In the agenda for the upcoming Saskatoon City Council Executive Committee meeting is a report to council from Hemson Consulting on “Financing Growth” that council commissioned in late 2013. This report indirectly identifies an area in which provincial legislation and the actions of the city can be improved, especially with respect to Public Transit and how it is funded.
Of the ways that a city can fund its operations and capital costs the most obvious and easily identifiable to the average citizen are property taxes, user fees, and funds from higher levels of government. A less well known but significant source are development levies.
When a developer develops a new neighbourhood generally they are responsible for all the direct or “on-site” costs. Water and sewer lines, roads, sidewalks, and the like. The “off-site” costs are the city’s responsibility. Extending water and sewer trunk lines to the neighbourhood, roads and interchanges that access the neighbourhood, large recreational facilities, fire and police stations, expanding water and sewer treatment plants to handle the increased population, and so on.
Much of these “off-site” capital costs are paid for by development levies paid to the City by the developer. Under the Planning and Development Act section 169, the city is allowed to collect development levies
“…a council may impose development levies for the purpose of recovering all or a part of the municipality’s capital costs of providing, altering, expanding or upgrading the following services and facilities associated, directly or indirectly, with a proposed development:
(a) sewage, water or drainage works
(b) roadways and related infrastructure;
(d) recreational facilities.”
As detailed in the study, the City of Saskatoon could, but is not currently charging development levies for bridges, major recreational facilities, or water & sewer treatment plant expansions. If you just said “What the F$&%”, so did I. That’s right, they are not charging all the development levies they could be. Which means that those costs are being paid for by the other methods mentioned previously, namely property taxes. There’s a reason we are all now paying for a flyover and ramps so the residents of Stonebridge can get in and out of that neighbourhood via Highway 11. The City simply didn’t collect enough levies to pay for this.
A notable exclusion from the list of allowable capital costs that can be funded via development levies is Public Transit. Ontario and Nova Scotia (there may be others) specifically include Public Transit.
I propose that the Planning and Development Act be amended to specifically include Public Transit as one of the allowable capital costs that municipalities can recover though development levies.
There are a variety of Public Transit related capital costs that could be recovered, which could include:
- Transit terminal facilities
- Park and ride facilities
- Construction of separated Bus Rapid Transit (BRT) lanes
- Initial purchase of new buses sufficient to service the new neighbourhood
- Light rail stations and rail lines
If the City of Saskatoon does ever grow to the point where light rail is a viable system to begin implementing, development levies will be a key piece in the funding it will take from all levels of government to build rail based Public Transit. The City should start lobbying now.
In contrast to lobbying the Provincial Government for more general funding, increasing the amount of the PST the province shares, or specific funding allocated exclusively to Public Transit, a change to the Planning and Development act has a significant advantage. It would cost the Provincial Government nothing. Sure developers will bitch and whine, as they do already about development levies because it increases the cost of a lot or a house. But whether these costs are paid for via levies or property taxes they have to get paid.
But charging adequate development levies on new neighbourhoods as they are developed at the (current) edges of the city would also help truly reflect the cost of building and living farther away from the city. They would create a closer connection to suburban sprawl and its true cost.
Imagine if Public Transit had always been an allowable development levy, and the City had collected development levies on every new neighbourhood built in the last 50 years. Including or setting aside an amount for Public Transit long-term capital reserve fund. Imagine if, as the City plans to move to a Bus Rapid Transit system there was a $300 million dollar reserve fund available to build separated bus lanes and other BRT related infrastructure.
Imagine if residents of the soon to be developed neighbourhood of Holmwood could hop on a small neighbourhood shuttle bus, transfer to the BRT at the neighbourhood transit terminal and be whisked downtown in a separated BRT lane that bypasses the most congested section of College Drive. Including the time it takes to drop off students at the University. Holmwood to downtown, front door to desk downtown in 20 minutes. Morning rush
hour 1/3rd of an hour.
Imagine if, a hundred years from now, when commuters in East Holmwood, West Blairmore and the new neighbourhoods of Vanscoy Grove, Clavet City, Whitecap Estates, and West Sutherland are clamoring for fast, efficient light rail there was a multi-billion dollar Public Transit capital reserve fund available.
on Saskatoon, dream on.