Province denying Ponoka funding, further action being touted

MSI and other funding sources now gone until town rescinds motion to withhold property tax money

The provincial government has finally responded to Ponoka’s threat to hold back the education portion of property taxes until it gets money for a fieldhouse.

In a letter sent Jan. 10 from Municipal Affairs Minister Shaye Anderson, Mayor Rick Bonnett and council were informed that grants are now being held back from Ponoka until the motion made in November is reversed. The letter is part of the agenda for council’s meeting tonight at 6 p.m.

RELATED: Ponoka council approves holding back tax money from province

“While the motion remains in force, pursuant to Section 175 of the School Act, l am providing notice that the Government of Alberta will withhold grant payments under programs that the Town of Ponoka is eligible for,” the letter outlines.

“Your council is strongly advised to take action to immediately rescind the recent motion to withhold the town’s education property tax requisitions. If this unacceptable situation continues, the province will consider any and all other remedies available to ensure that education property tax funding is received.”

The letter also points out that the province will not be changing its funding model regarding Municipal Sustainability Initiative (MSI) funds for projects like the one Ponoka has put forward.

“As you have been made aware, municipal projects under the Culture, Community, and Recreation component cannot be prioritized and forwarded for federal consideration unless a commitment to use MSI as the required provincial cost share amount has been made,” the letter adds.

“Given your decision to not make the commitment to use MSI, the Town’s project has not moved forward for federal consideration. As such, there is no federal funding set aside or available to be released for your fieldhouse project.”

It goes on to say that the province can reduce grants if a municipality defaults on these payments and any overdue amounts will be charged at the prime interest rate plus five per cent.

Capital funding denied

With that said, the town found out last October — a full month before council passed the motion to withhold the payments though the idea had already been floated — that it had been denied a request for about $1.765 million in MSI capital funding to pay for interior improvements needed to new Civic Centre building.

The reason stated by Alberta Municipal Affairs was the asset (building) must be owned by either a municipality, non-profit organization, regional services commission, a controlled corporation or a provincial agency to eligible under the program and not a private corporation.

At tonight’s meeting, council is being presented with a few options including using unrestricted reserves, issuing short-term debentures, a combination of both or exercising a clause in the lease to purchase the building.

Administration is recommending the money come from reserves — unrestricted operation and capital — that current sit around $4.9 million.

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