Cold Lake tried to stop being a city in 2009. If Alberta Municipal Affairs hadn’t said no, it might not exist today.
“We threw the keys at the government, basically. We said, ‘Dissolve us. We’re bankrupt. We’re insolvent,’” said Coun. Bob Buckle.
Cold Lake, which became a city in 2000, was struggling under the weight of rapid oil sands growth and city administration didn’t have the money to keep up with infrastructure demands.
Coun. Bob Buckle was on the city council that tried to dissolve Cold Lake and later negotiated a tax agreement that brought the city much-needed revenue.
Buckle said city engineers told council that 100 more homes could be built before development had to stop. The city’s sewer and water systems couldn’t handle any more growth.
The situation was so dire, Buckle said, that mayor Craig Copeland and the city councillors were prepared to lose their jobs over it.
“It’s not for the faint-hearted. You’re going to the wall,” Buckle said.
The infrastructure deficit was pegged at $150 million. Money was desperately needed to upgrade the city’s roads, sewer and water lines, as well as to build future infrastructure projects.
The city had lobbied the provincial government for financial assistance for years, said Copeland, and finally filed a motion to dissolve in 2009. The province responded by “forcing” mediation between the Municipal District of Bonnyville and the City of Cold Lake, resulting in a proposal from the MD for nine years of financial assistance to Cold Lake at $1.1 million per year.
Copeland said Cold Lake city council rejected the deal because it felt it had too many conditions for not enough money. Frustrated by the high cost of living in Cold Lake, the 4-Wing base commander at the time, Col. Dave Wheeler, now a major-general based out of Winnipeg, co-wrote a letter with city council to the province asking for a better deal.
In 2010, city council began secret discussions with the province about other solutions to Cold Lake’s financial woes. An inspector hired by the province found no evidence of fiscal mismanagement or city council dysfunction.
Cold Lake Air Weapons Range
Fiscal salvation arrived in 2012 when Cold Lake finally got a piece of the tax revenue from the Cold Lake Air Weapons Range.
Owned by the province, the air weapons range is the major area of oil sands development in Cold Lake, in addition to being an active site for military training as part of the 4-Wing base. Previously Lac La Biche County, a hamlet with fewer than 3,000 residents, received most of the land tax revenue from the air weapons range because of historical municipal boundary lines.
The Cold Lake Air Weapons Range is a lucrative if complicated piece of land. Copeland compares it to a house — the province owns the house, the federal government leases the house and the military manages the building. Oil companies must negotiate with the military for access.
Canadian Natural Resources Limited and Cenovus Energy have active projects on the Air Weapons Range and anywhere from 2,500 to 5,000 people work on the range, depending on the time of year. Several pipeline companies also have infrastructure running through the land.
In 2011, the Alberta government and the City of Cold Lake, Municipal District of Bonnyville, Lac La Biche County and the Regional Municipality of Wood Buffalo brokered a deal to create essentially a new municipality, Improvement District 349.
Lac La Biche received $5 million in 2012, with its cut falling by $1 million each year until it will be zero in 2017. The Municipal District of Bonnyville received $600,000 in the first year of the deal, increasing by $100,000 each year and topping out at $1 million.
In 2012 Cold Lake received about $11 million from the weapons range deal. The city received about $13 million in 2013 and $15 million in 2014, according to Copeland. The 2015 city budget projects $37.8 million in municipal tax revenue, including $19 million from the Cold Lake Air Weapons Range, he said. In 2011, before the deal was struck, the city collected only $15 million in municipal tax.
Renewed infrastructure investment
Copeland said the weapons range revenue has been a “game changer” for Cold Lake, particularly in helping the city begin to address its infrastructure challenges. In 2012, city council passed a 10-year, $270 million capital investment plan.
Since money from the Cold Lake Air Weapons range began flowing to the city, major improvements have been made to roads, water and sewer lines, drainage, the landfill transfer station, and a new building was constructed for Cold Lake and District Family and Community Support Services.
In 2012, the city spent $16.3 million in infrastructure services, $18 million in 2013 and $27.4 million in 2014.
By contrast, only $6 million was invested in capital projects in 2011, before Cold Lake began to receive Air Weapons Range tax revenue.
Despite major improvements across all areas of infrastructure, there is still much to be done to dig the city out of its infrastructure hole.
The 2015 capital budget is $22.3 million, with $8.3 million allocated to environment and utility infrastructure, $5 million for roads, and $5.7 million for facility improvements.
Underground infrastructure
Azam Khan, general manager of infrastructure services for the City of Cold Lake, said underground infrastructure is a major focus for the city in 2015 — drainage, storm water, water and sanitary lines.
Khan said that the city needs to keep upgrading its sewer and water lines because flooding and sewage backup has historically been a problem in the community. In 2012, city officials estimated the sewer system would need $75 million in upgrades. Nearly $22 million has been invested in water and sanitary infrastructure since 2013.
Copeland said he was inspired to run for city council in 2001 after his parents’ house was affected by the city’s failing sewer system.
“The only reason I got into politics was their basement filled with sewage,” Copeland said.
In February city council considered offering grants to residents who can’t get insurance to cover the sewage backups in their basements because of historical problems with sewage backups.
Copeland said the computer system that managed the sewage waste lift station broke down a couple of months ago, leading to another backup of sewage in homes.
Residents Trevor Smith and Gordon McKay told council in January that insurance companies are unwilling to cover homeowners because of previous sewage issues in the area, according to the Cold Lake Sun newspaper.
Cold Lake’s low-lying profile on the shores of a lake has also made storm water drainage a major infrastructure priority. In 2012, the city estimated $26 million would need to be invested in Cold Lake’s storm water system. About $1.7 million has been invested in storm water infrastructure since 2013.
Residential development in the south end of the city cannot continue until the storm water drainage pond in the area is upgraded. The city is paying for half of the $5 million project and residential developers are paying for the rest.
Khan said storm water drainage is a tricky issue for Cold Lake because the city is not allowed to have wet ponds due to the proximity of the Canadian Forces 4-Wing base. Standing water attracts birds, and they’re dangerous for airplanes.
The city has special permission to keep this particular drainage pond as a wet pond because it is being designed in such a way that will prevent animals from landing and nesting, Khan said.
Cold Lake will need to upgrade its wastewater treatment plant from the lagoon system to a mechanical plant by 2022.
Wastewater treatment
In anticipation of the city’s continued growth, Khan said the city also needs to begin the multi-year process of upgrading its wastewater treatment plant.
The current plant, which can process water for up 18,000 people, uses the natural process in which lagoons treat the wastewater by adding oxygen to it, as opposed to a mechanical plant.
Alberta Environment and Sustainable Resource Development told the city that it has to upgrade to a mechanical plant by 2022.
Khan said the first step in determining which plant they will need is to study how ground and storm water enters into the sanitary sewer system through the ground, adding to the load of household wastewater.
This study will cost $600,000 over 2015 and 2016. The overall ticket for a new plant could be up to $70 million, a cost that would have to be supported by the province, Khan said.
Annexation proposal
Cold Lake’s infrastructure challenges are exacerbated by a physical and political problem: there isn’t enough land available to support the upgrades to the roads and underground infrastructure that will be needed over the next 10 years.
“It’s built so pathetically,” said Copeland, describing the city’s drainage pattern and road networks.
This is partially due to the shape of Cold Lake’s physical footprint. The city used to be three towns — Cold Lake, Grand Centre and Medley — and it became an amalgamated town (and also tried to dissolve for the first time due to financial troubles) in 1996. However, no one put much thought into the boundaries of the amalgamated community.
“It looks like an Etch-a-Sketch,” Copeland said.
Map of proposed annexation. Photo courtesy of the City of Cold Lake.
To address this problem, Cold Lake has submitted a bid to Alberta Municipal Affairs to annex 20 quarter sections, or 20 quarters of a square mile, from the neighbouring Municipal District of Bonnyville, filling in the sides of the city’s hourglass shape. The idea to annex land was first floated in 2006 but it has been mired in political and administrative setbacks for years.
The City of Cold Lake has submitted its annexation proposal to the Municipal District of Bonnyville. If the two municipalities can’t come to an agreement, they will go before the Municipal Government Board, a provincial body, for mediation.
Copeland said they have had one meeting so far and he’s expecting they’ll need an intermediary.
“It’s tough for the MD of Bonnyville to give Cold Lake a win,” he said, referring to the historically tense relations between the two local governing councils.
“They can be strange people but it is, in my opinion, correcting a mistake in terms of how they initially made our boundaries.”
Ed Rondeau, Reeve of the Municipal District of Bonnyville, said his council believes Cold Lake doesn’t need as much land as they are seeking. He said Bonnyville is concerned about the loss of agricultural land to a city, knowing that it would be developed into commercial and residential tracts.
Copeland expects the annexation issue to be resolved in the next year. Both sides seem to agree that Cold Lake will get some land from the Municipal District. It’s just a question of how much.
Another political question essential to the restoration of Cold Lake’s infrastructure is the renewal of the Air Weapons Range deal. It expires on Dec. 31, 2016 and Cold Lake is then supposed to take total control of Improvement District 349 from the province.
The Town of Bonnyville, a separate municipal entity from the Municipal District, expressed interest in January in discussing the future of the deal. Both the mayor and the reeve of the Bonnyville communities told the Cold Lake Sun they want the province to ensure that more communities get financial benefits from the Air Weapons Range.
The Cold Lake Energy Centre cost $20 million to build and opened in August 2008. It includes a $25 million-arena, fitness centre and meeting space. A public garden, baseball diamonds and a skateboard park are planned.
Cold Lake regional airport
As the most populous city in northeast Alberta, Cold Lake has designs on using the tax revenue from oil companies to improve livability in the community.
Copeland said city council is exploring the possibility of offering registered air service through Cold Lake Regional Airport. Currently only a few chartered flights of oil sands workers or recreational fliers pass through the airport.
Most companies still choose to fly their workers commercially through Edmonton or Calgary, and if they do go the chartered route, fly through the Bonnyville airport instead of Cold Lake because it has a longer runway.
The first hurdle is getting the Canadian Air Transport Security Authority to agree to provide security screening at the Cold Lake airport. They provide security screening for all of Canada’s airports providing commercial air travel and are essential for getting Air Canada and WestJet to fly to Cold Lake.
Genia Leskiw, Cold Lake’s representative in the province legislature, said Cold Lake officials had already started the political process for getting CATSA screening in the city. She said the application had been filed and they are waiting to hear back from the federal government.
Leskiw said she didn’t think it was a priority for the community, but acknowledged that it would make Cold Lake more attractive to oil sands and military workers.
“You can’t blame people, you get to Alberta and have to travel another three hours to get to Cold Lake,” Leskiw said.
Copeland said getting commercial air service for Cold Lake to Calgary was a priority because it will encourage more business as well as improving the quality of life for residents.
Click on the coloured segments for improvement details and a photo.
Highway 28
The three-hour drive from Edmonton is mostly along the two-lane Highway 28.
About half of Highway 28 running through Cold Lake has already been upgraded to four lanes, costing the province $26.4 million. City officials would like financial help from province to twin the bottom half of the road running through the city as well.
They would also like to see the highway between Edmonton and Cold Lake eventually twinned. Residents said it is difficult to pass other vehicles and dangerous in the winter on the busy, narrow road where there is considerable truck traffic.
“You need to be a very good driver to do all those maneuvers and overtake these big vehicles,” Khan said.
He said they are not optimistic that twinning will happen anytime soon, but a few passing lanes that would allow drivers to get by big trucks heading for the oil sands would be ideal.
Alberta Transportation’s list of tentative construction projects for 2014-2017 includes some minor improvements to Highway 28, but it doesn’t say anything about passing lanes or twinning.
Karen Henderson, who works for the province in sustainable development planning for oil sands communities in Alberta, said that Cold Lake’s situation isn’t as dire as Highway 63, which is the only way to get to Fort McMurray from Edmonton.
“The advantage in the Cold Lake region is they do have other roads. If you’re going to Edmonton and you get stuck behind a truck on 28, you basically turn left. The roads will all eventually get you to Edmonton,” she said.
Infrastructure planning and oil prices
Henderson said that infrastructure planning is based on a number of complex factors and it wasn’t just a matter of reaching a certain minimum population and then being guaranteed an upgrade to highways.
She also said that the lower price of oil would have an impact on provincial dollars given to communities for infrastructure projects. There will be less money available from the province, including the Cold Lake Air Weapons Range tax revenue, if the price remains low. But there will also be less pressure on the city because there will be less oil sands activity.
Copeland said it’s business as usual on oil operations, but job losses were felt on the construction and drilling side of the business. He said there has been no word of new projects and doesn’t expect there will be until the price improves.
“A lot of priorities will change and this is not just transportation, it’s across government,” said Henderson, who has worked in Alberta Energy since 1999.
“We’ve had a couple of significant downturns. A bumper sticker you saw commonly in Alberta was, ‘Please God give us another oil boom I promise not to piss it away.’”