Mayors float idea of new water charge
Development fee would help pay for infrastructure
Two Metro Vancouver mayors say the regional district should impose a development cost charge to pay for growth-related investments in water infrastructure.
The idea came as Metro’s board of directors decided to approve significant increases to the sewage development cost charge rates.
“I don’t know why Metro doesn’t have one,” said White Rock Mayor Wayne Baldwin, who is also a Metro Vancouver director. “It’s only fair for development to pay its own way rather than all the taxpayers.”
White Rock, which has its own water source separate from Metro Vancouver, is one of a number of cities in the region that have municipal development cost charges for water projects.
“It just makes so much sense,” Baldwin said.
Next year, capital expenditures in the water district are expected to increase 26 per cent over 2017, from $163.1 million to $206.1 million. Over the next five years, the capital expenditures on water projects are expected to more than double, from $206.1 million in 2018 to $422.5 million in 2022.
Homeowners in the region will see the difference on their water bills. In 2018, the average household, valued at $1.14 million, will pay $165 to the water district. That will increase to $209 by 2022.
The 2018-22 capital program is worth $1.75 billion. According to budget documents, $823.3 million, or 47 per cent, is for growth-related projects.
The bulk of the rest goes toward upgrading and maintaining an aging system and things such as seismic upgrading.
Growth-related projects include reservoir expansions and water main replacements south of the Fraser.
At a recent regional budget workshop, Pitt Meadows Mayor John Becker said that given a large percentage of the projected capital and operations expenditures over the next five years will be related to growth, the cost should be allocated to growth rather than absorbed by taxpayers.
Most of the water district’s revenue comes from bulk water sales to member municipalities.
“What we take out should be managed the same way as what we put in,” he said.
Chief administrative officer Carol Mason said the sewage and water districts are governed by different acts, and in the 1990s Metro Vancouver received specific authority to impose development cost charges in the sewer district.
“We don’t have that authority in the water district. It would require a change to the act to give us that authority,” she told Becker.
Becker responded: “I would suggest it’s a process that we should be investigating. It strikes me as an anomaly as to why we treat the two differently, and if the legislation needs to be fixed, then let’s fix it.”
City of North Vancouver Mayor Darrell Mussatto, who chairs Metro’s utilities committee, said he plans to bring the idea up with staff to examine the implications and feasibility of instituting a water development cost charge.
“I think there is some discussion that should be had there,” Mussatto said. “Just like our waste water, we need some infrastructure for expanding the (water) system, and we have to pay for it somehow.”
In the sewage district, a liquid waste development cost charge is levied at the time permits are issued and collected by municipalities on behalf of Metro. It covers 99 per cent of the cost of regional growth-related sewage projects.
Metro decided in 2014 to review the rates, which have not changed in 20 years. Across the region, rates are expected to rise between 75 and 229 per cent.
Staff will now forward the sewage development cost charge amending bylaw to the inspector of municipalities for approval. If it is approved, it will take effect on May 1.
Lobby groups representing developers and homebuilders in the region have decried the development charge increase as a threat to housing affordability.
On the idea of a water development cost charge, Anne McMullin, president and CEO of the Urban Development Institute, said in a statement that if a fee was considered her organization would want to be consulted early in the process. She also recommended a phase-in period for any new fee.
“While we do believe our industry should help pay for new infrastructure, any additional fees must be taken in the context of the myriad of new and significantly increased fees developers pay at both the municipal and regional levels,” McMullin said.
“All of these new and existing fees have an impact on regional housing affordability.”