For Brian Bowman, it's growth fees or bust
Nearing the midpoint of his first term, Winnipeg's mayor faces his biggest challenge to date
As Brian Bowman nears the mid-point of his first term as Winnipeg's mayor, city hall is struggling with the complicated question of growth fees.
The timing isn't accidental. Getting developers to share a larger burden of the city's infrastructure burden is difficult on so many levels, it would have been impossible to accomplish as a first-year mayor — and idiotic to attempt for a civic leader facing re-election.
On a diplomatic level, Bowman must convince developers accustomed to Winnipeg's existing regime of development charges that it's in their interests to help their city reduce its reliance on property taxes and utility bills as a means of paying for new infrastructure, such as new regional roads, bridges and watermains, sewage-treatment upgrades and expanded police, fire-paramedic and library services.
On a political level, Bowman must convince his council colleagues of the benefits of this plan — as well as the wisdom of engaging the development community, which wields tremendous power and influence.
On a legal level, Bowman must convince the province that the city has the legislative ability to bring in these charges on its own.
But the most complicated task of all involves the actual implementation of new development charges. Figuring out precisely what form they should take, how and where they should be applied and what exemptions ought to be allowed will require the collective effort of officials in the upper ranks of almost every City of Winnipeg department, in consultation with the development and construction industries.
As critics of the mayor have pointed out over the past few weeks, the latter job won't happen quickly. It would be foolish to expect it to occur in 105 days, which is the span between the Sept. 1 release of consulting firm Hemson's growth-fee study and a city-council budget vote expected in the middle of December.
Financial fights on the horizon
Nonetheless, some developers, including Qualico vice-president Eric Vogan, say they fear Bowman wants development charges in place in time for 2017.
Bowman has stoked these fears, stating on Monday he wants to "expedite" the discussion about growth fees. Whenever he's asked to address complaints about the speed at which growth-fee talks are taking place, Bowman has pointed out council endorsed a study nearly a year ago.
The mayor has also stated the city cannot spend decades discussing the charges, given the growing size of city's infrastructure deficit — roughly $7 billion — as well the widening gulf between the city's fast-growing spending demands and its slowly growing revenue streams.
Bowman is correct about the need to address the city's funding gap, much like Sam Katz, Glen Murray and practically every other mayor before them.
The problem is, this mayor has pledged to limit property-tax hikes to the rate of inflation during his first term. In order to accomplish that, the city would have to clamp down on spending in a manner that may involve service cuts as well as wage-and-benefit battles with its unions.
Those fights are coming, as collective agreements between the city and the unions representing roughly four out of five city workers are due to expire at the end of 2016. Those unions include the Canadian Union of Public Employees Local 500, the United Fire Fighters of Winnipeg and the Winnipeg Police Association.
And if the labour storm is a headache, provincial finances could give the city a concussion in the spring, as the second Pallister-government budget is expected to be more austere than its hastily assembled post-election spending blueprint.
This is all bad news for a city struggling with its finances. Over the past five years, this city has already tried to do everything but institute deep service cuts in an effort to stave off very high property-tax increases.
The city has already tried vacancy management to keep labour costs down, frontage-levy hikes as a surrogate for property-tax hikes and siphoning off water-and-waste revenue in the form of so-called dividends.
The only mechanism left to cover the funding gap, besides cuts and higher-than-inflation property-tax hikes, are development charges. This is why some developers contend the mayor is hell-bent on bringing these charges in sooner, rather than later.
Targeted vs. blanket approach
The fact that the growth-fee initiative has been led by the city's corporate-finance people, rather than the planning, property and development department, lends credence to this view. So does internal correspondence, obtained by CBC Manitoba, that shows planning director John Kiernan express grave concerns about the blanket application of growth fees to every part of Winnipeg.
In several other Canadian cities, growth fees are applied selectively, if not surgically, in order to increase density. This makes sense, as when more people live or work within a given area, fewer kilometres of roads and pipes are required to service their homes and workplaces.
Right now, there's no evidence the city is working on such a nuanced plan. In fact, the meagre evidence that does exist suggests a blanket fee is on the table.
Winnipeggers will only know for certain this fall, when city staff are supposed to complete a growth-fee report that will lay out exactly how the fees can and will be implemented.
Is it even possible for a credible report to be produced so quickly? Perhaps, but that still doesn't address how developers will be engaged, let alone brought aboard, in a mere matter of months.
In other words, Bowman may have to wait until 2018 to see Winnipeg bring in new fees. That doesn't bode well for budget 2017. It also means potential ammunition for a developer-funded 2018 mayoral-race opponent.
This is why the next few months will pose an even greater challenge for this mayor than the True North Square tempest of 2015.
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