Replacing decaying sewage and water systems is at the top of the infrastructure priority list for the mayor of Stony Plain.

The town west of Edmonton also needs a new recreation centre, Mayor William Choy said.

Choy said the last one was built 17 years ago, and since then the population in the region, including nearby Spruce Grove and Parkland County, has tripled to about 18,000.

But budgeting for road construction projects and upgrades to community facilities has become a challenge because of uncertainty about the grant funding municipalities will receive from the province when the current agreement expires in 2021.

Following the release of a blue ribbon panel's report , which recommended rethinking how much money the province transfers to cities, towns and counties, some municipal leaders are worried about cuts to infrastructure grants they count on.

"It's been difficult because of the unknowns," Choy said.

Stony Plain is already taking steps to be more efficient with tax dollars, sharing a fire department and other services with neighbouring communities, Choy said.

"We are responsible with our tax dollars, and trying to make sure we stretch it as far as we can," he said. "But we just need to know what that funding level is, so we can actually plan for our capital projects, plan for our service levels."

The MacKinnon report found Alberta's per capita spending on municipal grants is 20 per cent higher than the national average. The panel recommended bringing that level in line with other provinces, and asking municipalities to shoulder a larger share of the costs of infrastructure projects.

Barry Morishita, president of the Alberta Urban Municipalities Association, says 'gaping holes' will remain in capital budgets until the province reveals its new plan. (AUMA)

It's a concerning prospect for Barry Morishita, president of the Alberta Urban Municipalities Association (AUMA), who said it's unclear what factors were taken into consideration by the panel when calculating per capita spending.

"Alberta experienced significant growth in those 10 years that [the panel] talked about," he said. "Communities had to be built, infrastructure had to be put in."

CBC requested an interview on the subject, but a spokesperson for Alberta Treasury Board and Finance said the panel isn't "doing any more public comment on the report."

Morishita, who is also the mayor of Brooks, said while the association recognizes the fiscal realities Alberta faces, slashing the grants would put a lot of pressure on municipalities, which he said operate about 60 per cent of infrastructure but only keep about 10 per cent of the total tax revenue that comes in.

"We have to be restrained, but at the same time we cannot allow infrastructure to deteriorate to a point where it becomes a detriment to economic development," he said.

In late 2018, the former NDP government inked a deal with Edmonton and Calgary that ties funding for capital projects to gains and dips in provincial revenues. The rest of Alberta's municipalities were left hanging, and Morishita said negotiations with the new United Conservative Party government are continuing in good faith.

Striking a deal that uses a formula to tie grant funding to Alberta's overall fortunes would be fair, said Beaumont Mayor John Stewart.

Beaumont is delaying budgeting work it normally completes in October until later in the year, after the province delivers the budget on Oct. 24, he said.

But the mayor is optimistic about the province's plan. He said it was reassuring to hear from Premier Jason Kenney and Municipal Affairs Minister Kacey Madu at a meeting earlier this month.

"While they both were very clear that fiscal restraint is coming, they were both pretty adamant that they were going to make sure we had the resources we need to do what we need to do," Stewart said.

Madu did not agree to an interview, but his press secretary provided a written statement that said the minister recently spoke with Morishita and other AUMA members about their concerns. Those conversations will continue at the AUMA annual convention this week.

"We are all in agreement that we need to share in the recovery ahead, and look forward to working together to achieve our common goals," the statement said.