Integrated Infrastructure Management Planning

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Urban Growth Area: Infrastructure Management Planning

The Way Ahead: Implementation Plan was created to identify key activities that would be implemented in a three year time frame (2016-2018) to ensure we continue to achieve the goals set out in the Municipal Development Plan.  The plan identified three main goals for the City of Edmonton moving forward; Economic Resilience, Open and Caring City and Sustainable City.  It outlines the 23 initiatives within each theme that will impact our strategic actions as we approach the end of the first 10-year planning cycle.   Falling under the Economic Resilience banner, the Growth Strategy Implementation was one of the initiatives that set out to address the infrastructure investment needed to plan, coordinate and monitor the impacts of our City’s growth.

On July 8th, 2015 executive committee asked administration to prepare a report outlining the Integrated Infrastructure Management Plan-Cumulative Impacts  as it relates to Edmonton’s three urban growth greenfield Area Structure Plans; Decoteau (S.E.), Horse Hill (N.E.), and Riverview (S.W.)  These three areas are expected to have a combined population of approximately 195, 025 people with a total land area of 6187 hectares.  

Cost and revenue projections: Using the Growth Modeling Framework to measure future growth and associated costs of the Urban Growth Areas over a 30-39 year time frame, the IIMP calculated the infrastructure required for new development, how it relates to existing infrastructure, and implications to the City’s operations.

Infrastructure Breakdown: The amount of infrastructure to be built by the developer and the City of Edmonton is a based on many things including; the design of the community, the service standards provided, the amount and density of population served, and any pre-existing infrastructure. Table 2 and 3 summarize the infrastructure required for the three Urban Growth Areas, their approximate costs in 2016 dollars and who is responsible for developing the infrastructure.

Expected Revenue from the development of these communities:

1. Franchise Fees: Atco Gas and Epcor Electric customers pay a user fee to the City for the use of public roadways to distribute their network.

2. Per Capita Grant Revenue: these are provincial and federal grants we receive on a per capita basis (based on existing grants available at this time)

3. User Fees: There are some user fees associated with certain City departments and business within the community such as; transit fees, recreation centre fees, and parking meters.

4. Non-Residential property tax: Once complete, these communities will offer commercially zoned areas like strip malls, convenience stores and grocery stores that will generate tax revenue for the City.  

5. Residential Property Tax: Yearly municipal taxes paid/residential unit.

Expected costs from the development of these communities:

1. Initial City Costs: this is the infrastructure funded by the City (via the capital budget) like police and fire stations, community facilities, parks and transportation/transit facilities.

2. Renewal costs: reinvestment into our infrastructure is key to maintaining acceptable standards and therefore are calculated in the overall cost of the development.  Important to note that the City is responsible for the renewal costs of both the developer funded infrastructure and the City/Province funded infrastructure. This is also funded through our capital budget.

3. Operating Costs: these are the costs that represent the on-going activities and expenses that allow the area to function properly and include both direct cost of operating the infrastructure like fuel and electricity, as well as the labour required to offer these services.  This is all funded through the City’s operating budget.

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Both Costs and Revenues over a 50 year time span are compared in this graph below:

As you can see, the projected difference in revenues and costs is $1.4 billion dollars that will require capital investment by the City.  So how does development of Urban Growth Areas effect overall growth in Edmonton?

Both Residential and Non-Residential land contribute to our City and are vital to the services a neighbourhood offers, therefore achieving balanced growth is essential.  The total property assessment value is generally 25% non-residential, however each contribute approximately 50% to the total revenue earned as non-residential assessments pay 2.5-3 times more per assessment dollar than residential assessments.  Currently the proposed greenfields are projected to have between 6.5-8.3% of their assessment as non-residential.  All of this considered, here are a few possible outcomes due to new growth within Edmonton:

• Given the City’s relatively even split of the residential/non-residential contributions, different property types in any given assessment class may experience higher increases in their taxes as the assessment values decrease or increase to maintain the City’s tax requisition.  

• Based on the analysis, in order to maintain the 25% ratio, the Urban Growth Areas would require an additional 8.3 billion in non-residential assessments throughout Edmonton. This is on top of the commercial and business employment areas within the planned communities.  Depending on further development of the Edmonton Energy and and Technology Park, it’s possible to there will be increased non-residential assessments filed.  The findings of the Industrial Land Strategy will be presented this summer.  

• If this is not achieved over the development of the area, the City may need to change the residential to non-residential tax split from an even split to higher percentages from the residential assessment base.  

• The City could also consider decreasing levels of service in some or all areas and/or look for alternate forms of funding that permit the tax levy to be supplemented.  This requires changes within the Municipal Government Act but would allow the City to charge a levy for all of the required infrastructure considered to be City and/or Provincial costs within the Urban Growth Areas. This would make up the $1.4 billion shortfall over the 50 year time frame.

• Renewal growth is important to maintain and rehabilitate existing infrastructure so it continues to meet the needs of Edmontonians.  It’s possible that we will see even further decrease in renewal infrastructure as our Urban Growth Areas will require higher investment.  We can see that investment in renewal growth has decreased from 46% in the 2012-2014 capital budget to 42% in the 2015-2018 capital budget.

• Because these greenfield areas are located on the boundaries of our City, improvements along Provincial roadways will be needed and therefore require substantial planning with adjacent municipalities and the Province to properly serve these areas.

• As of now, the Neighbourhood Structure Plans in these areas have higher densities than originally expected resulting in better revenue to cost ratios.

-- Where do you see Edmonton’s non-residential/residential ratio at?-- Would you pay higher taxes to have renewal growth if you lived in established or mature communities? Likewise, are you willing to pay higher fees or charge developers more to build complete greenfields?-- Since established and mature neighbourhoods already have the infrastructure required to service more people, therefore saving valuable land and capital, how do we encourage more growth in these areas?

Co-authored by Andrew Knack and Kasey Machin