©Guardian photo by Brian McInnis
New expansion of water, sewer tax kills interest of contractors to build in the town, warns Kel-Mac Inc.
Stratford is going ahead with a bold new tax, but a developer in the town said it is killing growth.
The monthly council meeting Wednesday saw Stratford adopt an expansion to an existing one-time tax aimed at paying for new water and sewer projects.
"It's an issue of fairness," said Mayor David Dunphy, who reviewed the background of the tax at the meeting.
A few years ago, before he became mayor, Stratford brought in a special water and sewer tax that was applied just once to newly developed lots. In total, it amounted to $1,500 per lot.
That was paid upfront by the land developer to get permits to proceed and passed on down the line to likely be absorbed into the total cost for the eventual resident. It was the same amount whether for a single-family lot or a multi-unit lot.
Newly approved by Stratford council Wednesday, taking effect immediately, is a requirement for a developer to now pay the water and sewer capital tax per apartment unit, rather than per building lot.
"They have many more water and sewer demands than a single-family home," said Dunphy. "It's more stress on our system."
Dunphy said the town is facing a huge expense in the next two to four years to pay for a whole new sewage treatment system, whatever that may be.
No other place on P.E.I. has such a tax, said an irate Don Hickox of Kel-Mac land developers.
He ripped into council during the public input stage of the meeting.
"This council came up with a plan that will destroy any potential for sustainable development," he said.
Hickox said because of this tax, contractors have walked away from land prepared for development by his company. He also said contractors are telling him they have no intention of doing business in Stratford "unless there is a change in the anti-development policies of the town."
His company is now going to do the same, he warned.
"We will have to walk away and leave development for future generations or until a pro-development council with economic common sense is formed."
He used an example of land Kel-Mac wanted to develop near Stratford town hall — 19 acres for 27 single-home lots, one triplex and seven apartment lots.
"This new proposed water and sewer tax comes to a staggering $300,000," said Hickox.
A developer can't pass that on to builders because they will just go elsewhere, like the Charlottetown area of Winsloe which does not have that extra cost, he said.
Stratford Coun. Steve Ogden asked that the issue be delayed to see if other ways of paying for big projects could be found, like through water rates, but council voted that down.
Ogden was the only one to vote against the tax expansion.