Viability. What is it?

February 4, 2017

Viability? What is it, and how do you get the answers that prove viability? 

 

I'm writing this article to try and bring some clarity about what Municipal Viability is, the recent process Council considered with regard to viability, to give you some facts regarding the viability of the Town of Sundre, and to tell you what we have for plans to review and address future viability concerns and issues. 

 

Alberta Municipal Affairs wants every one of the over 300 municipalities in Alberta to be both sustainable and viable. They offer a Self-Assessment Questionnaire that can be used as a tool for any municipality to examine viability, what they do well, and what areas might need some improvement. There are 8 sections of the questionnaire designed to examine:

 

1 . Sustainable Governance (19 questions),

2. Operational and Administrative Capacity (8 questions),

3. Financial Stability (the big one with 33 questions),

4. Service Delivery (2 questions),

5. Regional Co-Operation (5 questions),

6. Infrastructure (6 questions),

7. Community Well-Being (14 questions), and

8. Risk Management (9 questions). The questionnaire is initially filled out by the Chief Administrative Officer (CAO) of the town and brought before Council for discussion, and planning for improvements.

 

There are 3 ways a viability review can be initiated:

 

1. By Council,

2. By residents through a petition, or

3. By Alberta Municipal Affairs if they see there are problems. In Sundre, there hasn't been a petition from residents & Municipal Affairs has no concerns that they have ever brought forward to any Council that I am aware of. I'm aware of one previous Council that did an internal viability review with some assistance from Municipal Affairs.

 

Councillor Thompson brought forward a "Notice of Motion" to Council January 16th requesting a viability review. Council procedures dictate that you cannot speak to a Notice of Motion when you present it, although you can talk about it to anyone after the Council meeting. The reason you don't get to speak to why you present the motion is to allow Councillors time to read the accompanying documentation you might provide prior to the discussion at the next Council meeting. 

 

Anyone who took the time to talk with Councillor Thompson would have learned that he believes we are a viable community. His reason for presenting the Notice of Motion was to generate a discussion to provide answers to the public when they ask questions about whether we are sustainable in the current economic climate, whether we can afford to repair and replace our aging infrastructure, and whether we are financially viable for the future.

 

Council considered and discussed the Notice of Motion at our January 23rd Workshop, and we got the chance to hear from a number of community residents about the issue of viability. Councillor Thompson withdrew his motion at the January 30th Council meeting. Every Councillor stated categorically that we believe we are viable and sustainable. There was some interest in using the Self-Assessment Questionnaire from Municipal Affairs for an internal review to set future improvement goals, based on the answers to the questionnaire. 

 

Because financial stability is the single biggest part of the question about viability, I will concentrate on some numbers, but not all the financial number picture. Some facts about our financial viability that came out during the discussion were:

  • From 2013 - 2015, according to the Alberta Government Finance and Debt Limit Profile for the Town of Sundre, our total financial assets increased by 18% from $6,049,761 in 2013 to $7,160,283 in 2015,

  • Our total liabilities decreased by 14.8% in that same time period from to $5,948,183,

  • Our accumulated surplus, in that same time period has seen an

  • 8.8% increase from to $41 ,981 ,603

  • Our debt limit (our ability to borrow) has grown, because of our growth in assessment in that time period, but our actual debt has decreased by 20% because we are paying down debt in anticipation of having to borrow in the future for some planned projects, 

  • In 2015, we owed 31% of our maximum debt limit, meaning we could borrow just over $9 million if we had to. At this time, there is no foreseeable need in the future to ever take this type of action as that would bring up the question of financial viability.

 

Some more facts from the Cash Statement received at the January 30th Council meeting:

  • We do not borrow money for our Operational Budget and we have sufficient cash flow to cover operations, plus we have $500,000 in Cashable GIC's for any emergent issue that might come up, We have reserves of just over $5 million put away to pay for upcoming planned projects in multiple dedicated reserve accounts,

  • We have an additional $1,114,849 in grant reserves that will also be used for planned projects to minimize future debenture borrowing,

  • Our debenture debt in 2010 was approximately $5.7 million and in 2016 it is $3.7 million - ratepayers and Councils have been aggressively paying down debt by 35% in 6 years,

  • In 2010, reserves were $1.717 million and on the December 31, 2016 cash statement, Town reserves are $5,126,203. Ratepayers and Councils have been putting money away to pay cash for projects like 10th Street that was completed in 2016 without debenture borrowing. 

We have planned for projects in our future because, for the first time since the 1950's, we have a 5 Year Capital Plan adopted, with priorities laid out through multiple Councils, with reserves, grants and borrowing plans that keep us sustainable and viable. We have our second two year budget, and the next Council will b moving to a three year budget as the new Municipal Government Act will require every municipality to do more future planning. We put over $1 million into reserves in 2015. In our future we are trying to "pay as we go" for as many projects as possible so we don't take on debt.

 

All this financial detail makes most of us nod off, and I am really only highlighting some of the financial "good news story", but some recent housing statistics from the Calgary Real Estate Board show strong growth and confidence in the Sundre housing market. Average home sale price in 2016 is up 14%, total sales up by 35% and average days on the market down by 58%. Please check out the five year statistics for more information.

 

What does all this mean? We are viable, sustainable and flourishing. We found that out because someone asked a question. We all thought we were viable, and now we have some facts, and many indicators, to prove it - and we still have some work to do to improve. Our goal must be continuous improvement in our service delivery, our efficiency, and what we charge our ratepayers.

 

What will Council be doing with the issue of viability now? We will be discussing next steps and how we might improve. Stay tuned in the next month for that decision. 

 

The Town of Sundre is incredibly viable, and we have exceptionally strong evidence proving that fact.

 

As always, I invite you to call me at 403-559-7352 if you have questions, concerns or suggestions about this, or any other topic.

 

Terry Leslie,

Mayor Town of Sundre

 

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