Town council looks for the least unfair way of raising cash for roads

‘Playing dumb isn’t going to work for us anymore’

Joe McWilliams
Lakeside Leader

As previously reported, the Town of Slave Lake has what’s called an infrastructure deficit. In practical terms, it needs to rebuild a certain amount of its roads every year to keep from falling further behind. And it doesn’t have the money to do it.
This is not an unusual situation at all.
“No municipality has enough money to keep their infrastructure up,” said mayor Tyler Warman at council’s April 3 discussion on the topic. “The province recognizes this with the MSI (Municipal Sustainability Initiative). But it’s still not enough.”
The matter up for discussion was which of several methods of raising the needed cash the town ought to employ. That is assuming it doesn’t decide to do nothing, which is always an option. Just not a very good one.
Council heard from acting CAO Roland Schmidt that over 10 years, $24 million in road rehabilitation has been identified. If not dealt with, these paved streets gradually revert to pothole-filled gravel roads.
“We could put it off,” Warman conceded. “But it would just be compounding the problem for somebody else.”
He got no arguments on that point from any of his colleagues.
“Playing dumb isn’t going to work for us anymore,” said councillor Darin Busk.
“Suck it up and do something,” was councillor Brice Ferguson’s comment.
However, no method of raising extra money is without its problems. The town has used different schemes in the past. One of these was the problematic ‘local improvement levy’ (LIL). It was a system whereby the directly-benefitting property owners were assessed 30 per cent of the cost of a road re-habilitation project. Although this system has not been applied in the past seven years or so, there are still residents paying off their LIL in monthly increments. One of the acknowledged problems with any new system that might replace the LIL is that those folks would be getting hit twice on their monthly bills – hardly a fair situation. The solution for that would be for the town to pay off the entire amount still owing, so everybody could start fresh on the new scheme. That would be about a $400,000 hit – probably from town reserves.
Council took a long look at the LIL system last year and determined that it is not workable anymore. One of the main reasons was dollars and cents. The cost of rebuilding roads has gone up quite a lot since the LIL was last invoked (pre-2011) and that 30 per cent share was going add anywhere from $800 to $3,200 a year to people’s town bills, Warman said. The other reason was more one of philosophy. It could be argued, council felt, that everybody in town benefits when a road is rebuilt, not just the people with property on that road. So let’s look for a fairer way to raise the needed money; i.e. spread the burden over the whole population (or at least the property-owning part), regardless of which road is being fixed.
Having arrived at that conclusion, the question was then one of method. Should the infrastructure levy be based on property value assessment? If so, some would pay more than others, an unfairness most councillors seem eager to avoid. Should it be based on frontage? Also unequal. Another was just to add an amount to the general tax bill. Schmidt said some other municipalities do that and it has certain administrative advantages. But it would also result in people paying different amounts. How about a per-lot fee, equal across the board? That was what administration was recommending.
“I want to go with a flat amount,” said councillor Darin Busk, leading off the discussion. “I don’t care if you’ve got a mansion or if you live in a trailer.”
Busk’s colleagues in general agreed the flat rate was the fairest way to go. But it is also not without its problems. For example, an apartment building represents one lot, the same as a lot with a single-family dwelling on it. The same goes for a trailer court. So under the proposed method, the apartment building owner would pay the same as the owner of the lot with one house on it.
“Can’t you apply the levy differently to multi-unit lots?” asked councillor Ferguson.
“We can’t pick and choose,” said director of finance Roland Schmidt, citing the Municipal Government Act rules on the matter.
“That’s depressing,” said Warman. “I feel like we just sunk the ship.”
On the other hand, “we can’t do nothing,” he said. “We can’t go back to local improvement levies.”
There would be other unavoidable discrepancies. One would be on a street with government-owned housing on one side and privately-owned houses on the other side. All benefit equally from new pavement, but the provincial government isn’t paying any taxes on the lots it owns. Its decision a few years ago (the last government) to stop paying a grant in lieu of taxes for such properties was a $100,000 tax hit on the town. It won’t be paying any improvement levies either, council heard.
Councillor Rebecca King imagined another type of unfairness.
“I’ve I don’t own a car I’m not benefitting equally,” she said.
True, said Warman. But another way of looking at it is that most people who don’t own cars are likely to be living in apartments, and they wouldn’t be paying anyway under the flat fee per lot scenario.
“It’s a tricky one,” he admitted.
Council was not being asked to, and didn’t make any decision. However, they will be called upon to do that fairly soon. If the town is going to impose an infrastructure levy this year, it has to be ready to do it when the tax notices go out.

Share this post

Post Comment