As a former mayor, former town councillor, former resident, former property owner, former business person and former president of the Chamber of Commerce in the Town of Sundre, I feel compelled to address the issues of the east-side servicing.
In my opinion there are several issues that are co-related.
In the first instance, the last town council was of the opinion that the area on the east side of the river had considerable potential for residential, commercial and industrial development. Toward this end negotiations with Mountain View County were undertaken for annexation. It became patently clear that the county was not prepared to relinquish the existing commercial and industrial development tax base to the west of town. In fact the county had positioned itself to develop more commercial developments at the intersections of every primary and secondary highway in the county. So the town's strategy was to seek the county's accommodation to the east of the east boundary of the town. The town's need for an enhanced commercial/industrial base thus might be achieved. During these negotiations the matter of water supply to this area was discussed and the county agreed that such an opportunity would benefit both parties to an annexation. In fact they were prepared to enter into a Memorandum of Understanding that included financial support for this type of infrastructure development. The basis for this undertaking was that the county would agree to pay for an increased “capacity” to meet its future requirements.
At issue is the manner in which the infrastructure would be financed. When the Building Canada Fund was announced, the river crossing project was “construction-ready” and an application was submitted and it was accepted. This offered the town $6,000,000 and the town is required to provide $3,000,000 in matching funds. The town would have to use surpluses or reserves or borrow the money to meet its portion of the capital requirement. The town does have allocated reserves but as a standing policy these reserves are used for infrastructure replacement. The replacement of the town offices and the town shop for about $3,000,000 had depleted any surpluses that the town had accumulated so it was expected to have to borrow the town's portion. The town is still within acceptable limits of its borrowing capacity and can issue a debenture secured by the assets of the town.
However the issue is exacerbated when you ask the question: What good is a source of water on the east side if there are no users? As part of the continuing engineering study the distribution infrastructure was designed. And we now have the cost of $19,108.679.
The town asked the engineering consultant to design the infrastructure to accommodate the equivalency of 15,000 households, so that the future densities of the county would be accommodated. The then current Municipal Development Plan (MDP) of the county and Inter-Municipal Development Plan (IDP) with the county, required that any residential development in the county adjacent to the town must have an urban overlay design so that when any residential in-fill occurred the subdivision would have urban-type servicing. So the bulk of this extended capacity was intended to cover the residential development requirements of the county. The town suggested to the county that this would amount to a contribution by the county of about $2,000,000. The county countered that the formula for increasing the size of the pipe in the river crossing and trunk lines was incorrect; that flow in essence, had nothing to do with pipe size. (We have to recognize that the county staff are probably experts in hydraulics and so the county council was probably well advised.) So the county said no to any financial contribution, notwithstanding that they had already agreed to assist in the cost of infrastructure. This is not merely a matter of semantics, it is a practised tactic of the county in any negotiation: agree and then disagree. Therefore there will be no water/sewer services to county residences and businesses to the east and south of Sundre.
But it still does not make sense to build an infrastructure on the east side to only accommodate the annexed area of say 500 additional households. The county or Alberta Environment eventually are not going to be able to allow forever in the county for the drilling of water wells indiscriminately or trucking of water to subdivisions or to allow for commercial undertakings that require large amounts of water. The town has to be committed to an infrastructure design that provides for potential growth.
As the town tries to determine where to find the remaining $10,000,000 to complete the servicing to the existing subdivided area, a question of being equitable is raised. Should the burden of cost fall to the municipality at large, the property owners on the east side or a mixture of both?
The Notice of the Borrowing By-law No 40.11 suggests that beyond other Alberta grants, $5,918,000 will come from the municipality and $1,500,000 more will have to be added to $3,000,000 debenture required to match the Alberta and Canada grants for the Building Canada program. So the town is committing itself to an expenditure of $10,418,000 for east-side servicing of about 280 properties or about $37,000 per property after discounting the $6,000,000 in Building Canada funds and $2,689,000 in other Alberta grants.
The current plan for cost recovery says east-side residences will pay $24,000 and commercial properties will pay for the cost of infrastructure in front of their property. There is no discounting for commercial properties. There is a propensity in the current town administrative staff to think that commercial/industrial property owners have the means to pay for their servicing because they make money from their investment in the property through the sale of goods and services. This is notwithstanding the fact that the mill rate for these properties is higher and they pay a business tax. Can you imagine paying another $1,500/month in tax for water you don't use, for snow removal you don't receive, for garbage that is not collected, for a business that is declining because of the current economic conditions?
When the town is a developer of a commercial/industrial or residential subdivision it recovers the cost of infrastructure through the sale of land and just as it requires a developer to pay for the cost of infrastructure before putting land into service, who then partially recovers this cost in the price of the land. The town may require a developer to “oversize” roads and underground infrastructure to accommodate other possible developments beyond the land being owned and developed by others. In the Development Agreement with the developer the town undertakes to recover from the owners of other possible developments some of the cost that other developers paid for “oversizing” the infrastructure. This is done in the form of an “Off-Site” levy and future development agreements. Some of the Off-Site levy includes the municipal cost of water/sewage treatment, storage and distribution as well as the assigned cost of the oversizing done for the developers. The town is the developer of this new infrastructure for the east side and has to find a way to pay for it. It has no property to sell so it has to pass the cost through to the existing and future property owners.
A simple formula is suggested to me from the Public Notice published in the Round Up. As I see the information before me the $5,918,826, the portion of cost allocated to the taxpayers at large, should be considered a off-site levy amount and $4,500,000, the amount of the debenture, should be considered the allocation to the 280 property owners, and instead of the suggested formula that allocated cost per property owner of $24,000, it should be $16,000 per property owner on the east side, amortized over 10 years or about $1,800 per year, regardless of whether it is a residential or commercial/industrial property. The balance of cost recovery for $5,918,826 should be assigned as levied cost based on persons per hectare for any new subdivision development on the east side of Sundre and this would be added to the costs already assigned by Bylaw 866. With a future service population of 15,000 persons and a density of 25 persons per hectare this would be an additional levy of about $10,000 per hectare, which covers the cost of the river crossing and oversizing of underground infrastructure.
What the town doesn't want to do is discourage development. What the town needs to do is to be forward thinking. Why does the town want to penalize the business persons and east-side residents that have invested in the Town of Sundre? They should be considered advocates for what occurs in Sundre. The business owners should not be penalized because they make money on the use of their property. The town has created the way the town has developed on the east side. Don't make the current residents and property owners in that area pay for the mistakes that the town has made through its planning and development processes.
Bob McIntyre, P.Eng. Sherwood Park, Alberta
