Road Maintenance Agreement Rates

Res #: 29-11A
Number: 29
Year: 2011
Midterm: No
Expired: Yes
Responses Received: No
Departments: Saskatchewan Ministry of Municipal Affairs

WHEREAS the current maximum road maintenance and loss of road life rates allowed under The Municipalities Regulations were last revised in 1999; and

WHEREAS the cost of road maintenance and construction has increased dramatically since then; and

WHEREAS heavy haul traffic in many rural municipalities has also increased dramatically;

BE IT RESOLVED that SARM lobby the Provincial Government to revise the maximum rates for road maintenance and loss of road life allowed under The Municipalities Regulations to a level that more realistically reflects the current cost of road maintenance and construction.

Response from Honourable Darryl Hickie, Minister of Muincipal Affairs:

A committee with representation from government, SARM, Rural Municipal Administrators’ Association (RMAA) and industry stakeholders, conducted a review of road maintenance agreements beginning in 2007.

The committee recommended changes to the road maintenance agreement template, which were incorporated and posted on the Ministry of Municipal Affairs’ website. Comments from all stakeholders were incorporated into the development of this template which was released for use in 2009.

The committee also recommended addition of a dispute resolution process, which was added to The Municipalities Act in spring 2010.

The committee was unable to reach consensus on the road maintenance agreement rates – mainly in part because municipalities did not have the required data needed to identify actual road maintenance and restoration costs. A recommendation of the report was for a project that would gather actual cost data from municipalities. Upon completion of this study, government should be in a better position to determine how road maintenance rates should change. Selected RMs will be called upon to participate in this study and provide the required information.

Municipal Affairs and SARM have designed a study to gather the data required for a rate increase. The project will assist RMs in documenting the incremental costs in road maintenance and restoration costs from heavy hauls. Access to tracked data will assist the Ministry in deciding on an appropriate and accurate rate increase in the future.

In 2011-12, funding to Rural Revenue sharing is $62.9M, an increase of $14.4M or nearly thirty percent compared to 2010-11 ($48.5M). With an increase of approximately 30 percent in revenue sharing dollars, it is government’s expectation that municipalities will have more funding for maintenance costs such as road repair. Roads are a large component of the current rural revenue sharing formula, with 70 percent of funding being determined by transportation calculations. It is important to remember road maintenance fees are only to cover the incremental costs in maintenance and loss of life brought about by heavy hauls.