Town of Peace River facing dissolution

The Town of Peace River is in a serious financial pickle – a dilemma that could result in the municipality becoming a hamlet and dissolving into the Municipal District of East Peace No. 131.
Town councillors took a gigantic leap towards financial stability in late August after Mayor Lorne Mann forwarded a letter of intent Aug. 28 to Walter Paszkowski, Minister of Municipal Affairs, requesting that he conduct a dissolution study with the intent of Peace River being absorbed by the MD of East Peace.
“The Town of Peace River has some serious financial difficulties to overcome and while council has been diligent in dealing with this situation, we are only serving to delay and prolong our ultimate demise,” Mann stated is his letter to the minister.
The decision to request the study falls on the heels of a public meeting which took place at the town hall Aug. 30 and was attended by an estimated 150 people. During the meeting, the Town of Peace River outlined its rationale for requesting the dissolution study in a 20-minute Powerpoint presentation.
The primary focus of the meeting was to bring everyone in the community up to speed on how significant shortfalls in revenue continue to impede the town’s ability to grow and progress.
“Unfortunately, when we are forced to cut service levels or increase taxes, it is a disincentive for new growth and development,” Mann said, adding that “we see ourselves in a downward spiral that will only tighten as time goes on.”
One of the most significant concerns presented by town officials at the meeting centered around concerns that the MD of East Peace and municipalities in the surrounding area are not paying their fair share when it comes to using the town’s infrastructure and services.
Residents from the MD of East Peace have been accessing facilities and services within the town for more than 20 years without being charged tiered user fees or contributing any additional funding to assist Peace River. Town officials say that has created a significant financial burden on urban taxpayers in terms of the repair and replacement costs of infrastructure which is enjoyed by all residents within the region.
Several financial comparisons between Peace River and the MD of East Peace were made at the meeting, including population figures, total live assessment values and the current residential mill rate. The town’s population is 6,687 with a total live assessment of $289,609,190, an assessment per capita of $44,310 and a mill rate of 10.34. The MD of East Peace, meanwhile, has a population of 2,552 with total live assessments at $689,910,940, a per capita assessment value of $267,598 and a mill rate of 6.0.
In his letter to the minister, Mann said “On several occasions we have attempted to convince our rural neighbors that we require their assistance in order to have a strong and viable regional service center. We have recognized the strong desire of the rural municipalities to retain their autonomy while at the same time have them recognize our need for assistance. Despite requests which have dated back more than a decade, the Town of Peace River continues to receive little, if any, support from our surrounding rural municipalities.”
Attempts at service and revenue sharing with the MD of East Peace began in 1990. In 1999, the town and MD entered into a service sharing arrangement with the MD later withdrawing despite support from the Department of Municipal Affairs and Premier Ralph Klein. Earlier this year, Peace River met with the MD and presented another revenue sharing proposal which the MD responded to by requesting further regional meetings to discuss the financial situation of the town.
The dissolution study will help to determine the viability of the Town of Peace River and is expected to include recommendations to the citizens regarding what future actions, if any, should be taken.
According to legislation under the Municipal Government Act, only residents in the dissolving municipality (Peace River) would have the opportunity to vote on whether or not to dissolve into the MD of East Peace. Two examples of this happening in recent years include Fort McMurray, which is now part of the Regional Municipality of Wood Buffalo, and Sherwood Park, which remains a Hamlet in the County of Strathcona.