City Notebook: Shy estimates predict big cash boon for city

By COLLIN GALLANT on April 2, 2022.

cgallant@medicinehatnews.com@CollinGallant

What to do with $50 million isn’t just a question for Lotto Max fans anymore.

This coming week council members will get their first peak at city’s 2021 financial statements and annual report when the audit committee meets.

Mid-year estimates predicted $50 million more than budgeted would come in from electric power sales and exports to the Alberta grid.

That was before an end of hot summer or cold weather in December, so earnings could be a record-breaking bonanza, akin to the days of rollicking natural gas prices 20 years ago.

With it, you could probably afford to put solar panels on half the houses in Medicine Hat, perhaps pick up and move the Event Centre, or build a whole fleet of riverboats.

But, not to spoil the party, it’s likely already been spent, tucked away or applied to other priorities.

We’ve already heard this winter that a new investment dividend – from a fund populated with power plant profits – will flow through new money for infrastructure projects that would otherwise require borrowing.

And don’t forget, the wind-down of the gas exploration and production unit will still need cash to cover the years-long requirement to pay taxes and access agreements that continue, though wells are physically closed.

It’s fun to imagine things going right, but not so much to protect yourself against things going wrong.

Would the Titanic have been such a big deal if they’d bought enough lifeboats?

Which brings up an interesting discussion.

Fuel for thought

In an honest debate, the move to build the Unit 16 power plant wasn’t a sure bet, but has become perhaps the best single decision made by the last council. It was green lit after years of former Mayor Ted Clugston pushing for the project.

The last council group also approved another power plant expansion, which should come online in May.

The results of that $65-million endeavour are yet to be seen, but the cash windfall from Unit 16 allowed a retool of the city’s reserve fund structure when, without it, it’s hard not to see how the whole system would have collapsed taking the city’s much vaunted bank account with it.

Of course, a strong counterpoint is had the same council members moved more quickly to shut down the money gushing gas production unit, the whole point would be moot.

In a weird way, elected officials’ longstanding position between 2012 and 2019 that things weren’t quite so bad obscures just how good its decision to expand the power plant was.

Heck, in the long view, while it might go down as one of the defining moments in the city’s history, maybe it’s not like securing gas rights in the Northwest field, or Harry Veiner’s ability to wrestle new industry to town.

Might it be as big as Ted Grimm’s battles to maintain the power company during deregulation?

HALO

Speaking of giving credit where credit is due, two moments during the HALO funding announcement caused awkward silence for opposite reasons.

During the requisite listing of those to thank for long years of advocacy, Premier Jason Kenney appeared to be building up to note the efforts of MLA Drew Barnes on the file, but didn’t.

Of course, there’s no love lost between Kenney and Barnes. The local MLA is a full-time critic of the premier and was voted out of the UCP caucus because of it.

Later, Ag Minister Nate Horner seemingly out of nowhere added Barnes to the list of thankees, much to everyone’s surprise.

It got an uneasy chuckle, but it’s also the sort of firm handshake, fair’s fair sort of humble politics that works well in rural Alberta.

“Honestly,” Horner told the crowd a lunch address. “He’s been writing letters and been at it for eight years.”

For the record, Barnes put out a video message following the announcement congratulating all involved.

“Thanks go to the taxpayers of Alberta for recognizing the importance of life-saving service and providing consistent funding for five years,” he said.

A look ahead

Council meets on Monday for another presentation on the ins and outs of property taxes, to receive information on the potential to offer low-interest home-energy improvement loans and to discuss operations results at Co-op Place.

The audit committee will meet Wednesday, and the federal budget is also due this week.

Collin Gallant covers city politics and a variety of topics for the News. Reach him at 403-528-5664 or via email at cgallant@medicinehatnews.com