Communication and Structural Flaws in the St. Albert Planning Process

To: Mayor Nolan Crouse and Members of City Council                       November 8, 2010

From: Richard Plain

Subject: Communication and Structural Flaws in the City Planning Process

Introduction:

Given the results of the public input received in the last election, Mayor Crouse has taken the initiative and asked Council to address ways of  improving the existing city public involvement and communication process by January 4. 

The City Administration has identified certain blocks of Council time in November and December that could be used to deal with this matter.  It has also indicated:

“…it is necessary to understand the objectives and policy issues that are driving the need for a broad review of many community communication and consultation processes…”

The purpose of my submission to Council is to indicate there is a structural flaw in the Council and Administrations organizational structure that is at the heart of much of the non-financial concerns that are being evidenced by the citizens of St. Albert.

It is suggested that if the new City council makes an in-principle decision dealing with  rectifying the structural problem that many of the council communication and public participation issues will be focused and located in a venue the Council and administration has used in the past to deal with complex public representation and communication matters.

The Nature of the Structural Flaw in the City of St. Albert’s Organizational Structure

A quick review of the existing City website indicates the City of St. Albert has invited citizens to apply for positions on the following boards and committees:

(1) Assessment Review Board; (2) Community Services Advisory Board;

(3) Environmental Advisory Board; (4) Library board; (5) St. Albert Economic Development Advisory Committee; and (6)  Sub-division and Development Appeal Board.

The closing date for the applications was Nov. 5.

The above committees are examples of the belief held by the past council and their predecessors that citizens at large and members of council should pool their talents and skills and work together in furthering the interests of St. Albert residents in a wide range of endeavours ranging from social services, the environment and economic development.

Some of the members of the present Council have served on such committees and know how important it is to have members of the community at large working together in a partnership arrangement with their elected representatives in order to deal with important social economic and environmental matters and challenges facing the City. 

Members of Council who have been appointed to such committees and boards also know how much their detailed background knowledge helps other members of Council in assessing the merits of the recommendations and proposals that end-up being put on a Council agenda. 

As matters currently stand unless something is changed city council will not have the same detailed input, understanding and oversight into planning and development matters that Council currently receives from members serving on other key council standing committees.  Nor will members of the public have the opportunity to make the type of detailed representation on planning and development matters that they can in other committee venues.

The facts of the matter are that unless the present council makes a policy decision and directs the administration to re-establish a planning commission or a planning board or committee the existing status quo will prevail and public input into the planning and development process is St. Albert will be relegated to second class status compared to the public input that exists in areas such as the environment, economic development, social services and library.  

The consequence of forcing all the public input process either through developers at their public meetings and the council political process has led to some of the most lengthy frustrating public hearings that anyone has witnessed in the history of the city for  decades. 

The high quality residential character of modern day St. Albert was planned and developed in a setting that stressed the importance of a community planning framework that included both a Municipal Planning Commission involving extensive public input as well as a City Administration and City Council approval process.  This system lasted for over 30 years.

The partnership approach towards community planning involved both elected and non-elected representatives working with senior administrators in overseeing the subdivision process as well as making recommendations to Council on statutory matters pertaining to the Municipal Planning Commission and the Land-use by-law.

 The dismantling of the MPC occurred in two stages – subdivision and development process was turned over to the City administration in 2004-07 and the MDP process was absorbed by Administration and City Council in 2007-10.

 Citizens were left with 5 minute presentations to Council or input to meetings put on by developers.

Recommendation : Eliminate the Existing Structural Flaw in the St. Albert Council and Administration Organizational Structure

Establish a Planning Commission, Committee or Board made-up of Council members, Citizens at large and Senior Administration to oversee the subdivision approval process and advise Council on all statutory matters related to planning that affects the City of St. Albert. 

This will provide a venue where Council, its administration and the general public can focus on planning issues and concerns and the city administration can keep in close contact with the elected and non-elected members of the community. 

St. Albert Municipal Election: The Costs of Homeownership in St. Albert vs Edmonton

Municipal politicians have to be sensitive to the impact property taxes have on their electorate particularly during a recession.

The property tax is a wealth tax.

Unlike the  personal income tax paid to the provincial and federal governments the property taxes paid to municipalities do not rise or fall as personal income rises or falls. 

Rising property taxes are an issue for individuals on fixed incomes and those that have experienced a decrease in income due to the loss of a job or a business or reduced hours of work.

A curious phenomena has arisen during the current municipal election campaign.

The annual property tax and utility charge survey produced by the City of Edmonton shows St. Albert has the highest municipal property taxes in the Alberta Capital Region in 2009.

A number of candidates have concluded high taxes result in high costs being imposed on the owners of residential property within the city.  A number of policies have been proposed for curbing or cutting municipal spending.

Interestingly enough, the Edmonton survey actually shows homeowners of comparable properties in high tax St. Albert have lower homeownership costs than their Edmonton counterparts.

The following points should be noted:

• Significant differences in the market value of comparable residential properties located in different municipal jurisdictions will result in significant differences in the mortgage payments made by the purchasers of the properties.

• Differences in mortgage payments must be combined with differences in property taxes in order to determine the difference in the net costs of home ownership in different municipalities.

• The City of Edmonton survey did not set out the difference that exists in the market value of the three bedroom bungalows it used in making intermunicipal tax comparisons among Alberta Capital Region municipalities.  Only the property tax and utility charge differences were shown.

• Table 1 shows how the value of the standard three bedroom bungalows used in the Edmonton survey is derived.
• 
  
• The St. Albert bungalow is valued at $317,120 versus $358,451 in Edmonton  – a difference of $41,430.

•  The difference in property taxes amounts to $733 per annum in favour of Edmonton. 

• A variety of different assumptions can be made; however, if a 25 year amortization period is chosen and a minimum down payment is assumed it can  be shown after a variety of interest rate options are explored that the lower mortgage payments on  the standard three bedroom St. Albert bungalow off-set the Edmonton tax advantage by a very large margin.

Table 1: A Comparison of Total Property Taxes, Tax Rates
	and the Value of a Three Bedroom Bungalow in Edmonton and St. Albert in 2009 (1)(2)(3)
		Edmonton	St. Albert
	Municipal Taxes ($)	1,419	2,152
	Residential Mill Rate	3.9587	6.7882
	Assessment Value ($)	358,451	317,021

    (1) The Municipal Taxes were obtained from the City of Edmonton, "2009 Residential  Property             Taxes and Utility Charges Survey, Dec. 2009” 

      (2) Mill rates were obtained from Municipal Profiles Data Base, Government of                                     Alberta,  September 19, 2010.   

      (3 ) Assessed Value = Property Taxes /Mill Rate   

• The favourable cost position enjoyed by the St. Albert homeowner vis-à-vis their Edmonton counterpart is improved once utility charges are introduced into the analysis since St. Albert utility charges are relatively low and Edmonton’s are relatively high.(St. Albert’s more limited use of franchise fees is a factor in holding utility costs down.)     
• The introduction of provincial school taxes to the analysis further widens the cost gap in favour of the St. Albert property owner since the provincial education levy is higher on the Edmonton bungalow.

• .The more inclusive the coverage (all the tax components and utility charges plus the mortgage payments) the greater is the cost advantage enjoyed by the St. Albert bungalow owner.

• The foregoing discussion has focused on the role property taxes, utility charges and mortgage payments play in affecting home ownership costs.  Attention needs to be directed towards a myriad of other factors ranging from intermunicipal differences in the quality and quantity of municipal services, commuting time and travel costs and environmental factors such as air quality and noise levels. 

St. Albert Property Tax Caps in Election 2010: Fact versus Fiction

St. Albert residents will elect a new City Council on Oct. 18.

I attended the St. Albert Taxpayers forum at the Arden theatre on Sept. 28.  A member of the audience asked the Council candidates to indicate whether they would support holding property tax increases to a 1.5 percent level for each of the next 2 years.

Quite surprisingly some of the Council candidates raised their hand and agreed to support this proposition. 

Obviously capping property taxes at a low level while continuing to provide the same quality and quantity of services per capita to a population in a growing municipality is something the overwhelming majority of the St. Albert population would heartily endorse.

On the other hand candidates recommending a property tax cap that is not based on a well thought out and researched budget plan deserve to be severely censored by the St. Albert electorate when election day rolls around.

Will a 1.5 percent property tax increase in 2011 and 2012  result in significant cuts to existing City programs and services?  If so which ones and by how much?  Will capital projects have to be postponed?  Will wage freezes and/or lay-offs in the municipal civil service be necessary in order to hold spending down?  Will a host of City fees and charges be boosted to try and cover some of the revenue shortfalls?

No one can provide answers to these questions at this time.  The reason is the 2011 city budget will not be tabled until well after the election and the new Council is sworn in.

Specific Details Regarding Taxes and Expenditures Are Determined at Budget Time

 The basis for determining why certain City programs should be continued and expanded and others discontinued or reduced or new ones created are best made at budget time when all of the information needed to make such decisions is made available to both Council and the general public.

At budget time the professional staff  responsible for managing and administering the City’s affairs present a budget they believe will best serve the interest in the public corporation called the City of St. Albert. The tabling of this budget is the starting point for informed budget deliberations that focus on both the revenue as well as the expenditures needed to run the municipality.

At the end of the budgetary process City Council may have increased, markedly reduced or left the budget mostly unchanged.  The point to note is any changes made to the original budget are based on the input of its staff, all of the members of council and members of the public who care to make representations at various points in the budget deliberations.

The final budget is a document that carefully weighs the needs of a city against the revenues required to run it.  Thousands of hours of work and effort is required to prepare and finalize it.

Conclusion:

Some of the first time members running for council made a serious economic policy mistake in supporting a 1.5 percent tax cap for each of the next two years.  There is simply no rational economic basis for making such a commitment at this point in time.

A statement made in the heat of the moment at an election forum in the first week of a campaign by a person engaged in their first political campaign is one thing.  Adherence to a bad policy throughout a campaign is another.

Some of the candidates who supported the 1.5 percent tax cap have excellent credentials. The City needs members on Council who will carefully scrutinize public spending and work hard to minimize the magnitude of the taxes levied on property owners.

I am going to monitor the progress of the tax cappers over the course of the next two weeks to see if the pro cap group realize they can’t finalize their position on property taxes for 2011 without  first examining the budget and weighing the needs of the city against all of the revenues needed to fund it.