When it rains, money could pour for the City of Mississauga if council approves the introduction of a new user fee.
Based on a stormwater financing study by the engineering consulting firm, AECOM, city staff are recommending charging property owners for the amount of rain that flows into the storm sewers from their properties. The fee will be calculated based on how much hard surface property owners have contributing to the run-off.
The average homeowner pays $28.58 in property taxes towards 60 per cent of the storm sewer's capital and operating costs. If this tax gets transitioned into a dedicated user fee for all storm sewer expenses, the average homeowner will pay $93.60.
This 228 per cent increase for a home assessed at $430,000 is in addition to property taxes. Residents are also faced with a proposed 3 per cent hike to property taxes, which council will vote on at its Dec. 12 budget meeting.
"The city doesn't have any money and they could have had money had they been smarter in the past," said Dave Cook, a former Mississauga city councillor and president of the Applewood Acres Homeowners' Association. "At one time, the city had a tremendous savings account."
Mississauga's storm sewer infrastructure is only about 30 years old and the lifetime of its pipes is at least 100 years, but after a significant storm caused major flooding in August 2009, staff realized that if the infrastructure needs to be replaced – a project estimated to cost $1.6-billion, there were no reserve funds in place to do so.
"Staff and the mayor and members of council realized that if you don't start to invest now, our children and grandchildren are going to pay for it," said Lincoln Kan, the manager of environmental services in Mississauga's Transportation and Works department.
AECOM undertook the stormwater financing study in February at council's request. A stakeholder group comprised of about 30 residents, commercial-sector representatives and conservation authorities provided input for the study.
Commercial property owners with parking lots are going to be hit hardest by the fee, according to Ryan Eickmeier, a spokesman for the Real Property Association of Canada. The fee for a shopping mall could go up by 365 per cent to $48,000 – up from $10,000.
"We view this as a retroactive tax on planning decisions made years ago," said Mr. Eickmeier, who argues that the fees will lessen the competitive advantage Mississauga businesses have in the Greater Toronto Area. "It unfairly shifts the tax burden onto the commercial sector, particularly those with large impervious surface areas."
REALpac is recommending the storm sewer infrastructure be funded through increased property and development taxes. However, Mr. Kan said there is no correlation between property tax and stormwater, just like there is no correlation between property tax and the amount of water one uses.
"We see that it's also something that is more fair and more equitable than tax, because tax is based on assessed value of a home," said Mr. Kan.
Mr. Cook said the increased fees and taxes will be received with "great anger" by residents who have no choice but to pay for minimal tax increases in previous years.
"The people that are approaching retirement who have a home here, they're going to be feeling this pinch really greatly. And the younger people who are struggling to own a home and pay for it, they're going to be hit with this."
City staff and AECOM will recommend the user fee, and discounts for rain barrels, to the city's general committee on Dec. 5.