A Bill that could restrict use of one of the traditional sources of revenue for municipalities and negatively impact the way The City of Calgary delivers services was addressed by The City’s manager in provincial government yesterday.
Calgary’s City Manager, Owen Tobert and Chief Financial Officer, Eric Sawyer, spoke to the provincial Standing Committee on Community Services about The City of Calgary’s concerns with Bill 203.
“This Bill is extremely concerning to The City of Calgary, which has, for a long time, used this revenue source to balance local budgets which are based on local needs,” said Tobert.
“For the province to arbitrarily take this local control away has the potential to negatively affect municipalities and the citizens who rely on their services.”
The City of Calgary is not alone in its worry about the negative impacts of Bill 203. In fact, The City is working with the Alberta Urban Municipalities Association and cities across Alberta to prevent the passage of the bill.
Municipalities have different and varying needs. For example, cities grow at different rates and experience different infrastructure demands and public service expectations. This is why the Municipal Government Act gives municipalities the flexibility to determine what revenue sources – e.g. property tax, franchise fees or user fees - work best to meet those needs.
Sawyer said this Private Members’ Bill ignores customer differences by imposing a single methodology for all, which may result in the redistribution of costs between different customer classes. If approved, the Bill may have an unintended consequence that could shift the financial burden.
“We are working to protect and balance local community needs and citizen interests”, says Tobert.
Franchise fees are an important revenue source that helps enable the delivery of core municipal services like police, fire, and public transit. A shortfall in revenue from one revenue source would have to be addressed through increases in other revenue sources.
Franchise fees are currently identified in a single line item on a customer’s utility bill and are transparent and clearly identified for municipal purposes. Published utility rate schedules include the standard franchise fee methodologies that are used in Alberta.