StormWater Utility

This page was last updated on Jan 23, 2024

This is my personal page. All opinions or inaccuracies on this page belong to me, not Council or the City. Before reading further, I’d encourage you to checkout the City’s official information at www.cityofgp.com/stormwaterutility

The City operates catch basins, pipes, ponds, and other infrastructure to manage rain and meltwater. This costs the City approximately $8,200,000 per year. A conversation currently happening in our community: how this storm water management should be funded.

Since 2019, Council has been doing work to reduce taxes by moving towards a Stormwater Utility Model.

Currently, Grande Prairie’s stormwater infrastructure is funded through property taxes and infrastructure grants. This accounts for approximately 5% of our tax bills (~$155 per year for an average home). Because it is tax based, dow much each property contributes to stormwater is determined by how much that property is worth, not by its impact on our storm system.

Many other municipalities fund stormwater services through a utility model. Rather than storm water costs being lumped in with taxes, they are paid for by a separate bill. Stormwater bills are often determined by how much storm water service a property requires.

During recent budget deliberations, Council decided to adopt a Stormwater Utility system in 2024. Under this system, stormwater services will no longer be funded through property taxes. This allows less taxes to be collected. However, every property will begin receiving a bill based on how much impermeable (ie: hard) surface it has.

Over the next couple of weeks, Council needs to decide how to implement this new system.

Below is more information and some thoughts from my perspective. But this is my personal website. Please go to the City website to read what our staff have to say. You can find information about the Utility Model and previous public engagement sessions at engage.cityofgp.com/stormwaterutility.

Stormwater utility Model: pros and cons

There are both advantages and disadvantages of funding stormwater through a utility bill rather than tax revenue.

Some advantages I see:

• Increased fairness: properties with a lot of impervious surface (ie: parking lots, driveways, most roofs) shed a lot of water. To prevent flooding, they require a lot more infrastructure than properties with lots of green space or engineering (ie: catch basins, ponds, etc.) to absorb water. When stormwater is funded through taxes, payments from properties that absorb water subsidize properties that shed water. With a Utility Model, we can charge more to properties with lots of impervious surface and less to properties with lots of green space. Properties will pay for the stormwater services they actually consume. This could be more fair than our current approach.

• Lower residential taxes: There are many types of commercial properties with low assessment values (so low tax bills) and huge amounts of impermeable surface. Despite having low tax bills, they consume a lot of stormwater service. This means that they are subsidized by properties with higher assessment values (so higher tax bills) and lots of green space. When we switch to a Stormwater Utility model, we will charge properties an amount linked to the stormwater services they actually consume. This will lead to most residential (and some commercial) properties paying less taxes.

• Less City subsidization of regional services: One challenge the City has: we host large, provincially owned regional facilities. Most people they serve do not pay taxes to the City. Examples include the hospitals, court house, and Polytechnic. These facilities require expensive City services, including stormwater management. And they don’t pay taxes to the City. But these buildings will pay under Stormwater Utility model. Which will decrease the financial support City taxpayers provide to the these regional facilities.

• Encourages better environmental practices: The environment is best served if water is retained on individual properties rather than sent into our storm system. Periodic storm surges contribute to erosion along the Bear Creek corridor. And despite the City investing to keep storm water as clean as possible, it inevitably carries sediment and contaminants. Having a Utility Model could financially reward property owners who maintain green space or take other steps to contain stormwater. This will benefit the environment.

• Encourages less use of public infrastructure: If properties retain more water, they put less cost onto our stormwater system. Under a Utility Model, properties will be financially rewarded for doing this. This will help the City limit its infrastructure need.

• Ensures transparent and adequate funding for our storm system: Right now, it is hard for residents to see how much money we collect and spend on our stormwater systems. This is also the City asset class I worry most about: personally, I don’t think we have a good long-term financial plan in place to replace aging drainage systems. Charging properties for a Stormwater Utility will create a dedicated pot of money that will have to be spent on stormwater management. It will be easier for residents to see what we are doing with this money. And Council could better plan for the long term financial needs of our stormwater system.

• More accurate comparison to other municipalities: Residents and businesses regularly compare our tax rates to other municipalities. Our per-capita expenses are slightly below average. But Grande Prairie has a higher tax rate than many other communities. These relatively high tax rates can discourage business investment in our community and people moving to the City. However, there are many communities that have much lower taxes because they fund stormwater through utility bills rather than taxes. But this utility bill never gets included in analysis of comparative taxes. By also removing stormwater from our taxes, we could be more accurately compared to communities that have adopted a Stormwater Utility Model. This will encourage investment and confidence in our community.

Of course, everything has downsides. Depending on your perspectives, some potential cons to a Stormwater Utility Model include:

• Administration costs: There will be costs to generating and collecting stormwater bills.

• Cost to schools and non-profits: Schools and many non-profits don’t pay property taxes. These properties currently get most municipal services, including stormwater management, for free. Sending them a utility bill will introduce a new cost. Although it is worth noting that they pay these costs in many other municipalities.

• Some properties will pay more than they pay today: Properties with less impermeable surface will pay less. The consequence of that: other properties will have to pay more. Generally, residential properties and some and commercial properties with high assessment values will see net savings while some commercial and industrial properties will see net costs.

• Emotional cost: Most of us hate getting utility bills. Especially these days. Getting an extra bill will carry an emotional cost for some, even if it results in them paying less money overall than they are paying today.

What wILL a stormwater utility model look like?

Last year, Council directed Administration to create the necessary Bylaw and policies needed to implement a Stormwater Utility System. During November budget deliberations, Council directed Administration to build revenues from a Stormwater Utility System into the City budget. However, a lot of work still needed to be done. Over the next couple of months, Council will be finalizing the details. Properties will begin paying for Storm water charges in July.

At the January 23, 2024 Operational Services Committee, a potential model was presented. Some information about it:

Revenue Neutral

When a Utility Model is implemented, stormwater systems will no longer be funded through tax revenue. All properties will pay less taxes than they would have to pay if we continued with the status quo.

However, to make up for this revenue, property owners will receive a Stormwater Utility bill. This bill will be based on impermeable surface area. Properties that have more parking lots, driveways, hard roofs, and other services which shed water will pay more than properties which contain water.

Council has directed that this new way of financing stormwater be revenue neutral and clearly reported. Every dollar collected for stormwater will be used to operate and improve the stormwater system, not to fund other City programs. Every year, there will be a financial report published to demonstrate that this is happening.

The Bills

For properties that already receive an Aquatera Bill, the Stormwater charge will be added to it. However, important to know: the City is working with Aquatera to simplify billing. There is no change in the ownership or operations of the stormwater system. These systems will continue to be owned and operated by the City.

So what will your property pay?

Council still needs to decide that. But what is being proposed:

A flat rate for all single unit residential properties.

A tiered rate for all high density residential properties and all non-residential properties. This tiered rate would be based on “billing units” based on the hard surface present on the property. Each billing unit would be 150 meters squared, which is the equal to the hard surface present on an average residential property. Properties would be charged based on how many billing units of hard surface they have.

There have been four rate structures created for Council to choose between. You can see the potential rate structures here (the top right square is what was recommended by City Administration):

The revenue that will be collected from this system equates to a tax reduction of ~5%.

When tax savings are compared with utility bill amounts, some properties will have net savings while some will have net increased costs. This is because what they contribute to our stormwater system will no longer be solely based on what a property is worth. Instead, it will be based on the strain each property puts on our stormwater system. Most properties will pay less in stormwater fees than they will save in taxes.

In general: properties that are worth a lot but have limited hard surfaces will pay less than they pay today. Properties that have low worth but lots of hard surface will pay more. An average residential home would see net savings: it will pay less in stormwater charges than it would have to pay if we continued to fund storm water through tax revenue.

In practice: most residential properties will see net savings, especially if they are high density. Commercial and industrial properties will be a mixed bag.

One last thing to know: there will be opportunity for large properties which make substantial investment to either significantly lessen or materially purify the stormwater they shed to apply for a credit to lessen their stormwater fees.

My Take

This conversation isn’t new. Myself and other Councillors have been talking about it for years. Some examples:

• Here is a blog post I wrote in 2019. Here is a news article from the same time.

• Advocating for a Stormwater Utility Model was in my platform last election.

• Here is an article based on a recent media interview.

I look forward to future conversations, and am always open to having my mind changed. But right now, I support the actions Council has taken to move towards a Stormwater Utility Model.

Why I Support In General

Above, I listed all the reasons why a Stormwater Utility Model could be good for our community. But the biggest one for me: controlling our tax rates.

I hear from residents again and again that they want our taxes to be brought more in line with other communities. This is important for building confidence in our community. I also think that our relatively high taxes can dampen investment and discourage people from moving here.

Here are how our residential taxes compare to other municipalities:

Over the last few years, Council has put great focus on our tax rates. An average residential property will only pay 2% more in 2024 than it paid in 2017. We’ve accomplished this despite ~15% inflation, ballooning RCMP costs and cut revenue from the province. How we have accomplished that has been through decreased spending.

However, our taxes aren’t high because of spending. Here is how our per-capita spending compares to other municipalities:

Our per-capita spending is a lot closer to average than our residential taxes.

So then, why are our residential taxes so much higher than other places? Because of where we generate revenue.

Historically, we’ve collected a high percentage of our revenue from residential taxes instead of other revenue sources. A Stormwater Utility Model is one major source of revenue that does not exist in Grande Prairie but has been adopted in many other municipalities. Funding stormwater management through a utility bill rather than taxes will allow us to collect about 5% less in taxes than we would otherwise need to run municipal services. This will go a long way towards making sure that our taxes are in line with other communities.

For me, this conversation is about far more than just stormwater. It is a more fundamental question about City finances. Should we continue to put a huge portion of our fiscal needs onto the tax base, or should we open other sources of revenue? I think we should put less fiscal burden on taxes. Therefore, I support a Stormwater Utility Model.

What Tier System Should We Use?

When it comes to picking what Tier System to adopt, Council needs to decide how to treat the commercial and industrial properties with the largest amount of impermeable surface. Many of these big properties will face larger net costs than they face today, which could impact viability and willingness to invest in our community. Additionally, there are questions of fairness when it comes to very large properties. Most of the stormwater costs (ex: pipe and catchbasin maintenance/replacement) are very correlated to how much hard surface are on a property. But some (ex: cleaning streets to keep the storm system clean) are not as correlated to hard surface. How big a portion of the total storm system should these large properties pay?

It is proposed that Council adopt a Tier System (top right in the table of potential tiers above) that caps out at 100 Billing Units, meaning that no property will pay more than $916.05/month. This is good for large commercial and industrial properties, but has the consequence or residential and smaller commercial properties paying more.

Personally, I would prefer the option to cap out at 200 Billing Units (bottom left). This will have a larger impact on our biggest properties. However, it would see a lower cost on residential properties and non-residential properties with 30 Billing Units (4500 m2) or less. I think this option better balances the needs of large business with the needs of residents and small businesses.

I’d love to hear yours thoughts.

Do you agree with my thinking? Do you have push back on it? Do you have any other ideas Council should be considering?

You can email me at dbressey@cityofgp.com or call me at 780-402-4166. I participate in a lot of discussions in the GP Round Table Facebook group. I’m also always happy to meet for coffee.

And if you haven’t already, please do checkout the City’s official information at www.cityofgp.com/stormwaterutility

Thanks for taking the time to read!

-Dylan