June 25th, 2024

Potential third bridge could result in significant tax burden

By Lethbridge Herald on January 19, 2022.

Herald photo by Alejandra Pulido-Guzman A line of snow plows make their way up Whoop Up Drive as they clear snow and slush off of the roadway for motorists on Tuesday after the city experienced an overnight snowfall.

Al Beeber – Lethbridge Herald

Lethbridge City Council on Tuesday was given an idea about the potential tax implications of a third bridge crossing the Oldman River.

A report by City treasurer Darrell Matthews showed if the bridge costs $200 million there could be a 14.5 per cent increase for residents on the assumption that a 10-year loan at three per cent interest would prompt annual payments of $23 million. That tax increase, however, could be increased over a four-year period instead of one, which would result in a 3.6 per cent annual increase, said the report.

If the bridge costs $250 million, the $29 million annual loan payments would result in an 18.3 per cent annual tax increase. A $300 million bridge would prompt annual loan payments of $35 million, resulting in a tax increase of 22.1 per cent to residents.

Annual operating costs for a third bridge would be about $190,000, Matthews told council on Tuesday.

Dodic brought up the issue “because this was a question that was posed on the last municipal election.”

He said the numbers don’t necessarily reflect what the cost of a bridge would be. The last “guesstimate” he said was it would be $175 million to $200 million. So Dodic just used three numbers to give a sense of what it would cost to taxpayers in terms of tax increase.

If loan rates increase, that could also increase the rate of borrowing, the report states.

Using these interest rates, a $200 million bridge, based on an average single family assessment of $269,500 and the 2021 Single Family Residence Mill Rate of 8.7505 could increase property taxes by $343.

A $250 million bridge could increase those taxes by $433 while a $300 million bridge could result in an annual property tax increase of $522.

Matthews, in his report, states “if council decided to approve the construction of a third river crossing, the City of Lethbridge will maximize the use of any external grants available at that time. The Government of Alberta has indicated that the Municipal Sustainability Initiative (MSI) grant program will end in 2024 and the future Local Government Fiscal Framework (LGFF) grant details are unknown at this time.

“There could be other opportunities to fund this project through public-private partnerships (P3), toll rates or other funding structures,” says the report.

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So what kind of bridge does $250 mil get you? 2 lane, 4 lane, 6 lane, (plus bike lanes), etc?