Developing the city's annexed lands using smart growth principles could lead to annual property tax hikes of at least six per cent, a prospect that worries Mayor Nolan Crouse.
City council on Monday received the final reports and research into the proposed smart growth principles, which go up for debate this spring.
Part of the report includes a fiscal analysis, which shows the cost of smart growth is about $4.2 million more a year in capital costs over conventional development. Crouse said the costs equate to an annual property tax increase of 6.4 per cent a year if the city was unable to find other means of covering the tab.
"If we didn't go into debt or have additional grant money, this $4.2 million will have to come out of the taxpayers' pockets," said Crouse, who was alarmed by the dollar figure and what it means to capital planning.
"It places a greater reliance on other source revenues. If we are going to fund this from a long-term model, should we start putting money into reserves in 2011, and what kind of a tax increase? We can't have our cake and eat it too, I guess."
For the past several months, council has been studying smart growth to determine if it would be a good fit in the undeveloped annexed lands.
The concept refers to a package of design strategies meant to reduce urban sprawl. The focus is on more compact development, walkable neighbourhoods, mixed developments and easy access to transit, shopping and business.
Costs balance out
City manager Bill Holtby pointed out even though the initial costs are higher, the fiscal analysis does show a modest overall benefit in the end.
Under smart growth projections the population would almost double, growing by 50,396 — 87 per cent more compared to conventional growth. It would take 30 years to fully develop the annexed lands with conventional growth compared to 48 years with smart growth.
At full build-out, municipal property tax rates are projected to be 7.8 per cent lower with smart growth than the conventional growth scenario. This relates to a difference in municipal operating costs of $4.9 million.
Public survey
To help get a feel for what residents of St. Albert think of smart growth, the city conducted a public survey among 600 participants via a phone survey. Respondents were then directed to the city's website where they viewed examples of smart growth development and provided feedback.
The study showed there is a preference for smart growth development both for the neighbourhood and shopping areas.
For future development in St. Albert, two-thirds of the respondents said they prefer smart growth street designs, while three-quarters prefer smart growth approaches to park development. Some 70 per cent indicated they would prefer smart growth shopping areas that face the street.
On average, nearly 50 per cent preferred smart growth housing options, although the number strongly preferring them was considerably lower than other categories.
The survey also included a web survey of 38 individuals, along with discussions among four focus groups.
Given the new fiscal realities, Crouse wondered aloud whether the survey should have included the question 'would you be willing to increase taxes by six per cent over the next 40 years?'
What's next?
Now that all the research and data into smart growth has been released, administration will spend the next month preparing recommendations for city council by March 1.
The issue will then be referred to the public through a series of open houses. Council isn't expected to make a final decision on smart growth until early April.
Council can put a halt to the proceedings at any time, but so far the majority are satisfied with the work done thus far.
"I am most pleased to see the public meetings in place and open houses," said Coun. Lorie Garritty. "I am very comfortable with the process here. Let's continue until we at least get the full pubic input."
