Fiscal Responsibility & Transparency -- County Debt
In the early 2000s, the County was almost debt-free. Rocky View now have over $90 million that still needs to be collected from developers through off-site levies and at least another $100 million in commitments that have not yet been recorded in the financial statements.
The $90 million is what still needs to be collected from the $135 million in debt incurred on a “if we build it they will come” promise used to justify the east Rocky View water / waste water infrastructure. Unfortunately for Rocky View taxpayers, the original levy rates were set ridiculously low. As a result, the initial wave of development failed to pay anything close to its fair share of costs. In 2013, levy rates were increased to a more sustainable level. However, since then, there has been little new development in the area.
To meet its debt repayment obligations, the County has been “borrowing” money from the tax stabilization reserves. This uses general revenues, the primary source of which is property tax revenues, to pay down debt that was supposed to be paid by developer levies with a promise that levies from yet-to-come development will pay the money back in the “future”.
As well, because there has not been nearly as much development as the County had optimistically anticipated, the system operates significantly under capacity. As a result, utility rates from existing users have fallen short of operating costs every year. The County has used general revenues to cover this annual shortfall since the system began operating over a decade ago – an additional $1 – 3 million / year.
Moving forward, it is essential that the County ensures that all costs of development are paid for by the development itself. County taxpayers should not be left to pick up the costs if actual development falls short of what has been anticipated.
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