Mackenzie Village report raises alarm over City of Revelstoke infrastructure funding

Report on Mackenzie Village raises serious questions about city's ability to pay for infrastructure through Development Cost Charges.

The development of Mackenzie Village could force the City of Revelstoke to accelerate several key infrastructure projects and will put significant pressure on city finances, says a new report by the city’s director of engineering.

“While new growth is often seen as a net benefit to a community, a development of this size in a community the size of Revelstoke should be approached with caution and awareness of the positive and negative risks that could result,” writes Mike Thomas in a 10-page report to council. “The proposed infrastructure upgrades required to service this and similar development may have an impact on the city’s finances through changed priorities, accelerated construction programs and the need to borrow funds against future development revenue.”

The report includes several alarming figures, including the fact the city will have to spend an estimated $34 million to upgrade the sewage treatment plant to meet future demand on the system.

As well, the city is faced with almost $54 million in total Development Cost Charge projects over the next 15 years, with little in the way of reserves.

The city collects reserves for road, sewer and water projects, but the first two have been used up, writes Thomas.

“DCC reserves can only be used for the utility they were collected for,” he says in his report. “Current DCC reserves are limited, with road DCC’s being used to fund the Victoria/Mutas intersection and sewer DCC’s depleted due to previously completed projects. As such, there is effectively no funding available from previous development for the required sewer and roads projects.”

According to figures in the report, in the next 15 years the city will need to spend $34.25 million on upgrading the sewage treatment plant and other sewer projects, $6 million on road projects, and $13.6 million on water projects. Looking further out to 2040, the report forecasts another $20 million in road spending and $18.7 million in water spending.

The DCC’s will be reviewed as part of a bylaw update proposed for 2017, says Thomas.

The alarming report goes in front of council this Tuesday, Nov. 22, right before they are scheduled to approve the Master Development Agreement for the proposed Mackenzie Village development and give the re-zoning bylaw final adoption.

Developer David Evans is proposing to build a 1,200 unit mixed-use development on a 35 acre property he owns off Nichol Road in Arrow Heights.

The report looks at the impacts the development could have on the city if it proceeds to full build-out in 12 years, as proposed. It says it could add the equivalent of 4,244 people to Revelstoke at full build-out. The growth of new water users in that time would be even higher, at 5,555 people, the report says, and Mackenzie Village would take up 76 per cent of new growth in the next 12 years.

The report says several water infrastructure upgrades would be needed, including an extra reservoir in Arrow Heights or at the ski hill, a new pump station, and upgrades to the Greeley Water Treatment Plant and water main.

The impacts on the sewer system are more substantial and the development would force the city to transition to a mechanical sewage treatment plant at a cost of $28 million by 2020 and another $6 million by 2030.

Thomas is asking staff to approve $75,000 in funding for a sewer treatment study in 2017.

Roads are another issue. The report says roundabouts should be built at Airport Way and Nichol Road, and at Hay road and Nichol Road, to handle future traffic.

The report raises questions about the future of the Illecillewaet Bridge. While Thomas says the bridge would be able to handle projected peak traffic volumes 15 years from now, he adds that either a new bridge or twinned crossing should be considered and included in as a project in the new DCC bylaw.

The report also discusses the entire Airport Way/Fourth Street Corridor, though that was not part of the developer’s traffic impact assessment. The report notes the $1.5 million in DCCs allotted for upgrading the corridor have been eaten up by the highway intersection project and raises questions about where funding will come from for the Victoria/Fourth/Townley intersection.

Under the existing bylaw, Mackenzie Village would contribute $9.2 million in DCCs to the city, writes Thomas.

“This contribution of $9.2 million would equal 17 per cent of the required funds, further highlighting the risk of proceeding with development in general without addressing the issue of funding the required infrastructure,” he says.

One of the risks is the city will have to borrow money to fund new infrastructure and, while it’s hoped the money would be paid back through DCCs, it’s also possible that if the development proceeds slower than expected, taxpayers would be on the hook for that money.

“If development is slower than predicted, the city’s ability to pay back the borrowed funds from DCCs will be reduced, causing secondary or internal borrowing to be required to cover these payments. This has the potential to force debt servicing costs onto the general taxpayer, rather than development.” says Thomas.

On top of updating the city’s DCC bylaw, Thomas is proposing the city allocate some of the tax revenues collected from the development into reserves that could be spent on infrastructure. Mackenzie Village is expected to contribute about $2.89 million per year to the city coffers at build-out.

“The new development will provide considerable new operating revenues, and through the annual financial plan process, in consultation with finance and engineering staff, council will need to determine how much of this money is required for delivery of programs and administration, and how much can be allocated for debt servicing to fund infrastructure upgrades or for building capital and operating reserves,” writes Thomas.

Council will consider Thomas’ report this Tuesday, Nov. 22. After, it will vote on approving the master development agreement for Mackenzie Village, and adopting the re-zoning bylaw for the property.


Just Posted

Traffic stop in Malakwa leads to arrests

Three in custody suspected of jewellery theft

Revelstoke Fire Chief Rob Girard to retire

Assistant Chief Roger Echlin to take over duties on June 1

Glimpses of the Past

From a hawk preying on tame pigeons in 1893 to a housing shortage in 1943

Revelstoke Visual Arts Centre reopens with annual members exhibit

“Things You Don’t Know About Me” will open at the Visual Arts Centre on April 6

Cost of propane to lower in Revelstoke

On April 1, Revelstokians will see their annual propane cost decrease by 8 per cent

VIDEO & PHOTOS: Under the Big Top

Revelstoke Skating Club performance inspired by Cirque du Soleil

Russian Embassy calls Trudeau’s criticism of Putin unproductive

The Russian Embassy is firing back at Trudeau for criticizing President Vladimir Putin

Murder charge upgraded for man accused in Toronto gay village death

Man accused the death of a woman in the Toronto gay village had charge upgraded after new evidence

Former NHL player Theo Fleury visits B.C. First Nations community

Abuse survivor Theo Fleury has been working with communities focusing on healing since 2009 and visited Esketemc First Nation in the Cariboo this week.

A B.C. council takes action in wake of former municipal politician’s sentencing

Dave Murray was sentenced to nine months for a sexual assault that occurred 26 years ago.

Nifty Fifty Bonspiel

Twenty-six teams attended the successful Provincial Nifty Fifty Bonspiel held March 15-18 in Chase.

Column: There’s a book in there somewhere

Without really having given it much thought, I suppose I resigned myself… Continue reading

Column: Getting kids into the kitchen

Your kids may be able to do more in the kitchen than you might think

Harsher fines, new off-road vehicle rules in effect to combat B.C. wildfires

Anyone who starts a wildfire could be ordered to pay up to $1,000,000

Most Read