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Why doesn't growth pay for itself?

 

Paying for growth


West LRT construction
 
 

It's complicated. In any new community in Calgary, the developer pays for the installation of pipes, roads, stop signs, sidewalks and the like; really, all of the infrastructure that is necessary for residents to live there.

Long-term Operating costs to The City

That, however, represents only the capital costs. The money paid by developers only covers the requirements to have the infrastructure built and installed. The flip side of the coin is the long-term operating costs. As with any community, the new ones require City services like fire, 3-1-1, transit, snow clearing and ongoing operation maintenance. This is all paid for through operating costs which are covered, in part, by your tax dollars. Further, operating costs go beyond infrastructure specific to any one community. There’s also off-site infrastructure like waste and wastewater facilities, recreation centres and major roads and bridges.

The capital costs are primarily covered through home sales. Operating costs are a mix between utility rates (your Enmax bill, for instance), property taxes, and grants from the Province of Alberta (which are never guaranteed). If The City of Calgary sees property tax rates that fully cover operating costs, The City is in fine shape. But that’s rarely the case.

Priorities need to be made

Over the long term (sometimes 20-30 years), growth does pay for itself. But it’s the time before that when priorities need to be made. If The City pays for one service, it might not be able to afford another. That’s why you, as citizens, will sometimes see a City business unit tell Council it can’t fully meet priorities. Take Calgary Transit as an example. City Council finalizes Transit’s budget and that business unit works with what it has. If service hours and routes can’t be covered by the budget, Calgary Transit has to set priorities and start slashing the lower-priority routes.