October 14th, 2015 ~ Vol. 85 No. 40
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Council slashes millions from ten-year capital plan
Crowsnest Pass Herald Front Page
EZRA BLACK
Pass Herald Reporter
Since it began operating in 1982, all the sewage from Coleman, Blairmore and Frank has flowed into the Frank Waste Water Treatment Plant but a funny thing happens to the stuff coming down the pipes when the community experiences a high rain event or a spring flood: the volume of sewage goes up.

It’s not that people are flushing their toilet more often, said CAO Sheldon Steinke; it’s rainwater infiltrating an aging sewer system. And when the treatment plant can’t handle the volumes of sewage, it overflows right into the Crowsnest River.

At that point, the only thing the municipality can do by way of cleanup is to file a report with Alberta Environment.

Based on engineering assessments, it would cost about $44 million to repair all of the badly installed, broken or worn out pipes buried throughout the community. But the municipality doesn’t have that kind of money so it’s adopting a cost saving plan.

“We will do no preemptive construction projects to fix the cause of the infiltration of rain water and ground water,” said CAO Sheldon Steinke. “But we will have the equipment, manpower and supplies available to make emergency repairs when they are needed.”

The sewage system is just one capital investment contained in the 10-year Capital Plan that has forced council into some difficult decisions.

The 10-year Capital Plan includes a wish list of investments from fire trucks to projects for water supply systems, sewage handling, rural road dust suppression, street pavement, facilities and electrical system modernization that totals $147, 565, 500 but the municipality will only have about $42 million in potential revenue to fund these projects over the next decade.

To make up the difference, council has had to adopt the Pass’ version of Greek austerity measures and has hacked and slashed about $100 million in capital investments off of the plan.

Instead of investing $44 million to repair the sewers, council will be spending about $9 million. About $15.5 million will be taken out of the road rehabilitation budget and $3.3 million will be saved by not hooking up the Sentinel and Wolfstone subdivisions to municipal water supplies.

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But Steinke said there are additional costs to these austerity measures, not the least of which is the surrendering of the municipality’s budgetary initiative.

“It’s a reactive plan,” he said. “It’s not unlike avoiding changing the oil in your car until the engine warning light goes on half way between the Crowsnest Pass and Longview, and you don’t have four liters of oil in the trunk, what do you do”?

A reactive plan puts constraints on the way council can develop operating budgets each year because of the unknown repairs that might have to be made to fix infrastructure, said Steinke.

“Council didn’t really have much of a choice,” he conceded. “The municipality has no appreciable reserve funds to use at this time for the capital investment.

The community could use tax money to fund capital projects, said Steinke, but that would mean serious cuts to the municipality’s operational services.

The community is receiving about $42 million in grants over the next ten years but it will also be borrowing $10 million. Servicing the debt will cost the municipality $175,000 in 2016 and the payments will increase each year to 2022 when they will plateau at $789,000 for the remaining two years of the plan.

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The municipality will need to cut operating costs at every opportunity and increase the mill rate every year to service the debt. The plan calls for permanently closing Albert Stella Arena in June 2017, which will give the community $100,000 per year. Steinke said that for every $100,000 in cut costs, the municipality can borrow an additional $800,000 but the municipality might still be in debt beyond 2024, when the plan ends.

“The municipality does not have a crystal ball clear enough to see what it is going to be dealing with in 15 or 25-years but, we know that the capital projects will not go away and we must make decisions to address the future,” said Steinke.

However, the plan allows for funding upgrades to the swimming pool, the Coleman sports complex, the Bellevue seniors’ centre and roof repairs to the MDM Centre. Unsurprisingly, the Municipality won’t be able to fund too many initiatives in the near term unless they reduce operational costs. That means no proposed indoor pool, $20 million, or a performing arts theatre, $10 million, or upgrades to Hillcrest sports fields.

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October 14th ~ Vol. 85 No. 40
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