Suburbs need to pay more: Iveson
Homeowners moving into Edmonton’s new suburbs should be asked to pay more for fire stations, new interchanges and facilities such as the Lewis Farms Recreation Centre in this upcoming budget, Mayor Don Iveson said Tuesday.
He laid out the five principles he’ll bring to this fall’s budget debate and said Edmonton’s existing business owners and residents can’t be asked to cover the roughly $1 billion it would take to provide services for the new areas planned and under construction.
“We do need a new way forward,” he said, responding to loud calls from business leaders to a limit in the property tax increase. “I’m squaring the circle.”
“Growth ... with the right formula in place, should indeed pay for itself,” he said. “It’s no longer fair and justifiable for me to go to a business owner on Fort Road and say, you have to bear as much of the cost of a new interchange on the Terwillegar as everyone else.”
Wage pressures, catch-up on aging infrastructure and these new growth pressures have already caused taxes to more than double in the last 10 years.
Edmonton also added 200,000 people in that time, mostly in the suburbs, but it now can’t afford to twin the roads, upgrade the intersections and build the new fire stations all those new neighbourhoods need, Iveson said.
A new approach, requiring those who benefit from the new infrastructure to pay for it, can get those services built faster, he added. That’s a tool that was recently allowed under the amended Municipal Government Act.
It can apply to homes not yet built. But Iveson also wants to use the approach to create zones in the city that support specific infrastructure.
For example, city staff can tell from postal codes how far people are likely to travel to a new recreation centre. That means people around the new Lewis Farms facility might be asked to pay a special levy to subsidize at least part of the cost to get that built.
Construction is estimated at $200 million. If that was all coming from the general budget, debt servicing would require a one-percent tax increase across the board.
That approach should also be applied in older neighbourhoods, Iveson said. Currently, the budget includes a 1.2-per-cent tax increase to start renewing back alleys, which means businesses and neighbourhoods that don’t have back alleys are still being asked to pay.
Iveson said he’d like to take that tax increase back out, charging residents at least part of the cost of their alley renewal based on how much back alley is attached to their property. That way people with larger properties pay more and people living in apartments or a duplex would pay less. “That rewards efficient use of land.”
After Iveson’s announcement, the Edmonton Chamber of Commerce and new lobby group Prosperity Edmonton celebrated the focus on fiscal restraint.
But the suburban developers represented by the Urban Development Institute Edmonton Region were shocked and disappointed. They’ve been trying to negotiate a fair levy system for new developments for two years, but the city pulled funding from the joint working committee a year ago.
Since then, they had one more meeting and “basically, the phone stopped ringing,” said Andrew Usenik, chairman of the board and a partner with Strata Developments.
People who benefit from new infrastructure should pay an equitable share, he said, but Iveson’s announcement Tuesday amounts to just downloading costs to the homeowner. Developers want Edmonton to cut costs, not just pass them on, he said. “The fundamental issue here is still being missed.”
In the west end, the suggestion residents pay a special levy caught many off-guard.
The real issue is that Edmonton businesses and residents demanded zero tax increases in the 1990s. “Now we’re playing catchup but no one wants to pay for it,” said Paul Andrews, chairman of a steering committee for the formation of the Rosenthal Community League.
“We want to be a big city, we want to grow.
“But you’re not going to pay for the amenities?”
Why should west-end residents pay more to build Lewis Farms when they already helped build massive recreation centres in Terwillegar, Clareview and The Meadows, said Candace Smashnuk, president of the Secord Community League.
“Everybody in the city uses these recreation centres,” she
said. “Would (a special levy) mean exclusivity for west-end people?” Smashnuk lived in Edmonton all her life and moved to Secord eight years ago.
Iveson said he’s hoping the funding deal with the province won’t be about new grants, but about a funding formula that ties Edmonton’s new funding to economic growth.
On cuts, he said he expects some small, neighbourhood swimming pools and single-sheet ice rinks to be on the table.
He also expects other tough proposals from the city ’s corporationwide program and service review.
This approach is not about ideology, about pushing a vision for a more population dense and urban city, he said. “This is not at all about suburbs versus the rest of the city,” he said. “Fundamentally, this is a fairness issue.”