February 25th, 2021

Business fee debate heats up

By Collin Gallant on October 18, 2016.

Medicine Hat city council debated Monday evening new fees and increases for construction and building permits.--NEWS PHOTO MO CRANKER


A host of city permit and development fees will rise next year to better recover costs, despite a slim 5-4 approval on a key point at council’s Monday meeting, then continued protest votes by two members.

Mayor Ted Clugston and Coun. Brian Varga remained resolute in their ‘nay’ stance as 10 bylaws in total were individually amended to reflect the changes.

Councillors in favour said it was time to get serious about closing a $23-million budget gap by moving to a user-pay model for services it currently provides at a general cost to taxpayers.

Afterward, Clugston said he would support a moratorium on extra charges to business and permit seekers, and the city should dip further into reserve funds to balance the budget or further cut costs.

“You shouldn’t take a dollar from the taxpayer until you absolutely need it,” said Clugston. “We have a tonne of financial reserves … I truly believe the utility profits will return — the business is cyclical and we’ll be able to ride this out.”

That statement was made to reporters after the meeting, during which five councillors argued for a complete budget review to make up one-quarter of the city revenue next year when no energy division dividend is expected.

Coun. Robert Dumanowski told council in the middle of debate that there was sound reasoning behind the increases “regardless of the financial situation,” and suggesting opponents were posturing.

“This is not a popularity contest,” he told open council. “I’m concerned that we have a (budget) plan and each time we sit around this table we dismantle it bit by bit.”

Couns. Varga, Celena Symmonds and Julie Friesen also voted against the first of the series of fee increases on advice from the Chamber of Commerce and Medicine Hat Construction Industry.

As a whole, the moves raise most fees on things like business licences or building permits and inspections between 4 and 7 per cent over two years.

About one-quarter of such fees will rise by up to 50 per cent by 2018 to meet an average amount charged elsewhere in the province. Also, new fees for services previously offered at no charge, come into effect on Jan. 1, 2017.

The move would bring in an additional $250,000 per year to the planning department, which receives $2 million annually in its operating budget.

The most debated point was a Chamber proposal that called the changes “for the most part reasonable,” but called for a re-examination of the base commercial development rate.

That cost, currently $7.70 per $1,000 of estimated construction value, would rise to $8.24 in 2018 — translating to $540 extra on a $1-million project.

While not a large increase, said Chamber executive director Lisa Kowalchuk, the same charge in Lethbridge is $7 and a much-less set fee in Cypress County and Redcliff.

“We’ve already seen business considering moves to other jurisdictions considering the cumulative effect of (increased costs) municipally, provincially and federally,” she said.

Varga said higher fees would dampen construction activity. Symmonds argued that tax revenue from a new business eclipses any added permit revenue.

Friesen said “I just don’t believe that you hit the business sector when they are down.”

Bill Cocks said taxes are as large or larger a determining factor for potential new business activity than permit fees.

“If the user doesn’t pay, then who does? It’s the taxpayer,” he told council, calling the proposed rates reasonable. “There’s nothing unreasonable here.”

Coun. Jamie McIntosh said council’s rejection of a utility fee increase this summer had limited its options for raising money.

“We can’t start cherry-picking fees for this group or that,” he said. “This is a burden the whole community must share.”

Coun. Jim Turner said he “reluctantly supported” the measure.

Coun. Les Pearson said the health of the city’s reserve accounts — which is to drop by $90 million over two years — “haunts” him.

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