Rapid growth in the oilsands has strained the booming town of Fort McMurray. ((CBC News))

The$396 million promised by the province for hospitals, sewage, and affordable housing is desperately needed in a city reeling from runaway growth —but it's not enough, residents of Fort McMurray say.

A room packed with health-care executives, school board administrators, municipal councillors and oil company officials applauded Premier Ed Stelmach on Monday after he announced the new funding for their community in response to a report dealing with rapid growth in the oilsands.

Most in the north-eastern Alberta town were relieved that the province is finally doing something about their long-standing complaints.

"The government has not only listened, but they have acted. It's in the actions that people provide evidence that they are committed," said Bernie Blais, the head of the Northern Lights Health Region.

Stelmach's recognition that Fort McMurray has unique needs is a big change from former premier Ralph Klein's administration, said Phil Meagher, the town's deputy mayor.

"Is it all we want or all we need? No it's a start," he said. "This is a few steps into the journey of getting things balanced."

The municipality needs more than $1 billion just to catch up on a wide range of infrastructure needs, Meagher said.

Mike Allen, president of the Fort McMurray Chamber of Commerce,said the business community is hopingthe cash infusionwill help with troubles recruiting workers to the city for businesses that are desperate for staff.

Money earmarked for clinics, sewage, housing

More than $200 million will be spent over the next three years to build three new health clinics and a helipad for the regional hospital.

Another $100 million is earmarked to help build a new sewage treatment facility and to upgrade the water treatment plant. Finally, more than $50 million has been set aside for affordable housing.

Ravi Natt, president of the municipally owned Wood Buffalo Housing and Development Corp., said her agency got $45 million to build affordable housing and plans to build 300 homes with the money.

However, she said, she has a waiting list of 400 families and people needing places to live, so her agency will have to go cap-in-hand to the government soon.