If you haven’t heard, last week Town Council passed their budget with a 1.34% tax increase. Council believes that this is marginal and with zero percent the last two years, we are well below inflation.
While it feels like good news to us, we still have a very real issue to deal with and that’s road repair. We have looked at this issue a lot over the last three years and so here is a refresher.
First off we need to decide what roads need to be fixed. Council recently worked with an engineer to examine every road, every sidewalk, and all underground water and sewer lines we have in town. We then had the company develop a ten year plan.
Our past council then went out and visually inspected every stretch of road within the priority list identified in the ten year plan. In the end we came up with a road rehabilitation program for the next ten years. In reality roads should last between 25 to 40 years depending on a use, or other circumstances.
Our ten year road rehab plan only identified approximately 15 per cent of the roads in town that needed to be fixed, or upgraded. Council needed to then identify the next piece of the puzzle, how do we fund them?
Traditionally the cost of fixing a road has been shared by three sources of revenue, those being reserves, grants and users. The “users” are the people who directly live or conduct business along that particular street. In the past we imposed an local improvement levy, and adjacent landowners to the road under repair shared in a 15 to 20 year loan to pay them off.
This loan/Local improvement levy could range anywhere between a few hundred dollars to $700 or $800 in additional fees, and would show up on your tax notice as local improvement levy.
While an local improvement levy is not unique to Slave Lake, our current situation is. Essentially, we had a big chunk of the roads fixed after the fire. As a result we have not been imposing levies for a few years and our outstanding balance from previous loans/levies is probably the lowest it will ever be. We are currently sitting around a balance of $400,000, we would need to pay this amount off if we were changing philosophies.
We currently have the best opportunity to make a change. So why do so? The two biggest issues are planning and fairness. Due to the fact we impose a local improvement levy, adjacent residents to the roads we are looking at fixing have the right to vote it down which can usually delay the fix, and could potentially end up costing us more, or we end up negotiating a different rate (levy) with residents which can be seen as unfair to the next group of residents who have their road fixed.
Another big issue we have identified is whether the adjacent landowners that live on that street should be the only ones who only pay for the road upgrades.
Due to the fact that reserves and grants are for all of us and make up the biggest portion, it could be argued that they are already contributing.
Another argument that could be discussed is the size of our community. We are not a big community like Edmonton, or St. Albert and more than likely a large percentage of drivers and using every road in the town. So to have a small group that lives on the street be hit hard financially so all can benefit, might not be fair either.
The other major hurdle we have experienced over the last 15 years is the cost of road repair has substantially increased.
To understand how much costs have gone up, we started looking at upgrading a portion of roads in the North East, these were scheduled to start last year but due to weather issues it has been pushed back to sometime this spring. When we examined doing a local improvement levy it was going to cost each adjacent landowner a potential extra $1000-$3000 per year for 15-years to get it the roads fixed.
As you can imagine, we quickly backed down from that idea. Luckily that project came in well under budget and we are carrying ahead with construction. Those savings likely won't continue, and we are in a situation where we need to still fix our aging infrastructure.
The easiest thing would be just do what we can with the money we have. Instead of doing a section of road every year, do it every two years. Based on how long roads last, and how much we would actually be doing based on the next ten years, you can see from above that delaying doesn’t make sense either.
It should also be mentioned that is we delay too long, we could end up losing the road base which would result in a lot more road repairs being a lot more expensive.
So now what?
One of the things council is considering is going to a flat charge for roads. We would have no more local improvement levies, which would be more fair, projects couldn’t be voted down, and it would make it easier for council and administration to plan ahead which could have potential cost saving measures as well.
The negative is it would be an additional amount to pay. We looked at this option about 18 months ago, but at the time was given some advice that a flat rate would need to be tied to assessment and the equation didn’t look that great.
We now have been given some new information and a flat rate could be equally shared by all and council thinks this may make better sense.
Council will be looking at it in April to come up with a plan for 2018. We have been delaying a decision on this item for the last three years and it’s time to figure something out that makes sense for current and future rate payers in town.
Although nobody gets excited about paying more money, people also don’t get excited when their roads are falling apart either. This isn’t a home run at any stretch, but I do believe we can come up with something that is fair, something that makes sense and something that we can all live with.
Stay tuned as council works through the information to sort this one out.