City to get boost from Gas Tax Fund
By COLLIN GALLANT on March 22, 2019.
cgallant@medicinehatnews.com@CollinGallant Millions in new federal infrastructure money will flow to the City of Medicine Hat out of the federal budget announced this week, but planners say they will need time to determine how much and how best to spend it. Last year, the city received $3.5 million from the Federal Gas Tax Fund, a decades old program that charges tax on vehicle fuel and uses the cash to pay for roads and infrastructure spending. This week, Finance Minister Bill Morneau announced the outlay for municipalities would double in 2018 – a one-time boost to get more infrastructure projects underway. Details about how the provincially administered program will affect Albertan cities isn’t expected until after the ongoing provincial election. However, finance officials tell the News that while conditions on the money are not yet known, an injection of cash for infrastructure projects would be welcome. It could be folded into existing project budgets, to expand scope or add new work, or be used to replace other grants that could be moved elsewhere to avoid borrowing. “We make assumptions in the budget about our grant funding,” said Dennis Egert, general manager of the city’s finance department. “Any time there are changes to grants, we examine those to find the most efficient funding formula (for projects). It may well be that (new Gas Tax) funds will replace (debt) financing in some spots. “We’ll have to look at it.” Gas Tax funds are currently slotted into the city’s recently passed 2019-2022 city budget to pay portions of bridge repairs, storm sewer improvements throughout the city and co-ordinated downtown road and piping repairs, as well as replacing an ice slab at a community arena. The current policy is to not borrow for storm sewer repairs but pay for projects with operating funds (a portion of tax revenue), or with grants from other governments. City planners are just five years into a 30-year plan to replace aging infrastructure throughout the city. A four-year general construction plan was passed last December showing no new major road projects over that time The previous transportation policy was to tackle expansion or renewal of a major arterial roadway each budget cycle. Beyond a reworking of Industrial Avenue, no major work is planned until after 2022. The program pays out on a per capita basis, after it is forwarded to the province to administer. That means allocations may change slightly considering population change, said Egert. In 2017, the city allocated its share toward the replacement of 100-year-old storm sewer lines along Allowance Avenue and general storm system lining throughout the city. In 2018 the fund provided Medicine Hat with about $3.5 million for road projects All municipalities receive some share of the fund, including Cypress County ($422,600 in 2018), Redcliff ($309,000), Bow Island ($113,000) and Brooks ($800,000). The fund also provided minimum payments of $50,000 to local governments in the villages of Foremost and Empress, as well as the M.D. of Acadia. 21-20
