Cold Lake threatens to dissolve itself; Cash-strapped city challenges Alberta’s biggest ‘taboo’
Mon Jan 18 2010
Byline: Trish Audette
Source: Edmonton Journal
Step into a coffee shop in Cold Lake, and you’ll get a report card on the city mayor who is trying to reshape how Alberta’s smallest governments share their stakes in big oil.
“The mayor and the council, they don’t seem to run the city like a business,” shoe store owner Sandra Jensen says.
Millions of dollars in debt, with a handful of projects on the to-do list — including a new arena — Cold Lake cried broke last year, throwing down the gauntlet and potentially creating a giant headache for Premier Ed Stelmach’s government.
Cold Lake Mayor Craig Copeland says oil development in the surrounding county has drawn more traffic to his 13,000-person city, a retail hub of northeastern Alberta. He wants a piece of the Municipal District of Bonnyville’s oil money, and a new formula for urban-rural equalization to cover growing pressure on his city’s roads, sewage system and recreational facilities.
Should the province decline to introduce a revenue-sharing formula — an Alberta “taboo,” Copeland acknowledges — Cold Lake council wants the city dissolved altogether and folded into the municipal district.
“I think a lot of people are onside with the mayor,” real-estate agent Dawna-Lee Clark says over coffee with Jensen.
Later this month, a province-appointed reviewer is expected to finish his examination of the city’s books and practices. Former Alberta Urban Municipalities Association president George Cuff will report to the minister of municipal affairs. His findings will influence the minister’s ruling on Cold Lake’s request to disappear.
“I’ll be surprised,” if the provincial government finds a city working well, Jensen says.
At the same time, she adds, “I suppose they’ll have to step in at some point and give both parties a shake. But then why isn’t it more fair provincewide?”
This is the question Copeland hopes will capture attention across Alberta.
From north to south, he argues, there is a growing gap between the cash municipal districts collect from industrial development and the money cities and towns draw from fewer sources, primarily taxpayers.
Last fall, Cold Lake’s city council brought forward a 5.5-per-cent tax increase and cut $1 million from its $24-million budget.
“The best option would be to create the new municipality of Cold Lake,” Copeland says. “And the other option, if that can’t be done, is at least 25 per cent of the taxes from industry need to flow to Cold Lake.”
The current president of the Alberta Urban Municipalities Association calls Cold Lake the “test case” for reevaluating the gap between cities and counties.
“Cold Lake is just kind of the surface of it,” Darren Alduous says.
“When it comes right down to a solution, we’ve found the province is hesitant to put down the hammer.”
Hector Goudreau took over the municipal affairs portfolio last week. But former minister Ray Danyluk said Cold Lake’s request for dissolution didn’t worry him, as he had no indication other cities were eyeing similar plans.
Danyluk expected Cuff to take a hard look at Cold Lake’s sustainability, including its revenue streams and how council and city management operate.
Cuff, who started the job in November, says he has heard complaints like Cold Lake’s before. He plans to show the minister how Cold Lake works compared with other communities, but he has no plans — or authority — to rewrite provincial policy.
Most counties and cities work out cost-sharing agreements, not revenue-sharing agreements.
In such arrangements, municipal districts pass over a certain amount of cash to cover the costs of services rural people access when they go into the city.
After last year’s round of province-ordered mediation, the Municipal District of Bonnyville offered Cold Lake about $1 million. The city said no.
Cold Lake Coun. Hubert Rodden says the provincial government’s resistance to playing Robin Hood comes down to politics.
“It’s rife with danger for the province to start talking about revenue sharing,” he says. “If they irritate their (rural) base, we may see a seismic shift in this province. That’s Wildrose (Alliance party) country.”
Municipal District of Bonnyville Reeve Ed Rondeau says revenue sharing is simply not a road his community is willing to take.
“If revenue sharing is to come out as something that the province decides needs to be done, then they better decide to do it to the entire province, not to just one municipality,” Rondeau says.
But if Copeland calls revenue sharing asking for a “helping hand,” a former Cold Lake councillor compares it to coveting thy neighbour’s wife.
“Your neighbour’s wife just looks so much better than yours, why don’t you go after her?” says Ron Young. “There’s no doubt that the MD is getting a windfall, but that doesn’t mean we deserve a windfall.”
Young was first elected to Grand Centre’s council in 1981, then sat on Cold Lake’s council until 2004 after the cities amalgamated in the 1990s.
He suggests Cold Lake has been on a “spending binge” for years, with no sense of the fallout.
But, “if (Cold Lake) were successful, this would start a domino effect of municipalities across the province,” Young says.
And the lingering question, he says, may well be where to draw lines on the map to separate Alberta’s winners and its losers.