Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities                      Conférence et salon professionnel Conference and Trade Show                  ...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities                    Conférence et salon professionnelConference and Trade Show                     ...
Sustainable Communities               Conférence et salon professionnel Conference and Trade Show                sur les c...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnel    Conference and Trade Show                sur le...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
Sustainable Communities               Conférence et salon professionnel    Conference and Trade Show                sur le...
Sustainable Communities                          Conférence et salon professionnel    Conference and Trade Show           ...
Sustainable Communities               Conférence et salon professionnelConference and Trade Show                sur les co...
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David Thompson Presentation - FCM SCC 2011 - Environmental Pricing Reform: Building the financial foundation for wastewater infrastructure renewal February 2011

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David Thompson, Director, Sustainable Communities, Sustainable Prosperit

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David Thompson Presentation - FCM SCC 2011 - Environmental Pricing Reform: Building the financial foundation for wastewater infrastructure renewal February 2011

  1. 1. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesFinancing, Pricing & Demand Management: Waste Not, Want Not David Thompson Director, Sustainable Communities Sustainable Prosperity www.sustainableprosperity.ca #SCC2011
  2. 2. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesWastewater Regulations• A financial challenge for some cities• An infrastructure management incentive• One way to address both… #SCC2011
  3. 3. Sustainable Communities Conférence et salon professionnel Conference and Trade Show sur les collectivités durablesFinancial challenge – up-front costs• Federal and provincial grants – Financial sector meltdown & crash public deficits• Public-Private Partnerships (P3, PPP) – Early hopes: panacea? • Higher borrowing costs, shareholder ROI, other costs • Transparency, accountability issues • Ultimately, the user / taxpayer pays • Hamel, “P3s and Municipalities” (FCM 2007). – Experience: no free lunch #SCC2011
  4. 4. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesFinancial challenge – up-front costs• What’s left?• Normal financing, i.e. borrowing – Pay down debt over life of asset – gradual – Revenues and spending: connected • Same order of government – accountability #SCC2011
  5. 5. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesFinancial challenge – paying down debt• Default? Property taxes – Calgary poll (IPSOS 2010) Budget preferences New revenue preferences10% Increase 8% taxes Property Maintain 29% tax taxes 27% 55% Cut taxes User fees 71% None #SCC2011
  6. 6. Sustainable Communities Conférence et salon professionnel Conference and Trade Show sur les collectivités durablesEnvironmental Pricing Reform• Environmental problems – local, global – Nobody wants them; no ‘bad guys’• Current set of incentives creates them – Change the incentives – “Tax bads, not goods” (EPR) – Taxes / user fees can create another revenue stream• Outcomes – benefits: – environment, economy, jobs, diversify revenue, etc. #SCC2011
  7. 7. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durables Pricing for wastewater• Sewer discharge volume, substances – Large users – can monitor discharges• Stormwater (Kitchener, up next)• Water supply – proxy for sewage – Simple, and all users are covered – Change rates to encourage conservation – Reduces sewer demand and costs #SCC2011
  8. 8. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durables #SCC2011
  9. 9. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesOvercoming challenges:• Challenges to adoption of new policies• Can arise from… 1. Equity and fairness concerns 2. Vested interest opposition 3. Fiscal impact on municipality 4. Political 5. Others #SCC2011
  10. 10. Sustainable Communities Conférence et salon professionnel Conference and Trade Show sur les collectivités durablesEquity and Fairness Concerns• Lifeline rate• Progressive block billing• Rebate for high occupancy homes• Rebate for lower income homes #SCC2011
  11. 11. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesVested interest opposition• Incentive to sell more water if… – Utility is set up as for-profit corporation – Management pay based on size of operation• Ensure right incentives in place – Utility: conservation mandate from regulator / owner – Management: bonuses for conservation #SCC2011
  12. 12. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesFiscal impact on municipality• Positive on revenues: – Additional revenues – Diversified revenues• Positive on spending: – Demand management – Defer, reduce or eliminate infrastructure costs #SCC2011
  13. 13. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durablesPoliticalRemember Calgary (& Edmonton) polling – OK with revenue increases – User fees, not property taxes #SCC2011
  14. 14. Sustainable Communities Conférence et salon professionnel Conference and Trade Show sur les collectivités durablesSummary• Wastewater regs a challenge, opportunity• Traditional sources of $ may not work• Consider restructuring rates – progressive• Overcome challenges – smart policy design #SCC2011
  15. 15. Sustainable Communities Conférence et salon professionnel Conference and Trade Show sur les collectivités durablesReferences• P. Hamel, “Public-Private Partnerships (P3s) and Municipalities: Beyond Principles, a Brief Overview of Practices” (FCM 2007) http://www.fcm.ca//CMFiles/P3_report2007_en1NRL-6292010-417.pdf.• Ipsos Reid, “Calgary 2010 Citizen Satisfaction Survey Report” (Oct 2010) http://www.calgary.ca/docgallery/bu/customerservice/2010_citizen_satisfaction_surve y.pdf• Thompson and Bevan, “Smart Budget Toolkit: Environmental Pricing Reform for Municipalities” (Sustainable Prosperity, 2010) http://www.sustainableprosperity.ca/article172.• Thompson, “The Power of Prices and the Failure of Markets: Addressing Edmonton’s Environmental and Fiscal Challenges” (City of Edmonton, June 2010). http://www.edmonton.ca/city_government/documents/Discussion_Paper_17_Power_ of_Prices_and_Failure_of_Markets.pdf #SCC2011
  16. 16. Sustainable Communities Conférence et salon professionnelConference and Trade Show sur les collectivités durables David Thompson Director, Sustainable Communities Sustainable Prosperity dthompson@plrc.ca www.sustainableprosperity.ca #SCC2011

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