The Local Government Fiscal Framework (LGFF) appeared on Okotoks town council’s agenda once again at their latest meeting.
Several municipalities and municipal groups have been voicing their concerns over a lack of funding under the LGFF for over a year, with many requesting an extra billion dollars to be added.
Okotoks town council was presented with a report going over the implications of the LGFF.
Chief Administrative Officer Elaine Vincent explained that the previous funding program, the Municipal Sustainability Initiative (MSI) provided more funding on average from 2007 to 2023.
According to Vincent, MSI funding peaked in 2020 and 2021, then fell in the last two years, with the LGFF’s base level of funding being built upon those lower years.
"The problem that I have is that the LGFF is based upon the bottom of MSI. It's not based upon where it was in 2021, where it was the higher amount. If they actually took the LGFF to be funded at where it was at the high point in MSI on a per-capita basis, I could defend that... The province lowered the amount of MSI we could get, we hit the floor, and now the LGFF is based on that floor amount, not the ceiling amount. That's the problem for municipalities.
Mayor Thorn spoke about the effects of inflation combined with the funding the LGFF is set to provide.
"It's actually used to pay and maintain for a lot of our current infrastructure. Its roofs, its trucks, its new fire trucks. On the whole, from a municipality's perspective, we've got close to a $30 billion infrastructure deficit in the province of Alberta, then you take and add in what municipalities have seen for inflation. Yes, we're not buying the food that our residents are buying but we are buying vehicles, we're buying concrete, and the escalation and change in those costs that are non-negotiable... has been significant."
The report included on the council agenda provides examples of the goods that have seen sharp increases in price due to inflation.
That includes a 620 per cent increase to underground electrical conduits ($11.81 in 2020 compared to $85.02 in 2023), and a 127 per cent increase for concrete ($900.48 dollars in 2020 compared to $2,047.25 in 2023).
The report also shows significant increases to fire equipment costs including a 73 per cent increase for aerial ladders ($1.5 million in 2021 compared to $2.6 million in 2024), and a 50 per cent increase to rescue engines ($800,000 in 2021 compared to $1.2 million in 29024).
While the town has taken measures to accommodate for the funding shortfalls, Thorn says it can only go so far.
"When you take a look at our 10-year capital plan, a big chunk, about 35-40 per cent of our 10-year capital plan that's for non-off-site levy projects, a big majority of that is maintenance, improvements, and maintaining life. That's, for me, where I think our biggest risk is. How do we continue to maintain quality infrastructure if there's not also the investment to do it? We've done a lot of work as the Town of Okotoks, I think we've done a good job in that we've got a strong Asset Management program and we've corrected for this, but that still doesn't offset the deficit that exists before that correction took place."