Province steps in as Gibbons council approves interim budget and borrowing plan amid financial crisis

Trent Wilkie, Local Journalism Initiative Reporter, St. Albert Gazette

The Town of Gibbons approved an interim 2026 operating and capital budget during a special meeting on Dec. 18, as the municipality continues to navigate financial pressures under the oversight of a provincially appointed Official Administrator.

The interim budget carries forward 2025 spending levels and is intended as short‑term authority while administration completes a thorough financial review and brings forward a final 2026 budget and tax rate bylaw in the spring. Interim Chief Administrative Officer Tim Duhamel told council the measure is a bridge, not a destination.

“We feel that we’re not in a position to pass a strong interim operating budget nor a final budget at this time,” Duhamel said. “We believe that we have a lot of work to do.”

Council adopted two motions: one to continue 2025 operating levels with strict limits, and another to impose a moratorium on new capital projects except where required for health, safety or regulatory compliance, or where current contractual obligations exist. To make the restraint explicit, Official Administrator Harold Johnroot asked that council’s minutes reflect the operating guardrail he recommended.

“Spending authority will be limited to essential and legislatively required and service‑priority operations only,” Johnroot said.

Johnroot was appointed on Dec. 10 under Section 575 of the Municipal Government Act following discussions between the town and Alberta Municipal Affairs. Introducing the new oversight framework, Assistant Deputy Minister Gary Sandberg said the administrator’s role is to review council decisions for compliance and financial prudence, not to supplant elected officials.

“The official administrator does not replace council,” Sandberg told members. “He will work collaboratively with you and administration to help you address the challenges you face.”

Sandberg added there is “no intention at this time to dissolve the municipality,” though he outlined the viability‑review process that would precede any dissolution if a future council or the public asked for that option.

For his part, Johnroot brought attention to the nature of his mandate.

“I’m not here to fix the problem,” he said. “I’m here to provide oversight to ensure the problem is being fixed.”

He noted his immediate priorities include a short‑term cash‑flow plan through July 2026, followed by a three‑year financial plan focused on restoring working capital and reserve capacity, meeting debt‑servicing pressures, and delivering a compliant 2026 operating and capital budget.

Council also authorized administration to seek up to $1 million in short‑term operating debt to maintain cash flow ahead of the 2026 tax levy. Ryan Musch, interim director of corporate services, described the step as tactical.

“This is a stopgap measure,” Musch said. “We need to ensure we can meet obligations while we work through the recovery plan.”

Duhamel acknowledged the discomfort with borrowing to fund operations, noting it is generally considered a poor practice.
“We are very strongly opposed to using operating debt,” he told council. “But with our current cash‑flow situation, we have no choice.”

In tandem with the fiscal controls, council approved a Public Engagement and Transparency Plan aimed at keeping residents informed throughout the recovery. The plan commits to open meetings wherever possible, town halls at key milestones, and plain‑language summaries of complex financial issues.

“We all ran on a platform of transparency,” Mayor Rick Henderson said. “There’s not a person here that wants to do anything in closed session when we don’t absolutely have to.”

Administration explained that closed sessions will be reserved for matters where disclosure could harm the town’s financial or legal interests—such as personnel, contractual negotiations or solicitor‑client advice—in compliance with provincial access‑to‑information rules. To manage expectations, Duhamel said updates would be regular but scritinized.

“Sometimes it takes time,” he noted. “The information we provide has to be factual and correct.”

Council further updated signing authorities, naming the mayor, all councillors, the interim CAO, interim assistant CAO, and the finance manager, with Henderson and Duhamel designated as primary signatories. During debate, Johnroot cautioned that resolutions and bylaws involving money must not be acted upon until the Official Administrator has provided written approval or the 30‑day review window has passed, reflecting the administrator’s statutory power to disallow decisions found non‑compliant.

In an attempt to find funds in creative ways, Gibbons has previously explored unique revenue options. In late 2019, then-CAO Farrell O’Malley floated a proposal for the town to partner with a credit card issuer, act as the primary cardholder and issue cards to homeowners, with the town paying the monthly consolidated bill at a low borrowing rate and residents repaying the town directly; interest on carried balances would accrue to the municipality, with unpaid amounts potentially added to property tax bills. Public reporting at the time estimated the program could generate $900,000 to $1.8 million annually for infrastructure if adopted, though analysts warned of regulatory hurdles and risks for a small municipality, and the idea did not move forward.

Johnroot’s appointment currently runs to Sept. 30, 2026, with the option to extend if required. Administration plans to return to council with a detailed repair strategy and a final 2026 budget in the coming months, alongside ongoing town halls and reports designed to keep residents apprised of progress.

As Gibbons works through a difficult time, most information reaches residents through official channels—agendas, reports, correspondence, websites and social media—with only occasional professional regional coverage. The town’s 2019 credit-card proposal drew CBC and Global News attention, but ongoing finance stories are often missed. Fewer local papers mean less scrutiny of municipal decisions, making transparency efforts more important.

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