Aug. 03, 2011 - Issue #824: Folk Fest

How to build a city

In chasing provincial funding, the arena debate has become an either/or choice

Edmonton's chief financial officer painted a pretty bleak picture during a May 3 presentation to city council: "We really don't have enough money to meet our capital needs," Lorna Rosen advised, "that's the message we're trying to give you here." Rosen's presentation outlined highlights of the city's long-term capital plan, which includes projects such as replacing the Walterdale Bridge and LRT expansion.
Our city is far from alone. Unstable funding, steady population growth and aging infrastructure contribute to the infrastructure gap facing most Canadian municipalities. The gap is defined as the difference between required infrastructure investment and the funding available to pay for it.
The province has taken steps to address the problem. In 2007, Premier Stelmach announced the $11.3 billion Municipal Sustainability Infrastructure (MSI) fund to provide predictable, sustainable funding for municipal infrastructure projects over a 10-year period.
This year, $886 million in MSI funding was divvied up, with Edmonton receiving $165 million. The money contributed to several capital projects including the new police station in Terwillegar ($9.9 million), widening 137 Avenue ($14.1 million), the new animal control facility ($6 million) and the Dawson Bridge rehabilitation ($17.8 million). The city has allocated its share of the fund right through to 2017, when it is scheduled to end.
Despite this significant boost, Edmonton's infrastructure gap is widening. A 2002 report to council identified a $3.2 billion gap for the 10-year period from 2003 to 2012. In 2008, the city commissioned the Canada West Foundation to update the numbers. That study indicated infrastructure needs for the period 2008 – 2018 had ballooned to $27.6 billion. With only $8.3 billion in dedicated funding available, the city faces a $19.2 billion gap.
Conrad Siu from the city's office of infrastructure advises that updated figures for the next 10-year period are currently being worked on by the budget office. He estimates they will be available in about a month.

Fifteen days following Rosen's May presentation, the mayor ushered councillors into a closed-door meeting where a vote was carried by an 8-5 margin to proceed with the downtown arena project, despite the fact that a number of pieces of the funding puzzle remained missing. The Edmonton Journal's business editor Gary Lamphier, a declared supporter of the arena project, speculated at the time that the vote was rushed in order to take advantage of a "lame-duck premier" nearing the end of his official term. "The justification for bringing this [motion] with no advance notification and no written report was hinged completely on the imminent departure of the premier," Councillor Linda Sloan told Lamphier in an interview following the vote. She said this was made perfectly clear to council in the private session.
Last month, following a meeting between Mandel and Stelmach, the premier told assembled media that the province was looking at allowing the city to use MSI funds for the project. Up until that point, Stelmach was adamant that no provincial dollars would go directly to fund the arena. He is hoping to be able to boost the fund province-wide and says that if Edmonton's city council chooses to use any additional money to build an arena, that's its prerogative.
But with crumbling infrastructure around the city, citizens have little appetite for funding the dreams of a billionaire hockey team owner, says Lorne Humphreys. Humphreys is the president of Speak Up Edmonton, a citizens' group opposed to the proposed development.
Humphreys notes that during last fall's election campaign, issues related to infrastructure were front and centre in every ward, with little to no public groundswell in favour of using public funds to build a downtown arena. He acknowledges Mayor Mandel's commitment to the project was clear, but doesn't believe he has any mandate to divert these funds.
"Infrastructure is widely understood as being those things that contribute to the broader public good," says Humphreys, noting that a privately-controlled arena doesn't fit the definition. "If money keeps getting diverted to areas that have nothing to do with infrastructure, obviously that gap is going to widen even further."
The city has a long list of needs. More than 40 new neighbourhoods, all of which need infrastructure and services, are approved with some already under construction. Twenty-two new overpasses will be needed in Edmonton over the next 30 years, according to a city report on July 23, and the city hopes to continue spending about $100 million per year on the Neighbourhood Renewal Program, which plans to replace roads, sidewalks and curbs and gutters in 29 neighbourhoods from 2011 to 2018.
That program is funded through a combination of property taxes, provincial funding through the Alberta Municipal Infrastructure Program (AMIP) and MSIfund, and cost sharing with property owners. Councillor Don Iveson told local media last week that if the city comes into increased MSI money, he would prefer to see it spent on accelerating neighbourhood renewal. Humphreys agrees.
The province has said it will analyze its first quarter fiscal results before making any further announcements about MSI funding, not likely before late August.

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