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Discrepancies in the Municipal Sustainability Initiative funding cuts between counties and municipalities have some town councils questioning the provincial government’s motives.

The Town of Innisfail recently conducted a study looking at MSI funding cuts in municipalities, such as Blackfalds, Carstairs, Didsbury, Olds, Ponoka, Red Deer. In total, 12 municipalities were looked at. The study also looked at cuts, or the lack of, for area counties, such as Clearwater County, Mountain View County, Red Deer County and three others.

The study found that while municipalities had their MSI funding cut by as much as 32 per cent, counties saw an increase in their funding – in fact, three of the six counties saw increases over 10 per cent.

Based on this study, Innisfail town manager Dale Mather said the government "appears to favour one over the other, but it’s nothing that the rural municipalities have done – it’s the way the funding formula works."

Mather said the municipalities and counties work together and they have been trying to develop a good working relationship with each other. But, "the cuts do have an affect on our budget. We will have to delay or cancel some projects," Mather said. "Budgeting is always a struggle as it is."

Roy Brown, chief financial officer for the Town of Didsbury, said municipalities lost hundreds of thousands in MSI funding this year while counties gained and he wants to know why.

"I know funding is based on a formula but what doesn’t make sense is that counties are getting so much more than municipalities. It’s very peculiar," Brown said.

This year, the Town of Didsbury was supposed to get its first full installment of MSI – about $1.35 million – as part of a 10-year consistent funding agreement. Instead, the municipality received $926,859 from government, as the province dealt with its own budget pressures.

The latest MSI contribution was also supposed to cover the loss of the Alberta Municipal Infrastructure Program (AMIP), which ended this year for all municipalities and counties – but now does barely that.

A funding shortfall and the absence of AMIP has put the municipality at a 21.64 per cent loss over 2009.

The impact has already been felt by the town, which fired five employees and suggested a 3.5 per cent tax increase. Council also agreed at its Feb. 22 budget meeting that fewer dollars would be spent on road construction and facility planning in 2010 than in years past.

The news has Didsbury councillors demanding an explanation. They are planning to bring up the gaps between county and town funding at an MLA roundtable, April.16.

"As our funding goes down, the counties’ goes up. Yes times are tough, but we still want to be treated fairly," Brown said.

Red Deer Mayor Morris Flewwelling, which saw 28 per cent less MSI funds this year, isn’t keen on the distribution, "but it’s a fact of life and we have to move on in these difficult times," he said.

"I think we were given some rationale on why this was going to happen and whether we like it or not, at least it’s based on rationale."

But Mayor Ken Graham of Innisfail said he wonders if the rationale is the problem. The province distributes MSI based on things like kilometres of roads and population and it seems to favour counties.

"We looked at six counties and 12 municipalities … maybe this is just an anomaly. But maybe it’s not," he said.

Municipal Affairs minister Hector Goudreau and MLA Richard Marz don’t see what the fuss is about.

Municipalities got more MSI funding than they did in 2009 and with construction costs down this year, towns will be able to do more for less, Goudreau said.

As for gaps between county and town funds – "the fact remains that urban municipalities are not the same as rurals in their responsibilities … [counties] look after 85-90 per cent of the roads, 80 per cent of bridges and all those things towns don’t have to deal with," he said.

Marz agreed and said he believes perhaps towns are "misunderstanding" the numbers.

"I’d be happy to meet and talk to them about it," he said.

The Town of Innisfail lost a total of $653,343 in grant money for the 2010/2011 budget year, between MSI, AMIP and other granting programs.

Funding breakdown - MSI capital and operating grants and AMIP between 2009 and 2010: