St. Albert city council has taken the first steps to approve a $600,000 increase to the City’s loan guarantee backing a regional transit organization.
The City received a request from the Edmonton Metropolitan Transit Services Commission (EMTSC) to increase its existing loan guarantee from $1.7 million to a maximum of $2.37 million. The commission aims to regionalize transit service for eight municipalities within the Edmonton metropolitan region by the start of 2023.
St. Albert council formerly approved the original guarantee — which amounted to 34 per cent of the commission’s total loan — in June 2021. Edmonton guaranteed the remainder of the loan, which is planned for return through the commission’s operating revenues over three to five years after the commission begins operations.
Edmonton city council has received a request to guarantee an additional $1.33 million for the commission to meet its funding requirements, which Coun. Wes Brodhead — EMTSC board chair — said during an April 19 St. Albert city council meeting have increased because a service planning update is required due to COVID-19.
“Service that was in existence before COVID-19 is not in existence today, so you have to change the implementation plan … the actual tactical planning,” Brodhead said, adding this includes information about bus routes and frequency.
Trevor Duley, St. Albert’s manager of government relations, told council’s community growth and infrastructure standing committee April 11 that the transit commission predicts its previous line of credit — $5 million — will be fully drawn by the end of June 2022, leading them to request an additional $2 million.
Paul Jankowski, the transit commission's CEO, said in a letter to St. Albert city council that the decision to increase the amount of debt was based on a desire to defer calling on member municipalities to contribute funding until operations begin.
Jankowski said deferring official funding requests would “eliminate additional pressures on municipal budgets in 2022.”
During the committee meeting, Coun. Mike Killick asked Jankowski why the commission is continuing to ask St. Albert and Edmonton for additional loan guarantees, rather than asking other municipalities to step up to the plate with cash.
“You’ve got to have skin in the game to be really engaged and skin in this case comes down to dollars,” Killick said. “Wouldn’t this be the perfect time to ask those municipalities to pony up?”
Other municipality members of the commission include the Town of Devon, City of Beaumont, City of Fort Saskatchewan, City of Spruce Grove, City of Leduc, and the Town of Stony Plain.
Jankowski said Killick’s question is one the board “wrestled with,” arguing differentiating between the payback of the debt, and the debt guarantees is important.
The ultimate payback of the debt will be shared in appropriate proportions with each member municipality, Jankowski said. Current commission estimates say that 85 per cent of the operating costs will be in support of services in St. Albert and Edmonton.
“The biggest contributors, the biggest players, and the biggest benefactors of the regional service are St. Albert and Edmonton,” Jankowski said.
Brodhead seconded Jankowski at the committee meeting.
“While the guarantees are real, and it’s a line-of-credit guarantee, the encumbrance is borne by all municipalities,” Brodhead said. “With [the Town of] Devon, we’d be asking them to guarantee $3,000 … it just made sense to do it this way.”
Council unanimously approved the first reading of the additional loan guarantee at the April 19 meeting.
Now that the first reading has passed, a petition period will begin. If a petition is mounted, residents have until May 31 to submit a valid petition with signatures of those eligible to vote within St. Albert. The amount of signatures must be equivalent to 10 per cent of St. Albert's population.
If no petition arises, council will proceed with the second and third readings of the bylaw.
