Above: Municipal Affairs dashboard of financial indicators for Morinville for the year 2023 from the Municipal Affairs website.
by MorinvilleNews.com Staff
In the 2023 calendar year, the Town of Morinville spent 83 cents on new infrastructure for every $1 of old infrastructure deemed depreciated. This shortfall in spending has prompted the Government of Alberta to ask why.
On July 26, Municipal Information Services contacted Chief Administrative Officer Naleen Narayan to inform him of the situation and to request feedback on why Morinville failed to meet benchmark indicators.
Although the Municipal Dashboard for Morinville shows no audit outcome concern or no Ministry intervention, Morinville did get a redline in 2023 for asset depreciation shortfall. Over the previous two years, the Municipality spent $1.46/$1.00 and $1.52/$1.00, respectively.
Why the infrastrucure deficit in Morinville
Morinville’s Acting CAO Michelle Hay told MorinvilleNews.com that municipal indicators are generally used by the Government of Alberta for two purposes: measuring the Ministry of Municipal Affairs’ performance on supporting sustainable and well-governed municipalities in Alberta and proactively identifying and reviewing municipal financial and governance concerns before they become viability issues for those communities.
“[The] Investment in Infrastructure indicator is triggered when a municipality has capital spending less than annual amortization,” Hay explained, adding amortization recognizes tangible capital assets (water/sewer pipes, roads, and municipal buildings) used up in a given year. “It essentially is set as a minimum standard for infrastructure investment in a community, with the indicator being calculated on a rolling 5-year average. The Government’s expectations of the Town are that the indicator is recognized and that an explanation is provided and/or a plan is developed to address triggering the indicator.”
In addressing the 2023 shortfall as well as Morinville’s ongoing need to fund asset depreciation, Hay said Town Council had implemented a 10-year Long-term Capital Plan, supported by a 5-year Long-term Operational Plan, initiatives she said “significantly increases investment in Town infrastructure” while addresses key infrastructure issues from the infrastructure master plan.
“This level of investment will outpace amortization as early as 2026,” she said. “That said, as this indicator is a rolling average, it is likely the Town will continue to trigger this indicator for some time until we’re well into the new Capital Plan, which started in 2024, and the investments made increase the five-year average.”
Municipal Indicators were introduced in 2016—before the construction of the Morinville Leisure Centre (MLC).
“With the significant investment in the MLC, several things related to this indicator occurred,” Hay said. “First, the five-year average that included MLC construction included a very large capital asset addition, causing the rolling average of investment to far outpace amortization, and, therefore, the indicator was not triggered,” she said. “The second impact is that with the addition of the MLC, the annual amortization amount also increased significantly due to the amortization of that building, meaning the level of infrastructure investment required to stay above the indicator is now much higher after the introduction of the MLC than before.”
Additionally, Hay explained the 2023 reporting year is the first 5-year rolling average period that does not include MLC investment but does include MLC amortization.
“Infrastructure investment in 2020 [to] 2022 declined due to the impacts of the pandemic, reduced provincial grant funding and the lack of municipal reserves,” Hay said. “This, coupled with the higher level of amortization now being reported, resulted in the Town not meeting the investment in infrastructure baseline.”
While Morinville was the only community in the Sturgeon County region to trip the infrastructure spending deficit in 2023, it was not the only community to trip indicators. The Town of Gibbons received red marks in 2023 for not filing its submission and in 2022 for filing late, having an accumulated $436,000 deficit and a .26/1 ratio of assets to liabilities.
