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The cost of inheritance: city studies impact of repairing infrastructure in recently annexed lands

Projected annual tax increase due to annexation could range from 0.4 per cent to 2.9 per cent, according to the city’s Financial Impact Assessment published in 2020.
The City of St. Albert is now in the process of incorporating the assets it inherited from Sturgeon County into its budgeting process. RACHEL NARVEY/St. Albert Gazette

A deteriorating bridge located on Range Road 255 is now closed, and the cost to fix it falls on St. Albert’s shoulders.

The bridge — located south of Township Road 544 — is one of many assets the city inherited from Sturgeon County after annexing 3,700 acres of land in the northwest on Jan. 1.  

Inspectors found safety concerns with the bridge while conducting a routine inspection on Sept. 28 and reduced it to one lane with a weight limit of three tonnes. The bridge has since been fully closed because motorists were not respecting the weight restriction, city-spokesperson Cory Sinclair said in an email. 

As for the safety concerns, Sinclair said there is twisting on one of the structures connecting the deck of the bridge to the ground — known as the abutment — as well as splits and rots in the wood piles.

“The engineering judgment was that it was reasonable to have light traffic through a partial closure with the inclusion of monthly inspection and mitigation measurements,” Sinclair said in the email.   

“We’re faced with quite a large bill to fix [the bridge] and I’m worried about the future of other projects,” Mayor Cathy Heron said at an Oct. 3 council meeting. 

The city is still evaluating the cost of repairing or replacing the bridge. Once the cost is determined, a request will come before council.

Kristina Peter, St. Albert’s planning branch manager, told Heron examining each asset within the annexation area was outside the scope and budget of the annexation.

Instead, she said the city used as much information as it could from Sturgeon County to determine the impact of taking on new infrastructure. 

Annexation to contribute to annual tax impact

The projected annual tax increase from annexation could range from 0.4 per cent to 2.9 per cent, according to the city’s Financial Impact Assessment published in 2020.

The city would not grant an interview about the assets it has inherited, but in an email Sinclair said the city’s newly annexed infrastructure is now being incorporated into ongoing inspection programs.

When it comes to bridges, major assets are examined every year, whereas minor bridges are examined every two to three years, he said. 

Roads come with costs

According to the city of St. Albert’s 2023 draft budget, new road maintenance equipment will be required in 2023 for the additional rural and gravel roads the city has taken on. 

The city has inherited 11 kilometres of gravel roads and 7.5 kilometres of paved roads as part of annexation, administration said in the draft budget. 

Now as part of the budget process, council will consider funding a new truck plow and sander which will cost some $365,00, and a $590,000 grader for use in the summer and winter. Both pieces of equipment are needed to maintain the roads in the annexation land. 

Additionally, the city is asking for a new full-time staff position to operate the grader, at a cost of $93,500. 

Council members will pose questions of administration about the budget on Nov. 3 and 7, with deliberation beginning Nov. 29. 

More cities taking on rural infrastructure

“More and more annexing municipalities in Alberta are becoming partially rural,” said Sandeep Agrawal, a University of Alberta planning expert studying annexation in Alberta. 

“This means more urban municipalities are having to learn how to manage rural lands, which can often cost more, with the additional cost being applied to the existing tax base.”

However, over time, Agrawal said his studies have shown these additional costs are recouped through money the municipality makes off the land once developed, because of the additional tax base the land eventually brings. 

Municipalities in Alberta annex for several reasons, he said, with examples including stocking up on land to support future growth, creating a strategic buffer for rural counterparts in their jurisdiction, and to diversify their revenue bases by encouraging more commercial and industrial development. 

In 2012, the City of Airdrie annexed some 12,640 acres of land to the west, north, and east of former city limits from Rocky View County.

“We’re a rapidly growing municipality, and we wanted to make sure that … we could make the best long-term decisions with an appropriate land base,” said Lorne Stevens, director of community infrastructure for the City of Airdrie. 

When taking on new infrastructure as part of the annexation, Stevens said often “what you got is what you got.”

“In some cases there wasn’t abundant information available,” Stevens said, though he added there were some ways for the city to parse the details of the new assets, such as existing culvert and bridge inspections.

After Airdrie gathered more information about the infrastructure, Stevens said the total adjustment to the city’s operating budget was in the range of $200-300,000 a year. 

“That was an eyes-wide-open decision from our council to understand the financial profile of annexation,” Stevens said.  

The City of St. Albert is now in the process of incorporating the assets it inherited from Sturgeon County into its budgeting process. 

“The initial review of assets will be completed in 2022, which will then be incorporated into the 2024 capital budget process to fund the ongoing maintenance,” Sinclair said in an email. 

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