Rocky View residents concerned about fiscal responsibility are worried that county council will consider financing options for expanding the water and wastewater infrastructure in east Rocky View at its first meeting in January.
The County invested heavily in the east Rocky View water/wastewater infrastructure in the early 2000s on the expectation that if infrastructure was there development would follow. This has not happened. The initial levies charged developers were too low to get back a fair share of the costs. The county increased levy rates to more realistic levels in 2013, but the hoped for development to pay for the system has still not materialized.
The county has carried the infrastructure debt for over a decade. As of Sept. 30, 2016, the county’s long-term debt that goes with this infrastructure was $56 million. The county has let people believe that this is all that it owes.
Recent information from Rocky View Financial Services, however, substantiates that the $56 million is only part of what is still outstanding. In addition to the long-term debt, $15.6 million needs to be paid back into the county’s Tax Stabilization reserves and $14.7 million is owed to specific developers who fronted some of the initial costs on an agreement that they would be reimbursed. That meant that more than $86 million still outstanding, not including accumulated interest.
Since 2013, the county has used $1 million of general tax revenues each year to speed up the repayment of the infrastructure’s long-term debt. The County promises that this will be repaid from future levies. But a similar promise has not been fulfilled for the $15.6 million taken out of the Tax Stabilization reserves when the infrastructure was built.
In addition, each year general tax revenues have also been used to subsidize the infrastructure operating costs. This has been necessary because there are not enough users for their utility rates to cover the annual operating costs. This subsidy appears to have been between $1.5 million and $2.3 million each year for the past 11 years. This is a total subsidy to users of this infrastructure of about $20 million – over and above the carrying costs from the initial $135.1 million spent on the infrastructure.
From our perspective, this suggests that the county has not shown an ability to repay the cost of the existing infrastructure. At past repayment rates, it will be at least another 20 years before it is finally repaid. The current economy does not give me optimism that enough new development will appear to pay for the infrastructure at a faster rate. Given this, it is very disturbing that council will soon be contemplating adding even more to the burden of financing this infrastructure. Janet Ballantyne
