NEWS FILE PHOTO Crews replace a storm sewer catch basin at the intersection of Aberdeen Street and Fourth Avenue. Provincial transfers to municipalities for infrastructure projects could be a key area of cost-cutting in the upcoming Alberta budget, according to a report released this week.
cgallant@medicinehatnews.com@CollinGallant
Changes to provincial grants that help pay for city construction projects were the focus of debate at Monday’s council meeting, with councillors wondering how plans may be affected by a 15 per cent drop over the next two years.
That could total about $1.5 million less per year to pay for capital construction budgets that total about $20 million each year to replace or upgrade aging water lines, roads and sewers.
The question arose as council received bid results to replace a 109-year-old sewer on Belfast Street, along with an 80-year-old water main that’s broken twice recently, and a section of 106-year-old water main on Kingsway Avenue.
Administrators said the city is generally “ahead of the curve” when it comes to addressing infrastructure problems, adjustments are always being made, but the work will need to be done.
“I’m comfortable with the speed we’re progressing on this,” said utilities commissioner Brad Maynes. “Some of this has been in the ground for 80 to 90 years and you can’t expect it to last that much longer … where we’re at today, we seem to be doing OK.”
Eight years ago the city adopted an infrastructure renewal plan that forecast more than $900 million would need to be spent over 30 years as assets like roads, pipes and bridges reached the end of expected lifespan.
Each year, “renewal” budgets increase in value, with councillors generally agreeing that accelerating year-to-year will eventually lead to savings.
However, on Monday councillors wondered if that aggressive program could be slowed in the face of budget constraints.
“There’s an indication that going forward, (infrastructure) funding from the province will be limited,” said Coun. Darren Hirsch.
Last fall the provincial government announced that in 2022 it would replace the Municipal Sustainability Initiative with a new municipal infrastructure grant program, called the Local Government Fiscal Framework.
The MSI funding totals $993 million in 2020, provided on a mainly per-capita basis to cities. Last year, Medicine Hat’s share was about $11 million.
The MSI total is set to drop to $897 next year, before the new program, worth $860 million in 2022, is tied 50 per cent to provincial revenue, meaning amounts will vary.
Administrators said the city’s asset management program could be altered depending on the circumstances, but that it was more beneficial to replace before a breakdown than after.
The chairman of the utilities committee agreed.
“I’d rather have the sewer in front of my house working, thank you very much,” said Coun. Phil Turnbull. “We’re trying to maintain that balance to make sure that we don’t have a breakdown.”
Since 2014, the city budget has grown for replacing infrastructure installed before 1970, which will be near end-of-service in 2040.
This year, the municipal works department will spend $6 million on general infrastructure and roads, plus $4.5 million for storm sewers.
Utility budgets earmark $5.2 million on general water line work, plus another $2.25 million specific to downtown lines in 2020. General work could stay at $5 million per year in 2021, then rise again in two years time.
Similarly, sanitary sewer projects will cost $5.2 million this year, $3 million next, and then $5.2 million again in 2022 as the city has committed to a downtown project every two years. Each budget raises by about $500,000 each year.
