Village of Cereal dissolving after community vote

Village of Cereal
Written by Terri Huxley

After a near split decision, Village of Cereal residents have made their decision.

Locals chose to dissolve in a 42 – 37 vote.

There were two days of voting given on whether to dissolve or remain a village on Wed. Sept. 30 and Thurs. Oct. 1.

Now that the people have spoken, they will move forward with becoming a hamlet within Special Areas.

Cereal’s viability review report that was last updated on Sept. 9. gave an in-depth view of both pros and cons of choosing to stay a village or dissolving into Special Areas.

Residents will participate in the election of an individual from Area 3 to represent them on the Special Areas Advisory Council.

The municipal office in Cereal will eventually close and administrative functions would be provided through the Special Areas office in Oyen.

Special Areas has indicated it would sell the CJ Peacock Centre (formerly the local school), community hall, and arena/curling rink, to a community group or private purchaser.

Funding from the Special Areas would be available to subsidize recreation in Cereal.

Special Areas has also indicated in this report that a general expectation that service levels for infrastructure and utilities would be kept the same.

As for essential services, the Special Areas will continue water, wastewater, and roadway maintenance services.

If operational costs of the hamlet exceed revenue from property taxes at the Special Areas tax rate and utility fees, a special levy or differential tax rate may be assessed.

The combination of property taxes and potential special levies would likely be less than the current level of property taxes paid to the village.

Utility fees would be reviewed to ensure they recover the full cost of the service and consumption.

Bylaw enforcement will be provided by Special Areas officers on staff.

The Cereal fire hall will continue to function as long as there is an operating volunteer fire department.

This viability process began roughly two years ago when a large negative financial position of the village and its performance on key municipal indicators which initiated a need for the minister to take action.

When the review was initiated in 2018, the village’s 2017 audited financial statements showed an accumulated municipal operating deficit of $390,000.

This included $352,000 in grant funding that was provided to the village for capital projects, but may have been used for village operating expenses.

The village is also said to have a consistent history of tardiness in completing financial information reporting and submitting audited financial statements.

This has further compounded the difficulty in determining the state of the village’s financial position and the potential solutions to address it.

A viability screening of the Village of Cereal was conducted in April 2018, following assessment of the ‘Key Measures for Success’.

The Minister approved on June 13, 2018 that a viability review will be undertaken.

The village was approved for Alberta Community Partnership funding for the infrastructure study on Sept. 25, 2018.

A Viability Review Team (VRT) assembled by Alberta Municipal Affairs, following the collection and analysis of information from both the Village of Cereal and the Special Areas as part of the ministry’s viability review process.

The VRT included elected officials and administration of the village and the Special Areas, as well as officials representing the Alberta Urban Municipalities Association, Rural Municipalities of Alberta, Local Government Administration Association, and Alberta Rural Administrators’ Association.

In this executive summary supplied by the VRT, they stated the village is unfit in its current state to survive on its own.

“The viability review demonstrated that the Village of Cereal is likely not viable in its present condition, and will require considerable financial resources and community effort to ensure its viability.

Specifically, operational costs exceed revenue, and it appears some requirements of the Municipal Government Act (MGA) have not been followed consistently.

“At the time of the report, the village has a significant accumulated bank debt. In addition, the 2019 financial statements show ‘unexpended reserve fund accounts related to eligible capital projects are underfunded by $475,625’.

“In simple terms, it appears that provincial funding which was to be used for capital items (e.g. infrastructure, equipment) may have been used for other expenses.

This means that the village likely needs to plan for repayment of provincial funds used for these other expenses.”

Special Areas comprise over five million acres of land in southeastern Alberta, and a population of approximately 4,200 residents.

For the full report, view it here:


Terri Huxley

ECA Review

About the author

Terri Huxley

Terri grew up on a grain farm near Drumheller, Alberta with an eye for the beautiful and uncharted. Living in such a unique and diverse area has helped her become the photographer and reporter she is today.

Coming from the East Central region getting this newspaper on her dinner table growing up, it helped her understand the community she now serves.

In May 2019, Terri was awarded Alberta Weekly Newspaper Association (AWNA) Canada's Energy Citizens Photographic Awards Sports Action – First Place as well as first for the same sports action image nationally with the Canadian Community Newspaper Association (CCNA). Fast forward to 2020, she has won second in the same category for the AWNA.