Dennis Egert, corporate services commissioner for the City of Medicine Hat on Thursday following his fiscal update to the chamber of commerce. (CHAT News photo)

By Alex McCuaig

Strings attached

City to receive $7.5 million in provincial stimulus funds

Aug 27, 2020 | 4:43 PM

MEDICINE HAT, AB – Alberta’s economic outlook might be disastrous but there was some good news for the city’s finances with $7.5 million expected from the provincial municipal stimulus grant program launched in response to the COVID-19 pandemic.

But those funds will come with strings attached, the city’s corporate services commissioner said during a fiscal update to the chamber of commerce on Thursday.

Dennis Egert told the chamber the money will require to be used to encourage economic growth, reduce red tape and, “this is money that needs to be spent in 2020 or 2021 – so very quick. These are projects that can not increase operating costs or increase property taxes. So, there is a bit of constraint in that area.”

Premier Jason Kenney hinted at those conditions during Tuesday’s cabinet shuffle announcing new municipal affairs minister Tracy Allard, saying, “it is critical that municipal governments stop raising taxes, stop adding red tape that inhibits job creation.”

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Regarding the city’s overall fiscal update, Egert outlined to the chamber the state of the city’s struggling oil and gas assets and plans to abandon 2,000 wells through a $125-million reclamation program that will be paid for by taking on $80 million in debt and $45 million from cash reserves.

“We were experiencing annual cash losses that are not sustainable,” said Egert. “We did not see a price recovery in sight and that business has determined is not viable in the majority of our locations.”

Egert told CHAT News Today the city is committed to continue to find cost savings through its Financially Fit program and is seeking opportunities to reduce costs.

“We’re looking at opportunities that presents itself in this COVID environment,” said Egert. “Things that weren’t as palatable or opportunities that didn`t exist in the past that with COVID-19 and the situation that we are in may be opportunities for us.”

The city will be presenting its second tri-annual financial report covering May to August at some point in the fall.