MOOSE JAW — City council is divided over creating a new stormwater utility, with the crux being either to impose more taxes on residents or let infrastructure crumble and pay significantly more in repairs in the future.
City administration wants a stormwater utility created to ensure there is sustainable funding for daily operational expenses and future stormwater infrastructure projects and maintenance costs, a 2025 budget report said. These financial resources would improve the overall condition and functionality of stormwater assets.
Annual operating costs this year are expected to be $326,122, representing almost one percentage point of taxation. Meanwhile, city hall spent $1.15 million last year on stormwater capital projects.
The estimated replacement value of all stormwater infrastructure items — which are “in poor to very poor condition” — is $210.73 million, with 79.8 kilometres of pipes being the highest valued at over $156 million, the budget document said. Upgrading all items connected to just the Spring Creek system is expected to cost $20 million.
The monthly fee that administration wants to charge would be based on a lot’s surface area since that method “is reasonably equitable,” is information the municipality has available and could be implemented quickly, the report continued. Aside from agricultural land, all properties would face this charge.
Single-family residential properties would all pay the same charge; multi-family properties, such as apartments and condominiums, would have lower monthly fees than residential because of their denser property footprint; and commercial, industrial and institutional would pay the second-highest fees because of their surface area and the amount of stormwater runoff they generate.
The report noted that the proposed fee structure would be based on lot size in square metres (sqm), number of properties of that size, rate per month, and total revenue generated per month from that group:
- Up to 2,000 sqm: 12,490 / $5 / $62,450
- 2,001 to 7,000 sqm: 633 / $22.50 / $14,243
- 7,001 to 12,000 sqm: 191 / $47.50 / $9,073
- 12,001 to 17,000 sqm: 131 / $72.50 / $9,498
- 17,001 to 22,000 sqm: 44 / $97.50 / $4,290
- 22,001 to 30,000 sqm: 33 / $130 / $4,290
- 30,001 sqm and up: 179 / $170 / $30,430
City hall expects to collect $134,273 per month or $1,611,276 annually from all those properties.
For homeowners, the $5 per month would translate into $60 per year, while for commercial/industrial/institutional, the $170 per month would equal $2,040 per year.
Conversely, administration said a flat fee for all properties would be $10 per month. However, the “disadvantage” to that is those properties — mainly commercial/industrial — that contributed more stormwater runoff wouldn’t pay more.
Prioritizing projects
Since most single-family residential properties pay an average of $1,800 annually in municipal taxes, they would pay $15 less per year if the mill rate dropped by almost one percentage point if stormwater expenses were removed from the operating budget, said Coun. Chris Warren.
However, the utility’s creation would add an extra $60 annually to their bills, which would be “a significant expense” for most people, he continued.
Warren understood that the city has significant shortfalls in the stormwater utility infrastructure while the capital budget has competing project priorities in areas such as roads, parks or buildings. Yet, the proposed tax hike was already over five per cent, not including other utilities and levies.
The councillor then asked administration if it had considered amalgamating stormwater into water and wastewater, with the goal of collecting tax revenue in a single stream and prioritizing projects in those three assets.
Stormwater is separate from water/wastewater because they have different rate structures, and while all three could be amalgamated, administration would still face the same dilemma of insufficient capital funding, said finance director Brian Acker.
The problem is the municipality receives only eight per cent of all tax revenues, while the province and the feds receive the rest, which puts a significant burden on taxpayers, he continued. So, council needs to either find a funding source for stormwater rehabilitation or quit doing other capital projects.
“… a lot of work has to be done. It’s just a matter of time till it’s a crisis with our stormwater,” Acker added. “And it’s not very far away, to be honest.”
While it’s great to have a report about the condition of infrastructure, council should be spending within its means and not always raising taxes, said Warren. He wanted council to rank and prioritize storm-water-wastewater projects and determine whether they were in crisis mode and should be done first.
Warren added that the city is facing a huge infrastructure revenue deficit, but he was hesitant to ask residents to pay more.
Taxes and services
Coun. Dawn Luhning said she understood that council faced capital budget deficits and was doing its best to administer tax dollars and manage its municipal responsibilities, but couldn’t “stomach” putting another water charge on taxpayers’ bills.
“People in this city already think their water bills are high. It’s a fact,” she said. “People (also) feel their taxes are too high.”
Based on emails and calls she’s received, Luhning said people correlate what they pay in taxes to services they receive, such as seeing a snowplow clear their streets — or never seeing one. She didn’t think she could justify a six-per-cent tax increase to people whose streets were never plowed, nor would that increase be accepted well since people “get antsy” when council adds fees.
Luhning thought water-related infrastructure projects needed to come before other initiatives like an outdoor pool, arena upgrades or a new landfill, because if Moose Javians didn’t have water or couldn’t flush their toilets, “this city is in big trouble.”
She pointed out that council doesn’t have the money to support all of administration’s proposed budget initiatives, while taxpayers don’t have more money either because of inflation. Moreover, council can’t take money from the water/wastewater utility reserve to cover capital deficits because that’s for the new Crescent View Lift Station (CVLS).
Eating the elephant
Council faced the same challenge with tackling the cast iron replacement project, which was similar to “a huge elephant” and figuring out “how to eat the whole thing,” said Coun. Heather Eby. Yet, council started small, and while its efforts “seemed like a drop in the ocean,” the city made progress.
With the stormwater utility, Eby thought council could start with a drainage fee first and then increase it as the years progress.
Eby used her own tax bill to show that, while she didn’t live “in a fancy house” or neighbourhood, her family paid $156.18 last year for utilities. Moreover, over Christmas, she spent $150 to have snow cleared from in front of her house and her daughter’s — and then a city grader filled that space again.
“So I get a pretty good deal from the City of Moose Jaw for $156 a year for public works (services),” Eby said, noting that utility bill expenses look big, but they’re “really, really reasonable” if broken into separate service categories. “I’m not saying it doesn’t hurt when you add a tax increase or levy, but the benefit … is tremendous.”
Eby said she was “willing to eat a little bit of the elephant this year” and launch the stormwater utility this year, while she saw no point in upgrading Crescent Park’s Serpentine Creek when the upstream infrastructure was crumbling.
“I don’t want to pass along more increases to citizens, but we have been working in crisis mode for pretty much as long as I’ve been here,” she continued, pointing to cast iron pipes and Buffalo Pound Water Treatment Plant as past crises and the CVLS as a possible crisis if council didn’t make it a priority.
“I don’t want to wait … (until) the storm sewer is a crisis and then we’ll deal with it.”
Heads in the sand
Coun. Jamey Logan said he was initially opposed to this utility but also realized council would be punting this issue down the road if it didn’t address stormwater infrastructure. Moreover, while hindsight was 20/20, he thought council should have acquired the biggest loan it could have pre-COVID-19 because of how much inflation has increased expenses today.
“None of this is going to go down in cost. And putting our head in the sand is not going to make this go away,” he said.
If council creates this utility, then commercial and industrial properties will be particularly hard hit because they’re already paying 1.8 times the tax rate as residential properties, he added. Those owners — who would also pay a fee for their residences — would likely pass on those increases to their already struggling tenants.
Because of this issue’s importance, council tabled the report to the Jan. 23 budget meeting for further discussion.