+ RMA Rural Municipalities
of Alberta

Resolution 1-13F

Basic Infrastructure Funding as a Result of Dissolution

October 3, 2013
Expiry Date:
December 1, 2016
Active Status:
Camrose County
5 - Edmonton East
Municipal Governance and Finances
Intent Not Met
Vote Results:

WHEREAS the decisions taken by the Provincial Government may have significant financial impacts on local municipal governments; and

WHEREAS orderly, efficient and economic governance requires long range financial planning; and

WHEREAS basic necessity of life water and wastewater infrastructure in most smaller urban municipalities is reaching its life capacity and must be replaced; and

WHEREAS efficient, well-constructed and maintained water and wastewater infrastructure is critical to public safety and an integral part of a healthy and growing local economy; and

WHEREAS the dissolution of an urban municipality places an unfair financial burden on the receiving municipality; and

WHEREAS the funding allotment of the operating portion of the Municipal Sustainability Initiative (MSI) is being reallocated to the Regional Collaboration Grant Program; and 

WHEREAS part of the Capital-funding portion of the Municipal Sustainability Initiative (MSI), municipalities are required to draft a long-term capital plan and priorities;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge Alberta Municipal Affairs to include and cover the costs of a Final Audited Financial Statement and also an Engineering Study to determine the status of water and wastewater infrastructure, which is basic necessity of life, as part of the new Viability Study under the Dissolution Process and in order that a budget be formulated for the receiving municipality; and

FURTHER BE IT RESOLVED that any effective date for a dissolution of an urban municipality into a receiving municipality be January 1 of the coming year following the Order in Council; and

FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties initiate dialogue with Alberta Municipal Affairs, Alberta Transportation and Alberta Environment and Sustainable Resource Development to ensure that a funding model is implemented to cover the repair or replacement of water and wastewater infrastructure, which is a basic necessity of life, as identified in the Engineering Study, for receiving municipalities as a result of the dissolution process.  

Member Background:

Effective November 1, 2012 the Village of New Norway (population 283 – 138 dwellings) was dissolved and incorporated as a hamlet within Camrose County.    The November 1, 2013 date imposed on Camrose County had the following negative impacts:

  • The day to day operations from November 1 to December 31 meant extra staff time and operational costs to the county to work through outstanding issues from the “village”.
  • Slight drop in County service delivery to County ratepayers because more time was spent on New Norway financial and operational outstanding issues.
  • No backup financial reporting – Camrose County had to write off most of the Accounts Receivable accounts because there was no backup information to support resident claims that invoices were being paid.
  • No Provincial or Federal grant reporting made it very difficult to determine at what stages projects that were funded by grants and other funding sources were at.

A dissolution date of January 1, an audited Financial Statement completed by Municipal Affairs, a completed “Statement of Expenditures” for each Village, Provincial and Federal Grant would be a great assistance to the receiving municipality for a smooth transition 

New Norway Infrastructure Review – ISL Engineering Ltd 

The dissolution component of the Regional Collaboration Grant Program allocates a total of $50,000 for the receiving municipality as a result of the dissolution. This is all the municipality receives from the provincial government as a result of the dissolution. Camrose County retained ISL Engineering for a cost of $48,000 to conduct this review of the basic necessity of life water and wastewater existing infrastructure. A summary of the Infrastructure Review and budget prepared by ISL Engineering dated March 28, 2013 was as follows: 

  • Water reservoir – the existing tower is not fit for service due to its deteriorating physical condition and the County would need to look at replacing the existing water tower with a new underground water reservoir and pumphouse 
  • Water distribution system – Existing distribution system cannot meet existing standards, therefore the system be upgraded to meet current standards and provide looping 
  • Wastewater collection and treatment  – An inspection of the wastewater system was done just prior to dissolution by Alberta Environment and Sustainable Resource Development which identified a number of deficiencies that are to be addressed, including de-sludging, rehabilitation of lagoon berms, disposal of excavated sludge material, fence repairs, lagoon signage. The sludge in the anaerobic and facultative cells be removed and normal operating flow condition restored to the anaerobic cells. The need for repair and protection of the banks of the lagoon to prevent further deterioration.  Implement a monitoring program and possibly a receiving watercourse assessment required by CCME guidelines.  Establish effluent discharge limits based on receiving watercourse assessment 

Budget estimates to bring these deficiencies to an acceptable, basic, public safe standard are $3,588,000 for the water reservoir and distribution system and $2,035,500 for the wastewater treatment system for a total of $5,623,500.  This would result in a single family fire flow. Since the time of the review, Camrose County has also experienced breaks in the waterline, so the costs could be greater. Land uses in New Norway include single family residential, commercial and institutional.   To include all residents, commercial and institutional, the water distribution system must be brought to the higher institutional standard would be $6,831,000 for a total cost including wastewater of $8,866,500.

With a budget of over $8.8M, a Local Improvement Tax or a Special Tax to pay for these required upgrades is not feasible or sustainable for this community. Camrose County has been working with the Province of Alberta on the “direction” for repair and replacement of basic water and wastewater infrastructure in the hamlet of New Norway.  In summary, the Province will have no additional money for New Norway. The provincial government’s position is that if the water and wastewater replacement in New Norway is a priority of Camrose County, the county’s Long Term Capital Plan under the Municipal Sustainability Initiative (MSI) Program and the Federal Gas Tax can be changed to accommodate the New Norway Infrastructure, at the expense of other projects that have been communicated and expected by the residents of Camrose County.

During our discussions with the Province it was also noted that the Alberta Municipal Water Wastewater Partnership is not eligible for a funding source because the infrastructure in New Norway is existing, and this would be considered as maintenance.

In conclusion, as a result of the November 1, 2012 dissolution, Camrose County is now looking at a additional $8.8M to bring the water and wastewater infrastructure in New Norway to a basic, acceptable standard, which prior to dissolution was outside Camrose County’s jurisdiction.  This is going to be a major issue for all rural municipalities, the basic infrastructure in these urban centers is reaching its current lifespan and is in need of replacing. Camrose County understands that there are a number of smaller urban municipalities currently pursuing or are in the planning stages of a Provincial Viability Study as part of the dissolution process.

RMA Background:

The AAMDC has no active resolutions directly related to this issue.

Government Response:

Municipal Affairs:

The Government of Alberta (GOA) recognizes the importance of access to clean water, and it is strongly committed to investing in municipal infrastructure through grant programs, such as the Municipal Sustainability Initiative (MSI), which is the province’s key initiative to strengthen the municipal sector and support infrastructure needs.

All municipalities receive annual MSI program funding according to a formula that includes base funding for each municipality, as well as allocations based on population, education tax requisitions and kilometres of local road.  The former Village of New Norway received MSI funding allocations up to the time of its dissolution in 2012, and at the time of dissolution, any unexpended funding allocated to the village was transferred to Camrose County.  In accordance with the program guidelines, in addition to its own annual allocation, the county will receive an MSI allocation equivalent to what the village would have received, had it not dissolved, for five years following the restructuring.  This provision for restructured municipalities was made so the receiving municipality would not be negatively affected by the restructuring for a defined period.

A broad range of projects are eligible under the MSI capital program, including roads, bridges, water and wastewater systems, and municipal facilities.  It is up to the duly elected councils of each municipality to consider its priorities when deciding which eligible projects to pursue.  To support long-term municipal planning and priority setting, the MSI program has been structured to be flexible by enabling municipalities to commit up to 75 per cent of future years’ funding to projects, and allowing bridge financing as an eligible expense.

The GOA will continue to work with municipalities and the federal government to ensure that local governments receive adequate funding to address their ongoing capital requirements.  However, the responsibility for determining local priorities and for determining how those priorities will be funded remains with the municipality.

Funding is also available under the new Alberta Community Partnership (ACP) program, formerly the Regional Collaboration Program (RCP).  The RCP provided support up to $50,000 of the costs associated with municipal restructuring, either through an amalgamation or dissolution.  Eligible restructuring expenses within this component of the RCP included transitional costs, such as infrastructure audits and electoral boundary reviews. Camrose County received an RCP grant of $50,000 in 2012/13 to determine water and wastewater infrastructure replacement costs in the hamlet of New Norway.

The RCP program budget increased by $20 million in 2013, and the new ACP program budget increases by a further $20 million in 2014.  MSI operating program funding is being realigned with the ACP over the next three years to further encourage municipalities to work collaboratively to achieve their regional priorities.  Details regarding the new program will be provided to municipalities in the new fiscal year.

A dissolution effective date is determined on a case-by-case basis.  In addition to the municipal fiscal cycle, the selection of the date takes other factors into consideration based on the unique circumstances facing the affected municipalities.

Municipal Affairs will continue to work with the Municipal Sustainability Strategy (MSS) Stakeholder Advisory Committee, which includes the Alberta Association of Municipal Districts and Counties, to address the implementation of the MSS and opportunities to further improve the viability review process.


Announced in the Budget 2014 was the Alberta Community Partnership (ACP) program which replaced the Regional Collaboration Program (RCP), and is designed to improve the long-term viability of municipalities by providing support for regional collaboration. Included in the ACP is additional funding for Viability Review Support which includes funding towards an infrastructure audit for a municipality undergoing a viability review, a transitional stream to address immediate resource needs resulting from restructuring, and an infrastructure stream for the receiving municipality or amalgamated municipality, after infrastructure and debt servicing needs are known and prioritized following restructuring. The 2016-17 provincial budget saw a 50% decrease in ACP funding, from $40 million in 2015-16 to $20 million in 2016-17.

With recognition of the important support offered through the ACP, this resolution is assigned a status of Intent Not Met as it does not meet the specific requests of the resolution. The AAMDC will continue to monitor the implementation of the ACP, with a specific focus on its impact on water and wastewater infrastructure. 

Provincial Ministries:
Municipal Affairs
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