The president of the Alberta Urban Municipalities Association on Thursday repeated allegations that the Conservative government plays pork-barrel politics with municipal grants.

In a breakfast speech to association members and provincial MLAs, Linda Sloan went further, demanding a new deal for municipalities that reduces reliance on what she called "variable and unpredictable" government grants.

She offered no evidence that the grants are doled out on a partisan basis, but appears to have turned municipal funding into an election issue.

"It's more than just our sewer systems and roads that need fixing, it's the funding model itself," Sloan said, noting municipalities doubled their debt loads between 2004 and 2009 to make up for the funding shortfall.

"We're mortgaging Albertans' future to meet today's needs. At the same time, municipalities are becoming increasingly reliant on provincial grants."

In 2004, she said, provincial transfers accounted for 10 per cent of local governments' revenues. By 2009, that number had doubled.

"Which means a full 20 per cent of critical infrastructure and core municipal services are being delivered with short-terms sources of income," Sloan said.

That will be the message the AUMA will promote with its new Local Matters election campaign, which will highlight the growing infrastructure deficits and increasing debt that municipalities are shouldering and advocate for a new funding model.

Later, speaking to reporters, Sloan repeated her controversial claim that more municipal grant money is handed out to municipalities that support the Conservative party.

"What we have said - what I have said, what previous presidents of AUMA have said, publicly and to members of government - is that the grant system has been subject to reduction, to change and to partisan influence," Sloan said. "That is why we have a problem with it, that's why it needs fixing."

Earlier this week, the same unsubstantiated allegations provoked a backlash from the government, with Municipal Affairs Minister Doug Griffiths boycotting the AUMA breakfast and chief of staff Stephen Carter publicly accusing Sloan of telling malicious lies.

Griffiths later called a truce with Sloan and attended the breakfast, and Premier Alison Redford told Carter to issue an apology.

Griffiths said he hadn't seen any proof of Sloan's allegations and that the two have essentially agreed to disagree and get on with business.

"I've never seen anything that's partisan," Griffiths said, explaining that some grants are not distributed on a per-capita basis because roads, for example, are needed where the economy is growing. "That has nothing to do with whether or not your MLA has influence or political partisanship. That's just political business, and that's the role of government."

Griffiths said he has been working with municipalities to come up with a new funding model, and will continue to do so. He pledged to work with municipalities over the next four years to draft a new Municipal Government Act that will outline a new funding model.

In 2012-13, the province will transfer $2.1 billion to municipalities, Griffiths said. Of that money, $896 million is distributed under the Municipal Sustainability Initiative, which allocates money based on a funding formula of 48 per cent by population, 48 per cent by education tax requisitions and four per cent by kilometres of local roads.

The remaining money is distributed thorough 22 grant programs, which municipalities must apply for individually.