Cold Lake Mayor Craig Copeland described the province’s decision to withhold the $16-million in 2019 ID 349 money as a devastating blow to the community as a whole.
“I’m just concerned… How do you do a budget without knowing this number? This is a huge concern to the city and it should be a concern to our taxpayers in terms of what it could mean not having the 2019 money.”
CAO Kevin Nagoya gave an overview of a letter from Alberta Minister of Municipal Affairs Kaycee Madu to the city during council’s Nov. 26 meeting.
“I think the one item to point out here is it appears the ministry is withholding the ID 349 funding of approximately $16-million of the 2019 fiscal year,” he noted. “That’s signalled within the letter, and 2019 is pretty much done, so that’s a cash issue for not only us, but for the region.”
The overall future of the ID 349 agreement is uncertain, Nagoya explained.
In 2011, the City of Cold Lake and province created the ID 349 agreement. In order to sustain the municipality, the document outlined the amount of tax dollars from the Cold Lake Air Weapons Range the city would receive every year.
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Last year, the then NDP government redrafted the agreement, and portions of the monies from the air weapons range were distributed to surrounding municipalities including the County of Lac La Biche, MD of Bonnyville, Town of Bonnyville, and Village of Glendon. Cold Lake received the bulk of the funds at $16-million, however, it was still a significant cut back from the city’s original $26-million.
The recently elected UCP government has brought the topic back to the table and are reconsidering how the funds are divvied up, which has left all communities involved wondering what’s next.
“We’re waiting for them to see if they’re going to change it in any kind of fashion. We want to be able to work on our future for our community, and not having an answer right now… it’s placed council in a precarious position on what to do not only on the operational side, but the capital side as well,” expressed Copeland.
He continued, “This time last year, even though we didn’t know how much money we were going to get, we utilized the 2018 number which was $16-million, but of course, anything above that would have been thrown into capital, but when we did the 2019 budget we positioned ourselves with the $16-million and we don’t have any of that money yet.”
The letter also advises community leaders that any recommendations for the new revenue sharing model must be submitted to the minister by March 1, 2020.
Coun. Chris Vining described Municipal Affairs withholding their 2019 property tax revenue until they’ve come up with another funding model as “directly going against the city’s best interest.”
“I’m not quite sure what the minister is at with this. I’m not sure if he feels like he’s going to magically somehow get a faster conclusion to this by hanging onto the 2019 tax dollars, which disproportionately affects us as the city and our ratepayers,” he noted.
The uncertainty has also created a hurdle for city staff attempting to create 2020 draft budgets.
Nagoya explained that while the ID 349 dollars were an added bonus for some municipalities, the city relied heavily on the funding for day-to-day operations.
“We have counted so much on that money for our operational, this isn’t just capital, we could put capital off and stop our spending, but when we accounted for operational that’s paying our staff and doing everyday work. How long will the city be able to go and be able to pay our staff?” wondered Coun. Vicky Lefebvre.
Copeland said, “Easy way to say it, is about 40 per cent of our funding is out in left field right now.”
Council is hopeful the province will provide some clarity before the year-end, but in the meantime, Copeland noted they will have to pass a budget “of some kind.”
“Let’s hope the province, before year-end, is going to bring forward an agreement that treats everyone on a per capita basis on some form… equitably.”
Nagoya stressed that in order for the city to adhere to legislation, they must provide the province with not only an interim 2020 budget, but also a three and five-year projection.
“We’re in discussions with the ministry because the new Municipal Government Act (MGA) requires you to have your budget passed, or a budget passed, sometimes you see municipalities pass some kind of interim budget, but when you do that, it essentially ties the hand of administration and we don’t get anything done until we pass an actual budget… The other challenge is under the MGA, you need to supply the ministry not only with the one-year budget, but an additional three-year forecast in your capital budget plus another five-year forecast,” he explained. “We’re seeking input from the ministry to try and understand because we’re not going to be able to comply with legislation in this short timeline on a set of unknowns, so what is the new process? Do we have to seek approval by the minister in order to not have those documents in place and submitted to municipal affairs?”
Vining said, “Do we have an idea if the funding we’re awaiting on for 2019 doesn’t arrive until after the March 2020, which is the deadline for these proposals… what kind of implications does that have to the city in terms of cash flow, investments, and reserves?”
“The city does have reserves, we don’t have large reserves. Do we have any immediate issues as of January or even December, no we don’t have any immediate issues because we have outstanding accounts receivables and surplus funding from unfinished projects year-after-year that are currently showing financial statements,” detailed Nagoya. “Administration is reviewing all outcomes and timelines to see where we financially sit on a month-to-month basis on a cash flow basis as you move into the next 12 months.”
Residents will have a chance to ask questions and learn more during a budget preparation open house on Dec. 11.
Two sessions are being held at the Lakeland Inn, one at 11:30 a.m. and another at 5 p.m.
Lac La Biche County council members are not on the invite list for discussions about the funding.
