Infrastructure: Who Pays for What?
When we talk about infrastructure, we are referring to those fundamental facilities and systems that serve our cities. Cities constantly need investment in new infrastructure, and the upkeep or replacement of aging infrastructure. Funding the growth and maintenance in infrastructure is a concept that should be understood by all.
To make this a little more clear, here’s an overview of who pays what when it comes to city infrastructure.
The City is responsible for:
- Public/green spaces
- Street lights
- Traffic controls
- Public transit
- Water, wastewater and sewage
Developers are responsible for:
- Sound barriers
- Phone systems
- Recreation facilities
- Streets and sidewalks
There are only a few places that The City can turn to for revenue – property tax from residents and businesses, developer levies and fees in new communities and developed communities, monthly utility payments from property owners, user fees, and federal and provincial government grants. [Smarter Growth]
Levies and fees paid by developers/Calgarians pay for:
- Developers pay for growth-related infrastructure expenses inside new communities
- Developers dedicate land for parks and facilities
- Builders pay for upgrades to local infrastructure for redevelopment projects
- Calgarians pay for the supplemented cost of recreation facilities, public transit, water and recycling
Utilities paid by utility users pay for:
- Cost of delivery of electricity, water and sewer
- Monthly bills reflect fluctuating cost of electricity actually delivered to homes, and local access fees
Property taxes paid by homeowners and business owners pay for:
- Part of City revenue, covers essential services and programs
- Helps City with operating expenses for infrastructure like roads and parks
- Approximately 2.6 per cent of property tax revenue used to maintain existing infrastructure
Government grants pay for:
- Capital projects, like Green Line
- Funds come from programs like GST refund or gas taxes
For more information on infrastructure development and funding, read this in-depth guide from Smarter Growth.