Calgary softens utility fee hikes as developers shoulder more of suburbs' cost
Robson Fletcher | CBC News | Posted: September 19, 2016 9:00 PM | Last Updated: September 19, 2016
Drainage fee increase also reduced as city finds efficiencies and opts to save less money
Brand new homes need brand new pipes to bring them water and brand new sewer lines to return their wastewater — often to brand new treatment plants — and all that new stuff costs new money.
But now that suburban developers have agreed to pay the full cost of new water and wastewater infrastructure, individual Calgarians will get a break on their bills.
No, the fees won't be going down, but they will be going up by a lot less than previously forecast.
- City council will discuss lowering utility rate hikes
- Calgary developers lose 'sprawl subsidy' on water, road costs
On Monday, council approved water and wastewater fee increases of 2.5 per cent for 2017 and 2018.
Back in 2014, the city's financial plan included increases of 8.3 per cent — each year — on those bills.
But several things have changed since then, most notably a new standard development agreement between the city and the companies that build new communities.
Under the old agreement from 2011, developers covered half the cost of new water and wastewater infrastructure but, after that agreement expired in 2015, they inked a new deal with the city that sees them cover 100 per cent.
"Now, we are reaping the benefits," Mayor Naheed Nenshi said Monday as council approved a reduction in the fee increases set for 2017 and 2018, and likely beyond.
The impact of the change will vary depending on water usage, but for a typical household it will mean about $70 per year in 2017 and $148 by 2018, according to city estimates.
The new development agreement wasn't the only reason for the reduced fee hikes, however.
The city also found some savings through departmental budget reviews and by spreading out future spending on utilities maintenance and growth over a longer period of time.
Drainage fee hikes trimmed, too
Council also voted Monday to reduce planned drainage fee hikes.
Those fees had been set to increase by 19.1 per cent in both 2017 and 2018.
Now, they are set at 7.4 per cent.
That will mean about $18 per year to an average household next year, and $42 by 2018.
The city runs its drainage operations on a self-sustaining model, meaning the costs are to be entirely recovered by the fees, rather than using property tax revenue.
As part of that, the drainage operations also aim to maintain a reserve fund of about 10 per cent of revenues, but so far haven't met that mark.
The fee reduction was partially achieved by pushing the target date for that level of savings from 2018 to 2022.