CANMORE – A need to bulk up utility reserves for costly upcoming capital projects will likely see Canmore residents have an increase in their water and wastewater rates for the coming year and beyond.
The Town’s finance committee recommended council approve a 10.7 per cent overall increase in 2024, meaning an annual change of $68.66 or $5.72 a month. Council is set to vote on the budget at its Dec. 5 meeting.
As part of its two-year budget cycle, council had previously approved a 4.2 per cent increase in water and wastewater rates for the coming year. However, with an updated Utility Master Plan forecasting expensive infrastructure needs and the Town’s wastewater treatment plant needing a more than $100 million upgrade to meet provincial environmental regulatory needs in the next 10 years, the increase would begin to address the need to fund projects.
“Having high regulations about what we’re allowed to discharge from our wastewater treatment plant into the river is a good thing,” said Coun. Tanya Foubert said during budget talks at a November meeting.
“It’s a double-edged sword. Yes, we’re looking at a very high cost in order to deliver this service to our community, which is affected by our past decisions and regulatory changes, but ultimately it means as a community we’re cleaning up our mess and not making it someone else’s problem downstream.”
Council was previously informed of the upcoming financial needs in May at a committee of the whole meeting.
The new environmental regulations for the wastewater treatment plant would see nitrates not being put into the Bow River, meaning a denitrification process has to take place to remove a measure of organics in wastewater, said Steve Dawe, an engineer with the Calgary-based consulting firm CIMA+.
He added it would have to be converted to nitrogen gas, leading to the costly process that would have to be done in multiple stages over the next 10 years to meet environmental regulations.
However, the biological aerated filter (BAF) setup – which isn’t common in Alberta – doesn’t allow for an easy add-on for a denitrification process like newer wastewater treatment technology, Dawe noted.
“Unfortunately, there was a decision made in the [past] to go with the BAF and it works great for what it was designed to do, but now with these new limits it is difficult to adjust,” he said.
Andreas Comeau, the Town’s manager of public works, highlighted when the treatment plant was approved by a past council more than 30 years ago, there wouldn’t have been consideration for the new environmental regulations facing Canmore.
“The technology that was chosen, which was still new and went forward with that option because we don’t have a lot of space when we’re looking at our lease location, so it was the technology that had the smallest footprint,” he said, noting the lease for land with the province at the treatment site would have to be amended to fit the projected work in the coming years.
Dawe said there would also have to be a phosphorus removal process added under the new regulations, but it’s easier technology to add on to the Canmore treatment plant.
“There are a number of processes in the plant that are not going to meet the quality in the five- to 10-year range,” he said.
“The limits have changed, but I don’t think Canmore is being treated any differently than anyone else on the Bow River.”
The wastewater treatment plant came online in 1997 and is a two-stage BAF system.
If approved by council, the forecasted reserve target balance would have the utility reserve end 2028 with nearly $8.168 million in the bank. However, if council were to maintain the status quo of a 4.2 per cent increase, the necessary capital costs would deplete the reserve to an expected $1.526 million in 2028.
Town staff presented multiple options – with an increase ranging from 4.2 per cent to 18.6 per cent – but recommended the 10.7 per cent jump.
The Utility Master Plan (UMP) was originally presented to Canmore’s committee of the whole in May. Though no plans were made to have it return to council, it eventually did so in October. However, rather than approve the master plan as council’s did for its first two versions in 2010 and 2016, council accepted it for planning purposes.
The UMP is one of the vital guiding documents in the municipality’s policy portfolio. It outlines future infrastructure needs up to 25 years and is essential in informing off-site levy costs.
Council accepted it on Oct. 3, which was the same day the Court of Appeal upheld the Land and Property Rights Tribunal’s decisions to approve the Smith Creek and Three Sisters Village area structure plans. The two plans have since been approved by council.
Town staff told council since the UMP is updated roughly every five years, it wasn’t necessary to modify it due to the court upholding the tribunal’s decisions.
Town staff outlined municipal assets totalled about $1.1 billion, with $450 million tax-supported and $650 million being utility-supported. Among the utility-related assets are the water and wastewater treatment facilities, reservoirs, pumping and lift stations and drywells.
The Town has more than 115 kilometres of piping and 20,000 cubic metres of capacity for water reservoirs.
Among the long-term pricier items forecasted are $53.03 million in waterline and wastewater line upgrades between 2037-41, $21.1 million in water facility upgrades between 2029-42 and likely more than $100 million for the wastewater treatment plant upgrade.
“It’s really critical to be having those discussions and sharing that information with council now and also understanding what the impact is on the ratepayer at the same time,” said Comeau.
Though the treatment plant is expected to cost more than $100 million, Comeau said initial conversations with the province had them aware of the financial burden of regulatory changes and the need for provincial funding.
Dawe also said the Town could recoup some costs through off-site levies, which see municipalities and developers determine who pays for what infrastructure. If it’s growth-related, a developer would pay a sizeable portion, but if it’s a lifecycle replacement the municipality is primarily on the hook.
“The baseline cost for the Town is $37 million and the additional cost on top of that would be growth-related,” Dawe said.
Whitney Smithers, the Town’s general manager of municipal infrastructure, noted the off-site levy has a model for determining cost breakdowns of who pays for what.
“In the off-site levy, we break out future unit counts into residential, hotels, industrial commercial and there’s a factor for each … It does include Smith Creek and the [Three Sisters] Village ASPs, so it does reference the full build-out of the community,” she said.
Town staff and representatives for Bow Valley Builders and Developers Association met multiple times in the summer and an updated off-site levy is expected to return for council approval in the future.
However, under Section 648 of the Municipal Government Act (MGA), off-site levies are appealable to the Land and Property Rights Tribunal.
The MGA outlines six grounds an appeal can be made, including the off-site levy is unlikely to help future land occupants that are subject to the levy, the area that would benefit from the levy wasn’t determined with regulations outlined in the MGA and the levy isn’t consistent with regulations stated in the MGA.
If an appeal is made, it could be dismissed by the LPRT, but if an appeal is successful the LPRT can order the off-site levy bylaw to be fully or partially rescinded and “repassed or amended in a manner determined by the tribunal.”
Canmore has 17 off-site levy zones, with each one having a specific number of units planned for future development, redevelopment and infill. It calculates future unit count and the necessary infrastructure needed to service the areas.
The 25-year growth projections anticipate 938 more industrial and commercial units, 3,545 extra hotel units, 770 low-density residential units and 3,937 medium to high-density residential units. In the same time period, the master plan estimates an extra 202.7 hectares of land being developed.
