Solution 8: Specialized Municipality (Part 2)

I've found the opposition to this solution has three general areas:

• Values
• Taxes
• The "Black Hole" Effect

Values

The premise of all of my arguments in these blog posts has been that we are one big community who all use each other's services.

Some people do not see it that way.  The farmer out in the Goodfare area may not feel very connected to the folks in the City.  Her values may very well be different.  She might not care about her taxes funding a new park in the City, but she cares very much about drainage problems in her ditches.  The tow truck driver in the City may not value having a seniors home in Hythe.  Often this debate is formed around urban vs. rural values.

A couple things to say to this:

First, I don't believe municipalities should be formed around values.  If we did, we would have to have millions of them.  We don't create a "downtown" municipality for the urbanites or a "parks & playgrounds" municipality for young families.  Municipalities should be formed around communities of people that interact with each other on a regular basis, regardless of the diversity of values.  Even the farmer from Goodfare commutes to the City regularly for supplies and the tow truck driver has to serve customers in Hythe.

Within communities there are many values.  In a regional municipality you would want to ensure that everyone's values are reflected at the Council table.  This is why it would be crucial to have representation from all over, so that issues like ditch drainage are not passed over.  In the Regional Municipality of Wood Buffalo (which includes Fort McMurray and 9 smaller communities), Fort McMurray elects 6 councillors and the remaining areas are divided into wards which elect 4 councillors between them.  The mayor is elected at large by everyone.  I could see the RM of GP having a similar setup.

Second, a large portion of the people in the County right now are essentially living an urban lifestyle.  Living on a one-acre lot in Carriage Lane doesn't quite qualify as "country living" in my books.  Even the subdivision with 3-acre lots I grew up on 20 minutes from the city could hardly be called "rural".  Thus, I think that the belief that the County has a unique rural identity and can better serve rural interests is greatly mistaken.

Third, you don't have to give up your lifestyle as part of a specialized municipality.  Some people love living in small towns.  Some people love living on acreages.  Some love living in downtown condos.  A specialized municipality recognizes that there are these different values and helps ensure everyone can live together no matter what their lifestyle is.

Taxes

Reason 2: I don't want my taxes to go up. 

Neither do I.

There are many scenarios which could play out with tax rates.  One scenario would be to equalize all rates completely; it would look something like this:

There would be almost no change in farmland taxes.  County businesses would only see a minimal increase in their rates.  County residences would see their taxes raised by a couple points.  With that said, in an amalgamation deal you would likely have a phase in period so that all affected taxpayers would gradually move to new regional rates over a period of say, 10 years.

As for the towns and village, there would only be minimal changes as their current rates are in between the City's and County's right now and are already close to what a regional rate would likely be.  All City taxpayers, residential and business, would see a decrease in their taxes as new regional mil rates would be a point or two lower than current City rates. 

But Rory, why should I have to pay more taxes if the costs of delivery services to my acreage are less?

Good point.  There are some developments in the region that use much cheaper storm water management systems (ie. ditches) and have lower transportation costs (ex. snow removal costs are lower).  To address this, you could have a Rural Low Density tax rate for properties "x" distance from the city that would be lower to address these differences.

Also, it's important to note that if a portion of the MD's oil and gas revenues were included in the mix, there would be downward pressure on everybody's taxes.  With only 1/4 of the MD's linear and M&E revenue, we could all enjoy the rates being paid by County residents now.  No one's taxes would have to increase.

So there are many different scenarios which could play out in a regional municipality.  I believe the best scenario would have to align the level of service a resident gets with the amount of taxes they pay.  It's all a question of fairness.

The "Black Hole" Effect

Reason 3: If we're a regional municipality, the bigger urban centres would have the greatest level of representation, would dominate the agenda, and get most the resources at the expense of outlying areas.

This is a legitimate concern in any merger.  That the big partner ignores the little partners.

My response:

There are a number of ways you would ensure this doesn't happen.

Again, you would have representation from all areas, so all areas would have a voice at the Council table.

You could also set up a system of discretionary funds whereby each population centre would be ensured a certain amount of funding each year.

In Strathcona County (which includes Sherwood Park, 8 hamlets, and lots of farmland), they make sure their committee structure reflects the diversity of the municipality.  For example, it has an Agriculture Service Board to ensure the County's rural policies do not escape Council's attention.  Strathcona also has a Governance Advisory Committee which ensures bylaws and policies are working for both urban and rural residents. 

Strathcona has been an excellent model of what a regional municipality could look like.  And it hasn't been Sherwood Park-centric.  For example, the tiny hamlet of Ardrossan (population: 434) just had a $21 million dollar recreational facility built there to serve residents in the central part of the municipality. 

My personal viewpoint is that this wouldn't be much of an issue.  Most people in GP are connected to other people in the area through business, family, history, etc.  In my experience, people want the whole region to thrive.  They want the best camping facilities, the best biking trails, the best roads, the best cultural facilities.  We truly function as one community and I believe elected officials would support this vision.

There would certainly be many challenges in the creation and operation of a regional municipality.  However, there are many creative minds in our region who would come up with innovative solutions to each challenge. 

Okay Rory...I think I know where you stand...but let's hear it...what's the best solution?

Specialized Municipality.

If we want the region to grow sustainably and equitably, I believe it is the ultimate solution.  Financially it makes sense, planning-wise it makes sense, and in terms of fairness, there is no other solution that works as well.

My hope is that the other municipalities in the region would see the value in combining our strengths to grow the region as one municipal unit.  We truly function as one community.  We shouldn't have to take from one area to give to another and constantly be fighting over who gets what.  It just makes sense for our municipal systems to be aligned with reality. 

Our region is already aligned as one in many ways.  Our Chamber of Commerce serves the region, we have one Homebuilders Association, the GP Regional College, the GP Regional Hospital, and the Community Foundation of Northwestern Alberta which recently changed to reflect its service to the region. 

While a specialized municipality would be ideal in my view, in the absence of a willingness from neighbouring municipalities or the Province to explore the idea, I think a revenue sharing deal and regional planning reform would be the next ideal solutions.

And now your turn...

Which solution or solutions do you feel will best address the region's problems? What municipal system is going to best allow the region to thrive?

Solution 8: Specialized Municipality (Part 1)

Still with me?  Good.  The best is yet to come...

The Regional Municipality of Grande Prairie.  Nice ring to it eh?

The final solution I'll be looking at is becoming a specialized municipality.  Becoming a specialized municipality would mean that all 6 municipalities (and perhaps part of the MD as well) would shed their corporate identities and create a single unit.  The new Council would be formed with representatives from the whole area.

Let's look at how this could be a solution to each of problems I've listed:

Problem 1: Inequalities in who pays for services.

Wouldn't exist anymore.  All linear and M&E revenues would now flow to the new municipality to benefit all.  Everyone would be paying tax rates that reflected the services they have access to.  We wouldn't have to compete for provincial grants against one another.  Everyone would be contributing equally to the costs of the area.  Plain and simple.

Problem 2: Poor Regional Planning Decisions

Would be much better.  Without the drive to get as much development as you can so that the other guy doesn't get it, you can make much more rational planning decisions.  It would be in everyone's interest to have a coherent regional plan which identifies the best places to develop various land uses.

Problem 3: Inefficient Service Delivery

Would be greatly improved.  One Fire Department.  One Development Department.  One GIS department.  And so on.  Multiple sets of regulations condensed into one.  One set of bylaws to follow.  And service efficiencies would in the long-run lead to cost savings for everyone. 

Problem 4: An unequal playing field for development.

The playing field has been erased.  Done.

Other benefits:

Everyone would have a say in how the region grows

Everyone would have a vote in matters that concern them.  Right now I have no vote on campground funding or development in Clairmont, even though they directly affect my life.  Someone living in Whispering Ridge may own a business in downtown GP but is not able to vote in people who would support their views on downtown development.  A specialized municipality would correct that.

Economic Development

Local governments should be actively working together on attracting businesses to the region.  However, right now there is competition between municipalities to get development to reduce the tax burden on residents.  Because of this, it's not in each municipality's interest to work together on economic development, as we each want to grab the biggest piece of the pie.  Being one municipality would change that. 

Other efficiencies

A spin-off of amalgamation would be that you wouldn't necessarily need to have the Public and Peace Wapiti school boards.  If they were to combine, there could be efficiencies found there too.  For example, does it make sense to bus students living in Wedgewood across town to PWA when they could go to a public high school on the south end?

Essentially, a specialized municipality would align local governance with how people are actually living their lives.

Wow Rory...that sounds perfect!  Why isn't everyone screaming for amalgamation??

Because, it's not perfect.

Oh.

Head on over to my next post to see what the challenges are and how I feel they could be overcome.

 

Next post ----> Specialized Municipality (Part 2)

Solution 7: Dissolution

Sounds foreboding doesn't it?

Dissolution is the process by which a municipality, well, ceases to exist (not the technical definition...but it works).

There is always the option for the City, Towns and Village to choose to "dissolve".  This means that we would cease to exist as corporate identities and would become hamlets in the County.

I believe there are many positive things that could become of being one municipality, as we will see in the next post.  However, I don't believe dissolution would be the best way to do it.

By dissolving, we would be completely at the County's mercy.  The County could choose to give us a voice at the Council table, or not.  It could decide that all future development would be in Clairmont and shut Sexsmith's growth potential down, or not.  It could...you get the picture.  Essentially, there would be no negotiation...we just would no longer be there.

Of course, this option is really quite fanciful...for the City at least.  The provincial government would never approve of a municipality that's Grande Prairie's size to just dissolve.  But you could always start the process for leverage.  The City of Cold Lake asked the Province to dissolve a few years ago.  While they said no, the issue was the impetus for the Province to give the $16 million yearly tax revenue from the Air Force base from Lac La Biche County to the City.

I don't believe that this is a desirable course of action though.  To me, dissolution is the "we just give up" approach.  Besides, there is a much better way to get to the one municipality solution...

Next post -----> Solution 8: Specialized Municipality

Solution 6: Regional Planning/Growth Boards

The Province used to have a number of regional planning commissions set up across the province until they were dismantled in 1995.  Most municipal planning was directed or advised through these boards, who were appointed by the provincial government.  So if a developer wanted to subdivide some land for residential in the County, it went through the Commission.  Many of the municipal planning documents were advised by the Commission, who planned with the region in mind.

The Province could set up planning commissions like this again.  I've heard mixed reviews on how well these commissions worked.  It appears they were quite effective in establishing good planning practices across the province.  There was much greater thought that went into regional planning.  More thorough consideration was given to where the best places to locate residential/commercial/industrial areas should be in the region.  On the flipside, much local autonomy was lost.  Many planning decisions were heavily influenced by the Province and there were times where local priorities weren't reflected.  This can be the problem with one size fits all approaches.

Another option would be for the municipalities of the region to create a Regional Growth Board.  The Province has created a framework for how these boards can work.  You may be familiar with the Capital Region Board that is composed of the 24 municipalities that make up the capital region.  The Board has the mandate to create statutory planning documents such as their Growth Plan.  The Growth Plan identifies how the region will develop.  What types of housing will go where, where the industrial areas are best suited, and regional transportation networks are just some of the problems they tackle.

As you can imagine, getting 24 municipalities to all agree on a plan is a challenge to say the least.  Every municipality has its own priorities and wants to benefit from regional growth as much as the next guy.  So while this option allows for greater local involvement in regional planning, it can be very difficult to find consensus.  Growth plans can become quite broad, lacking in defined measures to direct growth.

The City and County currently have an Intermunicipal Development Plan in place that does give the City some influence in development decisions around the City's boundaries.  However, the Clairmont area is not included in this plan.  Thus another option would be to reopen the IDP and have the plan include an area "x" kms around City boundaries in order to include Clairmont.

In the absence of reform elsewhere, I think that any of these options would improve land planning in the region.

Next post ----> Solution 7: Dissolution

Solution 5: Fair Share Agreement

I think the case has been made that the additional revenue streams of rural municipalities really distort who pays for services.  By artificially keeping taxes low, it creates a host of other problems as we've seen. 

So what's the solution?

I think one of the best solutions can be found to the west, by looking to our neighbours in the BC Peace.  Since 1994, the 8 municipalities in the region have had a "Fair Share" agreement in place that shares all the industrial taxes from the area among all the municipalities.  You can find out the details here.

How could this look in the Grande Prairie region? 

In reality, there would have to be a formula created like the one in BC that takes into account assessment values, population, cost sharing agreements, etc. which would direct the funds to all the municipalities.  As I've mentioned before, I recognize that the County does have expenses related to supporting the industrial tax base.  Thus, any agreement would most definitely have to take those expenses into account. 

For simplicity sake, and just to get a rough idea how this could look, I've divided linear assessment and M&E revenues by population to see how things would shake out.

Municipality	Linear and M&E revenue (2012)	Possible Fair Share Revenue	Change in Revenue
City of GP	$2,546,693	$25,953,915	+$23,407,222
County of GP	$36,016,063	$9,595,950	-$26,420,113
Town of Beaverlodge	$84,326	$1,115,369	+$1,031,043
Town of Sexsmith	$186,882	$1,140,365	+$953,483
Town of Wembley	$23,337	$664,977	+$641,640
Village of Hythe	$0	$386,724	+$386,724

In any case, there would have to be much negotiation to come up with a formula that would take many factors into account so that everyone receives their fair share.  There would likely have to be a phase in period as well so that there's adjustment time.

I think this is one of the best options for the success of the region.  BC's fair share agreement states, "municipalities in the Peace River region provide housing, services and infrastructure that directly benefits regional industrial development."  I believe this to be the case in Grande Prairie too and as a result, we should all share in the benefits of the development. 

The Challenges

There has been much opposition to these types of arrangements from the wealthy rural municipalities.  One of the main justifications given for their opposition is that there is a cost to providing municipal services (mostly roads) for these industrial developments.  As such, they should receive the tax money associated with these developments.  While there is some truth in this argument, it is usually greatly overstated.

Studies in Alberta have shown that the costs of servicing these developments are a small fraction of the revenues they generate.  Additionally, many of these costs are often reduced as municipalities sign "road access" agreements with industry requiring them to pay for some of the construction and/or maintenance costs.  Furthermore, many of these developments are served by provincial highways which are paid for by the Province and not the municipality.  So in essence, a very large portion of these revenues are like unconditional grants...or bonus money.  It's like winning the lottery year after year after year.

As you can imagine, it is difficult to foresee the County becoming a willing partner in this type of arrangement.  These revenue-sharing agreements are not without precedent in Alberta though.  There have been many such agreements signed, especially in the last couple of years.  Many MDs and Counties have recognized that they benefit greatly from current municipal systems and have decided to share their revenue with their urban neighbours who do not have access to the same revenue. 

Our neighbours to the South, the MD of Greenview, signed an agreement last year that gives all the municipalities within their boundaries (Grande Cache, Valleyview, and Fox Creek) $2 million/year for the next 5 years.  Further south, Yellowhead County will be giving Hinton roughly $2.5 million/year and Edson $6 million/year for the next 15 years.

So while the precedent exists, there is nothing compelling the County to participate.  In the face of a willingness to share, direction must come from the provincial government.  In BC, the provincial government directed the creation of the agreement.  Obviously it was the urban municipalities that were the push behind it though.  Interestingly enough, it was also industry partners who were pushing for the agreement as they recognized the value of their tax dollars flowing into the urban centres.  Employee attraction and retention is a key aim of industry in the north and having thriving urban centres with adequate housing and great amenities helps them to achieve this.

I believe the creation of a revenue sharing agreement would be one of the best ways to address the inequalities that exist.  Revenue-sharing would allow for greater long-term financial stability in the region as all municipal partners would share in the region's wealth. 

Revenue-sharing by itself is not ideal though.  There are still regional planning issues that would have to be addressed as well as the availability of land for future City growth.  So while I would support revenue sharing, it would have to be combined with other solutions.

The Curious Case of the MD of Greenview

Up until this point I've largely left the MD of Greenview out of discussions.  The MD of Greenview is one of the largest municipalities in the province, stretching from Grovedale to Grande Cache to Fox Creek to Valleyview to Debolt.  The MD is also one of the smaller municipalities population-wise with only 5,300 people.  However, they are also one of the wealthiest.  And by wealthy, I mean fabulously rich. 

In fact, the MD pulled in $64 million in linear and M&E in 2012...that's $26 million more than the 6 other GP municipalities combined!  This allows MD of Greenview residents to pay almost the lowest residential taxes in the province...an average of $860 per dwelling.

In my intro, I included the Grovedale and Debolt areas in my calculation of the "Grande Prairie region".  Both are tied quite closely to the region with people commuting to and from the areas daily.  I have not included MD numbers in any calculations though for simplicity sake.  But let's take a look to see how numbers would roll out if they were added to the mix:

My calculations are based on one quarter of the MD's assessment.  Arguments could be made for more or less to be calculated, but I figured this would be a good starting point.

Municipality	Linear and M&E revenue (2012)	Possible Fair Share Revenue	Change in Revenue
MD of Greenview	$64,755,258	$51,892,775	-$12,862,483
City of GP	$2,546,693	$34,545,140	+$31,998,447
County of GP	$36,016,063	$12,772,386	-$23,243,677
Town of Beaverlodge	$84,326	$1,484,577	+$1,400,251
Town of Sexsmith	$186,882	$1,517,847	+$1,330,965
Town of Wembley	$23,337	$885,097	+$861,760
Village of Hythe	$0	$514,737	+$514,737

As you can see, even having only 1/4 of the MD's linear and M&E added to the mix would have a dramatic impact on revenues.

Next post ----> Solution 6: Regional Planning/Growth Boards

Solution 4: Cost Sharing

Another way to address the imbalance in who pays for services is to have cost-sharing agreements in place between municipalities.

The City has a number of such agreements in place.  For example, the costs of helping to  run the Library, the Museum, the South Peace Regional Archives, and many non-profit agencies are shared among neighbouring municipalities. 

There's a lot more that could be done though.

One area in which we are working is recreation.  The City and County have a joint recreation board which looks at recreation planning in the region, but has also began to look at recreation costs in the region.  The last Councils looked at what each municipality contributes towards recreation in the region and found the following:

Municipality	$ spent per capita on recreational capital projects (2002-2013)	$ spent per capita on recreation - operational (2013)
City of GP	$2,850	$186
County of GP	$2,510	$35

 To the County's credit, they had recognized that they should be contributing more to the region's recreational costs and gave $5 million to the Beaverlodge pool and $0.25 million to the Eastlink Centre as well as building the Sportsplex.  There still is quite the gap that exists though, especially in regards to yearly operational spending.

The County used to provide $200,000/year to the City to help pay for the Leisure Centre.  This was suspended when the Eastlink Centre was built.  We are going to be asking the County if they would commit to operational dollars again.  This would be a good place to help address the gap, especially given the location of the two County schools who will directly benefit from the facility.

Cost sharing is also a way to reduce inefficiencies.  For example, sharing the cost of one fire department is much more efficient than having multiple.

Cost sharing can be a good option to help address some of the imbalances we have.  I think it's an alright solution for now, in the absence of any meaningful reform on revenue.  However, cost sharing can be a fickle measure as funding can be withdrawn once agreements come to an end.  They really depend on the Council of the day.  And it can be quite the tedious process identifying where all the gaps lie.

I don't really see cost sharing as a needed solution though.  As I pointed out in Problem 1, all municipalities in the area are roughly paying their share of regional services.  While the City pays more in recreation, the County pays more in transportation.  The greatest imbalance lies on the revenue side, to which I will now turn...

Next post ----> Solution 5: Fair Share Agreement

Solution 3: Make 'Em Pay!

If one of our problems is that people are not paying their share of regional services, a solution could be that we make them pay.

What would this look like?

The City and Towns could make non-urban residents pay more for the services they provide.  Realistically, we could jack the user fees on all our recreational facilities and then give anyone who lives in the urban centres a card entitling them to steep discounts.  We could also do this for paid services at our RCMP detachment (like criminal record checks).

Unrealistically, we could put toll booths at the entrances of the urban municipalities and charge non-urban residents a fee to use our streets and parks and trails (like national parks do). 

These options would provide an additional revenue stream to the urbans and would reduce the tax burden on their taxpayers.

I don't think these are very good ideas though.  We are one region and I believe the services each municipality provides should be accessible to everyone in the region equally.  These options would not show we're good regional partners and there could even be a backlash with urban residents having to pay more for services located outside their boundaries such as campgrounds.  Besides, the administrative nightmare and the costs of setting these systems up would in themselves be enough to dissuade us from these options.  Also, the additional revenue user fees could generate would be fairly minimal and would only make a tiny dent in overall revenues.

The only value I see in this option would be that it would create a realization among the public of the regional inequalities.  It would only be a tool used to get us to other reforms and I would only support it as a last resort if progress is not made elsewhere.

Next post ----> Solution 4: Cost Sharing

Solution 2: Changes to Provincial Legislation/Funding

Given that municipalities are creatures of the Province, there are number of things they can change to address the imbalances.

One of the most impactful changes to provincial legislation would be changes to the policing funding formula.

Policing Formula

The formula which allows Counties and MDs to receive free policing is outdated and unfair.  Back in the day, the rural municipalities in the Province used to be composed of farmland and not much else...and they didn't have a whole lot of tax revenue.  So it made sense for the Province to pay for policing services, because they just didn't have the capacity to do it themselves.

Flash forward to 2013 and the story is a whole lot different.  Many Counties and MDs in Alberta have scores of oil and gas money flowing into their coffers.  In fact, with the money the County of GP receives from only linear assessment, they could pay for two police departments the size of the City's.  Thus, I believe a new formula should be developed that takes into account a municipality's ability to pay.

A move like this would provide greater equality in who pays for municipal services in the area.

Provincial Grants

When it comes to provincial grants, the Province needs to be more equitable in how it hands them out.  My belief is that since we all pay the same provincial taxes regardless of which municipality we live in, we should receive the same benefits when the Province spends our money. 

 

Now I recognize that money flowing to the region does benefit everyone regardless of which municipality it goes to.  However, a great deal of that money goes to things like roads and bridges and storm water management systems which are critical to economic development.  So when one municipality receives more per capita to pay for this infrastructure, they are being given a leg up when it comes to attracting development. Having one municipality receive 40% more per person is simply unacceptable in my books.

Defining of Roles and Relationships

Right now the Province lets pretty much any municipality develop whatever they want, wherever they want (with a few stipulations...environmental and such).  What if there was a recognition that urban and rural municipalities have different functions and should be developed differently?  For example, you could say that urban centres are the primary service centres where people live and shop; rural areas are primarily for farmland, resource extraction, and country living.

Once roles are defined, there could be a number of ways the Province could organize municipalities.  For example, they could draw boundary lines around all the commercial and residential subdivisions surrounding urban centres and include them in the urban municipality.  You could then put in rules which would not allow rural municipalities to develop higher density residential areas or commercial centres.  On the flipside, you could require all heavy industrial development to be located in rural areas.  

A solution like this would require the Province to set up a system where they overrule municipal planning documents.  While this could help provide better regional planning, there would be a loss of local control.  I think this solution has some merit, but that there are probably better regional planning solutions as we shall see.

Next post-----> Solution 3: Make 'Em Pay!

Solution 1: Annexation

Annexation is the process by which one municipality expands its jurisdictional boundaries into that of another.  Typically annexations take place when an urban centre is experiencing much growth and needs to expand to allow for increased residential and commercial developments.

Given the City's massive growth, we are at the point where we need to expand our boundaries again.  I see that there are two ways annexation could go in regards to the City annexing from the County.

1. The Tax Grab

The City could propose to the Municipal Government Board (MGB) that we take jurisdictional control over all of the developed areas surrounding the City.

This would significantly tip some scales.  The City would immediately have a significant inflow of revenues from all the assessment that's located there.  Tax rates would become more equalized.  It would help with regional planning as we could have a coherent regional plan controlled by one player.  Finally, it would give the City additional developable land to grow.  A move like this would also put us on more of an even playing field.

This is a highly unlikely scenario though.  The Province frowns upon tax grabs and would never approve a proposal like this in a million years.  Even if there was the off chance of something like this being approved, I don't think that having the County develop lands to then be taken over by the City is a fair policy.  I believe there are better solutions to share the region's wealth.  We'll explore these later on.

2. Development Potential

The second annexation option is to annex land that is not developed but has development potential.  This is the option the City has taken. 

In 2010, the City and County agreed upon an Intermunicipal Development Plan (IDP) that identified which areas the City would annex.  Annexation negotiations then began in August 2012.  A deal amenable to both parties could not be found so the City and County have sent separate proposals to the MGB for consideration.  The MGB will meet in October to hear from both sides and then make a decision.

From the City's side, we're asking to annex the full 6,300 hectares that was outlined in the IDP. (see yellow area above).  You can read our growth projections here to see how we justify this number.  One of the determining factors in this calculation was the potential for industrial development.  Currently, the County has 0.21 hectares of developable land for every person living in the County.  The City currently has 0.01 hectares/person.  Our proposal would bring that ratio up to 0.05 hectares/person, roughly one quarter of the County's.

The agreed upon annexation lands include the area where the new highway bypass will be going through.  Having jurisdiction over lands surrounding the bypass will be beneficial to the City as there will likely be lots of development springing up there.

I have been in favour of this proposal from the get-go.  I believe it solves the availability and location of land problems.  While servicing the land is going to cost the City a little more in the short term, the long term pay-off will be crucial as we work to get more development in the City.  Annexation is only a band-aid solution though.  There would still remain many inequalities in the region.  Thus, I believe other solutions are needed in addition.

Next post -----> Solution 2: Changes to Provincial Legislation/Funding

Solutions

Hey! You've stayed with me this far.  Congrats!

So if my arguments have made any sense, the Grande Prairie region has a few issues to work out.  Fortunately, there are quite a few solutions to our ills:

• Annexation
• Changes to Provincial Legislation/Funding
• Make 'em pay
• Cost sharing
• Fair share agreement
• Regional planning/growth boards
• Dissolution
• Specialized Municipality

In each post I will explain what the solution means, discuss the merits of the option and give my personal opinion on it.  Note that these solutions are not exclusive and that the best solution may be a combination of them.  Perhaps the best solution's not even listed here...(your commentary is greatly welcomed). 

A final note: I want to find the solutions that will be the best for the region.  As I've repeatedly mentioned, not many people care about or even know where the lines are drawn.  We all want to be able to raise families, start businesses, have fun, and yes, even thrive the best we can in the region.  So the question is: how are we going to get there?

The journey continues...

 

Next Post ----> Solution 1: Annexation

Problem 4: An Unequal Playing Field to Attract Development

For the better part of the past century, it was the urban centres in Alberta who attracted the lion's share of development in the Peace Country.  A couple of decades ago that began to change.  Rural municipalities have now taken a more active role in developing their lands...and I can't blame them.  Every municipality wants to provide the best services possible while keeping taxes as low as they can.  To do this, we compete with each other to attract development in order to increase our tax base and achieve economies of scale.

So what, Rory?  Municipalities all over the world compete with one another.  What's the problem?

What's the Problem?

Anywhere there is competition, I believe all the competitors need to be playing on an even playing field.  The problem is that in Alberta, this is not the case.  The problem is exacerbated in the Grande Prairie region.

Right now, the County has an upper hand when it comes to attracting development.  There are several reasons for this:

• Availability of land
• Location of land
• Development costs
• Property taxes

Availability of Land

Quite simply, the County has large swaths of land that they can allow to develop which the urban centres do not.  This has given them the flexibility to offer a wide variety of development options, in a number of places.

Location of Land

Proximity to key transportation corridors is a prime factor for industrial and commercial development.  Proximity to major service centres is another key factor.  The County is in a position where they can capitalize on both.  And they have.  You can find many industrial/commercial developments surrounding the City along every major roadway.

Development costs

The County has traditionally had lower development standards than the City which cost developers less.  The City has brought some of our standards in line with the County to be more competitive.  For example, sidewalks are no longer required in rural industrial areas.  On others, we have chosen to not lower our standards, particularly on the engineering side.  We feel that our higher standards (for road composition for example) will ensure longer-term value for the City and taxpayers (because it'll be taxpayers on the hook when the roads start to crumble).

While there may still be areas that we can relax standards, there are others where we feel the race to the bottom for short-term gain is ill-advised.

Property Taxes

The County is able to offer lower property tax rates than the urban municipalities.  Obviously, this provides an incentive to develop there. 

So why are the City's taxes higher?  You could go with the oft-heard response that City Councillors all spend like drunken sailors...but I like to think that the answer is a little more nuanced than that.

So does the City spend more?  Well yes, it did spend about $288 million more than the County between 2009 and 2012.  But how does that break down per person?  Over that time period, the City spent about $9,400 per City resident while the County spent $11,200 per County resident. 

So if the County is spending more per person than the City, why are our taxes so much higher?  Well it largely gets back to the data I presented in Problem #1.  The County has a significant number of additional revenue sources that the urban centres do not have access to.  These revenues significantly reduce the tax burden on commercial and residential properties.

An important note: just because we are disadvantaged in this area, it does not mean that we can just sit back idly blaming the system for everything.  We always need to be cognizant of the tax burden and make wise financial decisions with that in mind.

So all together, the County has quite the leg up when it comes to attracting development. 

What's wrong with an uneven playing field?

The problem that this uneven playing field has lead to is that the County has been able to attract development at a much greater rate than the urban municipalities, mostly in non-residential developments.  Ten years ago, the value of the City's residential and business assessment* (excluding linear and M&E) was $2.2 billion and composed 68% of the region's assessment.  The County's was $0.8 billion and composed 27% of the region.

Flash forward to 2013, the City's assessment has grown by 96% and is now worth $6.9 billion.  That's impressive in its own right.  However, the County has seen a staggering 343% increase and now has an assessment value of $3.9 billion.

Municipality	Assessment Value (2003)	Assessment Value (2013)	Percent Increase
City of GP	$2.2 billion	$6.9 billion	96%
County of GP	$0.8 billion	$3.9 billion	343%

Municipality	Share of Region's Assessment (2003)	Share of Region's Assessment (2013)
City of GP	68%	61%
County of GP	27%	34%

 Note: Changes in the share of the regional population have been negligible over this time. County's share in 2003: 25%, City's share: 65%; 2013, County: 25%, City: 67%

In only 10 years, the County has seen its share of regional assessment increase from just over a quarter to just over a third.

Now don't get me wrong, this growth has been great for the region.  Jobs are aplenty up here, wages are among the top in the country and entrepreneurs can flourish regardless of which municipality they live in.

But here's the issue: as a municipality's assessment grows at a greater rate than neighbouring municipalities, so does their tax revenues.  If the additional tax revenue is not needed to pay for increased services, taxes can be kept low.  Lower taxes make it more attractive for development, which increases assessment...and the cycle goes on.

Much to the delight of all my family and friends who live in the County, businesses and residents there have seen very minimal tax increases in the last few years. 

Without changes to the system, these inequalities will continue to persist and worsen.  Luckily, there are many solutions to this problem.

 Next post ----> Solutions

*Note: I've lumped residential and business assessment together in this analysis for simplicity sake.  There is value in looking at them separately as they each provide different types of revenue and the costs associated with servicing each class are different.  It is often noted that the cost of servicing residential areas are much higher than servicing businesses.  I believe further study would show that this highlights further inequality.