Edmonton fire hydrant funding shifts would mean lower property taxes, higher water bills

·3 min read

Residents and businesses in Edmonton could see property taxes slightly drop next year if the city switches the cost of maintaining fire hydrants from the tax levy to utility bills.

City administration proposed the funding model change at a utility committee meeting Friday at city hall.

Currently, Edmonton Fire Rescue Services pays for hydrants through its operating budget, which is funded by municipal property tax.

The fire service spent $10.8 million in 2017 and is estimated to spend $12.4 million in 2021 on fire hydrant costs, through taxes.

Mary Persson, deputy manager of finance and corporate services, said a number of factors are driving the quest for a more equitable system.

Approximately 1,650 properties in Edmonton are tax exempt but still receive fire protection services.

Those would include schools, places of worship and non-profit organizations.

'I don't think they'd be happy if the legislature burst into flame and we said 'not our problem.'' - Coun. Ben Henderson

Coun. Ben Henderson agreed that collecting money through utility rates, which everyone pays, evens the playing field.

"It's a service we have to have and we're just trying to find the most appropriate way, the fairest way for people to pay for it," Henderson said.

Henderson said decreasing the Edmonton Fire Rescue Services budget by $12 million would translate to a noticeable decrease in property tax.

"It's significant — that represents probably one per cent on your taxes."

Henderson acknowledged, however, that residents and business owners will see utility rates go up slightly, some in proportion with the tax decrease.

"This is not going to mean people are paying more, they'll just pay differently."

Coun. Sarah Hamilton said the current system isn't proportional, so switching to utility bills would mean all users contribute.

"The people who use it or benefit are the people who pay for it. So it is more equitable."

Hamilton noted that property owners may see an overall decrease in what they pay.

"Some homeowners might see net benefit, some might see it go onto their utility bill."

Provincial factor

Persson noted that 146 provincially owned or occupied properties in Edmonton — such as the Alberta legislature — also get public fire protection services but don't pay taxes.

The Alberta government gives municipalities grants in lieu of taxes for all municipal services, but it cut those grants by half in 2019 and 2020.

The city has been receiving $11 million less per year from the province.

"Providing fire service to them is a pretty expensive proposition," Henderson said. "And I don't think they'd be happy if the legislature burst into flame and we said 'not our problem.' I think there'd be tears."

Edmonton fire service also reviewed other jurisdictions and found that Ottawa, Winnipeg, Calgary and Vancouver typically funded fire hydrant upkeep through water use rates, Persson noted.

If council agrees, the switch to water utility rates would start in April 2022.

Council is asking EPCOR to come up with a recommended rate within the water utility.

The proposed rates will be presented to council and reviewed through a public process before being approved.