Growth fees bring in more than expected, but city can't spend it yet

Revenue from Winnipeg's new growth fees is exceeding expectations, but it's unclear how, or even if, the city will be able to spend the cash.

Winnipeg began charging what it calls an impact fee on new residential developments in several neighbourhoods at the fringes of the city on May 1. The new development charges — about $500 for every 100 square feet of new residential space — were expected to generate $1 million worth of new revenue for the city in 2017.

As of the end of August, those charges had already generated about $1.4 million in new revenue for the city, chief financial officer Mike Ruta told city council's finance committee on Friday.

Ruta said he could not make a projection for what the final growth-fee tally will be by the end of 2017.

"This is our first year and certainly projections are very difficult to determine. As we go forward, we're certainly going to have a better handle on how this is evolving," Ruta said in a scrum with reporters following the meeting.

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• Growth-fee lawsuit keeping Winnipeg, developers from further talks

Mayor Brian Bowman pushed for the fees to help the city pay for infrastructure projects in new areas of the city. Under a plan approved by council, a working group involving city officials and developers was supposed to figure out how the fees would be applied next year and in 2019.

That working group, however, was put on hold this spring, after Winnipeg developers launched a legal challenge of the new revenue-generating mechanism.

Invitations to join the group are only going out now, said council property chair John Orlikow (River Heights-Fort Garry).

This leaves the city with additional revenue that it cannot spend, at least in the short term.

"I'm really waiting to see what the results of the legal challenge are. I hope that that is determined, one way or another, sooner rather than later," council finance chair Scott Gillingham (St. James-Brooklands-Weston) said at city hall.

"Council will discuss it, but I'm certainly reluctant to personally see it spent before we know the outcome of the challenge."

Former Manitoba Home Builders' Association director Mike Moore, who represents the developers in their legal challenge, could not immediately be reached for comment.