Council Update - May Meetings

Since our last update, Rocky View’s council has continued to make mostly reasonable decisions on land use redesignation and subdivision applications.  We are encouraged that Administration’s reports on these applications have improved substantially.  However, we are less encouraged regarding council’s initiatives, since the positive momentum that this council exhibited in its early days seems at risk of stalling out.  Most of the initiatives started under the former CAO are now complete or close to complete and the rest don’t appear to have clear timelines.

Some ongoing initiatives that should be of concern include utility rates and off-site levies for fire hall and recreation facility construction.  We’re providing more detail on these here, as well as some background information on the 2024 budget.

2024 County Budget

In April, council approved a 0% increase in property taxes as part of its 2024 budget deliberations.  This means that the same amount of total property tax revenue will be collected in 2024 as was collected in 2023.  It does not mean that an individual property owner’s property taxes necessarily stay the same.  That depends on how each property’s assessed value changed relative to other properties.

The value of non-residential assessment increased significantly again this year, which generates more non-residential property taxes.  For 2023 and 2024, Administration’s forecasts of non-residential assessment growth were much lower than actual growth.  In 2023, the forecast was $2.3 million in new non-residential assessment while actual growth was $6.9 million.  For 2024, the forecast was $2.0 million in new non-residential assessment while actual growth was $9.2 million. While conservative estimates of assessment growth make sense, substantial discrepancies mean that council’s initial consideration of the annual budgets is based on faulty revenue estimates.  

Despite the significant growth in non-residential construction, existing residential properties increased more in value than non-residential properties – good news for anyone looking to sell their property.  As a result, for a 0% tax increase to be reflected in residential property taxes, council shifted the balance between residential and non-residential property taxes.  For many years, non-residential property tax rate has been 3 times the residential property tax rate.  For 2024, this differential increases to 3.5 times.    

Utility Rates – Moving to Full Cost Recovery for Operating Costs

Past councils sporadically raised concerns about the reality that general tax revenues subsidize operations of county-owned water and wastewater utilities.  The current council is no exception; however, their decisions on utility rates have been difficult to follow.

In November, as part of the budget decisions, Deputy Reeve Kochan introduced a motion to move rates for county-owned utilities to full cost recovery in the 2024 Master Rates Bylaw.  However, after some debate, Council chose to move utility rates to full cost recovery over the next three years (2024 – 2027).

When the 2024 Master Rates Bylaw was brought forward later that month, Administration recommended a 5% increase in utility rates to ensure that rates reflected real cost increases in delivering utility services.  However, instead of going with staff’s recommendation, Kochan’s motion to keep 2024 utility rates at the same level as 2023 was approved. Then, in finalizing the 2024 budget in April, after considerable debate, council approved Kochan’s motion to approve a 3% rate increase for county-owned utility services. It was pointed out in the debate that while a 3% increase reflected inflationary increases, it ignored actual operating cost increases.  From our perspective, if Council is really committed to full cost recovery, this is an odd way to get there.

The May 21^st Governance Committee meeting received a consultant’s report on the financial status of the County’s utility operations and how to move forward to reach full cost recovery in the next three years.  The report laid out the substantial amount of work that needs to be done to achieve that objective – starting with the need to obtain an accurate understanding of all the costs of the utility operations.  The report also emphasized that council must understand and agree with the core assumptions used to determine a future rate structure.  The bottom-line message was that Administration does not have the resources and/or the expertise to deliver on these without additional outside expertise from appropriate technical consultants.

Council also has other key issues to address on the County’s utility rate structure, including:

• Should each utility continue to have individualized rates, or should all water utilities and all wastewater utilities be combined to provide blended water and wastewater rates that would be the same for all users of county-provided utilities?

  • The impacts in terms of rate increases for various groups of users differ significantly depending on which option is chosen.

• What costs should be included in “full cost”? 

  • Costs, such as administrative billing costs, that are currently not included clearly should be; however, it is less clear how much of costs such as corporate overhead should be included.

  • Currently utility rates are not set to provide reserves for capital replacement costs – should those be part of ongoing utility rates?  To date, replacements have been funded from general tax revenues and/or the Tax Stabilization Reserve, which is past surpluses from general property taxes.

• Should generally available solid waste services (chuckwagons and waste transfer sites) be priced for full cost recovery?  Or are there generalized benefits to encouraging people to use these facilities that mean it makes sense to use general tax revenues to cover some of their costs?

For anyone interested in the details of these issues, the staff reports presented at the September 12, 2023 and March 13, 2024 Governance Committee meetings provide a solid analysis of the options.

Off-site levies for fire hall and recreation facility construction

We firmly believe in using off-site levies to ensure that new development pays its share of the costs associated with growth.  However, the critical question is what infrastructure is appropriate for Rocky View?  We are concerned that the proposed off-site levies for future fire halls and recreation facilities assume much higher level of services than make sense.

From our perspective, Rocky View is a rural municipality with pockets of higher density communities that are still significantly less than urban densities.  Residents choose the benefits of this style of living over the conveniences of urban living.  Because of that, is it reasonable to expect urban levels of fire response times and/or recreation facilities?  To provide either would require substantial increases in property taxes since levies will only cover a fraction of the costs.

Administration has focused its presentations on how to structure the off-site levies while many on Council continue to question the actual need for many of the facilities. 

The total cost of the fire halls and recreation facilities in the proposed off-site levies is $173 million, only $32 million of which are expected to be paid by off-site levies over the next 20 years.  The remaining capital costs, as well as all ongoing operating costs, will be borne by existing residents through higher immediate property taxes and/or future property taxes to cover borrowing costs and/or reduced fiscal flexibility by using the County’s “rainy day fund” (the Tax Stabilization Fund).  To put this into context, each $1 million in county expense requires a 1% increase in property taxes. 

Having existing residents pay the costs associated with their share of benefits from future infrastructure investments only makes sense if the actual investments make sense.  It is not clear whether that critical connection exists for either the proposed fire halls or recreation facilities.

Council has put any decision on an off-site levy for fire halls on hold until they review and approve a Fire Services Master Plan, which should provide a review of appropriate response times and what that implies for fire hall requirements.  Hopefully, a new Fire Services Master Plan will recognize that urban level response times do not make sense given our sparse population and limited access to on-site water for fire fighting.

Unfortunately, council does not appear to be doing the same for off-site levies for recreation facilities.  This is despite the reality that many on council recognize that the facilities recommended in the existing Recreation Master Plan do not accurately reflect the County’s future recreation needs.  As some have pointed out, the Recreation Master Plan reflects “wants” rather than “needs”. 

Administration continues to assert that the “test” for identifying recreational needs is the availability of facilities within a 20-minute drive.  However, some of the proposed facilities fail that “test” since they are well within a 20-minute drive of many comparable facilities in our urban neighbours.  From our perspective, it doesn’t make sense to recreate Rocky View owned facilities when alternatives already exist so close by.  It likely makes more sense to explore more cost-sharing options with our neighbours.

Other Upcoming Policy Development Initiatives

There are a number of policy documents in various stages of development.  Here is an update on some of them:

The Prairie Gateway Area Structure Plan will be highlighted in an open house on Tuesday, May 28^th from 4:00 – 7:30pm at the Track Golf Course, 333 Boulder Creek Drive in Langdon.   

This is the ASP that RVC is working on in conjunction with Calgary.  The ASP is located on land that Calgary had originally proposed to annex when Rocky View introduced the developer-paid Sheppard Industrial ASP.  Working out how this land will be developed in a collaborative manner will hopefully result in a better outcome for all involved.

After the open house, an online survey will be available on the RVC website.  The survey will be available from May 28^th – June 11^th.  The webpage for the project also includes a copy of the draft ASP as well as other background information.

The Springbank Area Structure Plan may be reaching its final stages.  It is scheduled to come back to Council’s May 28^th meeting for a progress report before a final draft is released in advance of a public hearing.  No date has been set for the public hearing. 

The Municipal Development Plan (County Plan) is moving into its next phase of public consultations.  Administration presented an update to Council’s Governance Committee on May 21^st that reported on what they heard during Stage 1 consultations and provided detail on Stage 2 engagement.  Stage 2 engagement will start in June with a focus on county-wide policy areas where there was not clear agreement on direction from Stage 1.  Then, from August to October Administration will seek input on draft sections of the proposed new MDP.  You can find the “what we heard” report from Stage 1 here.  Once details of the new engagement opportunities are known, we will pass on the information. 

The Aggregate Resource Plan (county-wide gravel policy) is winding down its first stage.  The Stakeholder Advisory Committee, which included representatives from country residential and agricultural communities as well as from industry, submitted their final report to the County last month.  Once that report is released, residents will have an opportunity to comment on the Committee’s recommendations before Administration presents it to Council – tentatively scheduled for July.  As soon as there is more concrete news, we will be sure to let you know.

The Bearspaw Area Structure Plan has been quietly percolating behind the scenes.  According to its webpage, a draft ASP should be released sometime this spring.  Stay tuned for updates.