended to draw.

In the end, the News revealed neither was true. A change in borrowing procedures meant a standing bylaw to borrow $100 million to buy gas fields had expired and was no longer part of the equation.

Also, since a provincially mandated debt ceiling in based on the city’s revenue, lower gas and power income had shrunk the city’s ability to borrow.

While not much actual debt had been added, the debt relative to the cap had doubled since the mid-2000s. Administrators now vow to keep it below 75 per cent in the near future, compared to 25 per cent in 2013.

Arena closes

The ice plant was turned off at the Medicine Hat Arena last spring and the city is now considering offers for the 47-year-old rink that was a victim of cost-cutting measures in the 2017 city budget.

The building had been operated as a community rink with an operating deficit of $700,000 per year since the main tenant Tigers had moved to the Canalta Centre in late 2015.

The building and land is now being advertised to developers throughout North America.

City plans for the area envision the possibility of commercial or multi-unit residential on the site that overlooks the river.

Helium

It wasn’t a gusher, as the News erroneously reported in a September front page, but a city-plan to begin drilling for helium did make a splash in 2017.

Officials revealed the previously secret third-leg of a strategy to rejuvenate the city’s petroleum production business in a world of lingering low natural gas levels.

Along with divesting a huge block of low-return natural gas wells in Saskatchewan, drillers will commingle new oil exploration with opportunities to find the inert valuable gas. Three helium wells are schedule to be drilled starting in this fall, but results may not be made public until later in 2018.

New beginnings

Groundbreakings were held at the Veiner Centre, First Station No. 1, the Industrial Avenue Berm, and work is underway on a major reworking of South Railway Street and a $13-million repaving of the airport runway.

Ribbon Cuttings were held at First Station No. 2, and the Riverside berm.

Share this story:

Leave a Reply

You must be logged in to post a comment.