Grants and earnings on investments help the City offset the cost of providing services and building City infrastructure, like roads and water pipes.
The City receives approximately $4 million per year in operational grants to fund operational needs, such as emergency services, transit and road maintenance. Additional capital grants, including Municipal Sustainability Initiative funding from the province, are typically directed toward capital projects.
Major grant programs include the following:
- Municipal Sustainability Initiative: $10.7 million
- Federal gas tax: $3.6 million
- Basic capital grant: $3.8 million
The City is examining how we can better access grants provided by the provincial and federal levels of government for use in our community.
A 2016 City value for money audit focused on grant administration and utilization, exploring the City's administrative approaches to identify, apply, pursue, and secure grant opportunities. Grant programs are continually changing and significant funds are allocated by other levels of governments. We want to ensure we are doing all we can to secure grants available to fund City projects.
We are also examining how we can increase our return on investments, including working capital holdings. The enhanced revenues will help fill our operational funding gap.
In December 2015, Municipal Affairs included City of Medicine Hat as the third city in Alberta to be included in the Major Cities Investment Regulation, which allows the municipalities enhanced flexibility and independence to invest the money in their financial reserves. Edmonton and Calgary are also included.
An Investment Advisory Panel, with representation from the community, has been established to assist the City of in fulfilling its responsibilities in the management of equity investments as defined in the Equity Investment Policy #0157.
The City has engaged Alberta Investment Management Corporation (AIMCo) to manage the City’s long-term treasury investments. The City began the transfer of $132 million to AIMCo over a 12-month period beginning in February 2017, which will be invested in accordance with the Equity Investment Policy and within the authority granted by the Major Cities Investment Regulation.