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RFD- 4036 Business Items   Item #   11. d.    
Regular Council Meeting Agenda
Meeting Date: 09/14/2020  
Title:    Municipal Stimulus Funding - Recommended Project - Boje
Department: Corporate Services  
Strategic Vision Element: Where People Choose to Grow a Business - A strong, diversified regional business centre Related Goal: Spruce Grove has a business environment that attracts new businesses to the city, encourages and supports new business start-ups, and helps ensure existing businesses are competitive, successful and profitable.

Request for Decision Summary
The City of Spruce Grove may make an application to the Alberta Government to access their Municipal Capital Stimulus Program funding to implement the Broadband Strategy in the industrial and commercial areas of the City.  

Proposed Motion
That Council request administration to submit the Broadband Strategy capital project to be funded through the Municipal Capital Stimulus Program.

That Council, upon confirmation that the Broadband Strategy capital project is funded by the Municipal Capital Stimulus Program for $4,251,472, approve $550,000.00 be allocated from available Municipal Sustainability Initiative (MSI) funding to complete the construction of the project.

In response to the Minister of Municipal Affairs request to all Municipal Councils, the Mayor of Spruce Grove wrote to the Alberta Government on April 28th to advocate and outline how the City of Spruce Grove would utilize capital stimulus funding if such funding were to be made available (attachment one).  
At the time of that letter being sent, City administration was under the understanding that any stimulus funding that might be forthcoming would need to be expended in the 2020 calendar year.  This perceived requirement influenced some of those projects put forward.

In that letter, the Mayor outlined four (4) different proposals that City could undertake depending on the criteria and grant requirements that could be part of the municipal stimulus capital program.  
On July 28th, the Alberta Government announced the components of the Municipal Capital Stimulus Program as part of Alberta’s Recovery Plan.  The program has two components: operational and capital stimulus grant funding.  At the time of writing this RFD, the finalized makeup of the operational stimulus grant funding was still being confirmed by the various levels of governments (there had been some verbal messaging regarding certain aspects, but nothing in writing).  The City of Spruce Grove may apply to access up to $4,251,472 in capital stimulus funding within the following broad criteria:
Applications must be received by the Alberta Government by October 1, 2020
Projects must commence construction by December 31, 2021, with municipal stimulus funds having been spent by then as well and must not result in municipal tax increases.  
Projects will be evaluated based on the ability to support local jobs and stimulate the economy – both through construction and over the life of the asset.
Municipalities must commit to further supporting growth in the municipality by reducing red tape and providing a report to the Province of such efforts.
As outlined in attachment one, the Mayor, on behalf of the City of Spruce Grove put forward four different capital projects.
1. Fibre Optic (Broadband Strategy) Infrastructure:  As outlined in attachment one, there is substantive need for this capital project to be built.   This project was on the books for the 2021-23 Corporate Plan and the strategy itself was reviewed by the Committee of the Whole in June of 2019.  The cost of this project is split into two streams: the broadband component in the City ($4.8 million) and the fibre ring for the City Buildings ($1.9 million).  Given the funding envelope that may be available to the City, it is recommended that the broadband portion of the project be commenced and that the additional $550K required be sourced from the City’s available Municipal Sustainability Initiative (MSI) funding.
2. Road Surfacing: Highway 16A was put forward for resurfacing as it is a high demand transportation corridor, but also because at the time of application (April) it was seen as a project that could be completed by end of 2020.  During the 2020-21 road works season, the City is forecasting to have spent $2.3 million on Highway 16A road surfacing (>25% of the requested funding in attachment one).  Given that 16A road surfacing is captured in the City’s Capital Planning Lifecycle efforts, while an immediate benefit may be realized to the municipality in terms of road surface quality, the longer term economic benefit may not be as strong as the broadband project.
3. New Snow Storage Facility: As outlined in attachment one, there are various reasons why the City put forward the Snow Storage Facility.  While an important investment for the municipality, the Broadband Strategy is seen as a longer-term economic driver for the industrial and commercial aspects of the City.  Furthermore, the dollar value of the Snow Storage Facility would not consume the value of the possible funds available to the City if successful in the submission.
4. Industrial Storm Implementation: This project would complete the remaining finishing work required in the industrial storm area and mitigate some of the drainage challenges facing industrial clients in the city.  Similarly, to the Snow Storage Facility, this project has some long-term value proposition, but not to the degree seen by the Broadband efforts.  As well, the value of funds required for this work will not consume the value of the funds the City may be able to secure.
As part of the annual budget planning exercise, Council deliberates the various capital proposals that administration brings forward.  These deliberations occur in the public domain and the proposals put forward are informed by residents and the business community’s perspectives that are received throughout the year by administration.
In preparation of the possibility of proceeding with the broadband project, administration has commenced preliminary discussions with various partners and potential vendors to ensure that the estimated funding requirements and high level approach that was developed a number of years back is still valid.  Furthermore, the City is commencing further analysis to assess the various operational approaches that could be utilized once the broadband project is built.
City administration is also in discussions with other municipalities to assess their broadband strategies to ensure that the approach taken by the City is reflective of other’s learnings and experiences in this area.
Upon Council’s concurrence on the project to be submitted for Capital Stimulus Funding, City administration will complete the grant application submission to the Province.  The submission deadline is October 1, 2020.  The Province has communicated it will confirm supported submissions shortly after receipt of applications.
City administration will maintain a close accounting of expenditures to the supported project as well as concentrating efforts with respect to “red tape” reduction efforts within the municipality.
Implementing this capital portion of the broadband strategy in the municipality will substantially improve the competitiveness of the City’s investment attraction in the industrial and commercial areas of the City.  Such an investment will also enable the City to capitalize on further Smart City efforts and Edmonton Global investment attraction strategies.  
While unable to confirm the likelihood of success at time of writing, the City will also continue to assess private market opportunities to partner on the broadband project as these opportunities continue to unfold at a rapid pace as the telecommunications industry is forced to become more competitive.

Fiscal Impact
Financial Implications:
If successful at receiving the $4,251,472 through the Capital Stimulus Funding, the Municipality would be required to provide an additional $550,000 to complete the estimated $4.8 million build of the project.  This project, along with the $1.9 million for the Fibre Ring were part of the approved capital projects in the 2021-23 City Corporate Plan and at that time were anticipated to fully funded through MSI.  Accessing the municipal stimulus funds for the broadband project will enable Council to reallocate those funds to other priority capital projects in the 2021-23 budget.
At time of writing, as the operational model has not been fully assessed, however operational costs for maintenance and repairs of the broadband infrastructure are estimated to be $136k/annum assuming the CoSG maintains the infrastructure itself (this does not incorporate operations of a broadband network).
Letter to Ministers

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