The company that wants to expand the Trans Mountain pipeline through Metro Vancouver is disputing a report that says the project will mean more than $93 million in extra costs for taxpayers in Langley, Surrey, Coquitlam, Abbotsford and Burnaby.
A Sept. 17 letter from Kinder Morgan Land Lead Carey Johannesson to Langley Township mayor and council says the added costs will be more than outweighed by property tax revenue.
Johannesson was responding to a study by Associated Engineering, funded by the five municipalities, that put the added cost of building municipal infrastructure around the new pipeline at more than $93 million over 50 years.
That includes installing new and replacement “buried utilities,” such as water pipes, sanitary and storm sewers as well as roads, ditches and creeks in areas where the pipeline runs.
The study says Coquitlam would have the biggest bill — $28.5 million — followed by Burnaby with $17.6 million, Surrey with $17.1 million, Abbotsford at $17 million and the Township of Langley at $12.8 million.
The Kinder Morgan letter says tax revenues from the existing pipeline through the communities will “more than double” once the expansion project is completed, totaling $950 million over the same period.
Johannesson also challenged the $93 million estimate, saying Associated Engineering “incorporated contingencies of 40 per cent above costs, and ignored mitigation measures.
“However, conservatively assuming the likely overstated $93 million costs were appropriate, the municipalities would have a net financial benefit from the project of more than $850 million, based on property tax alone.”
But Coquitlam will likely end up in the red, Johannesson conceded.
“ … projected taxes may not fully cover projected direct municipal increased costs as a result of the proposed project (in Coquitlam).”
The Johannesson letter appears to rule out financial compensation for Coquitlam, saying that often, “because of municipal boundaries, a utility project will produce property tax greater than direct costs and sometimes it will produce property tax less than incremental costs.”
“The principals (sic) of fairness suggest Trans Mountain should not be treated differently than other utilities and linear infrastructure within the municipality.”
The letter states the company is willing to work with Coquitlam and other municipalities and take other steps to reduce the impact of the line.
If a municipality still believes “it is in a situation of net loss” after all that, the company “would be pleased to meet and discuss outstanding concerns or costs” Johannesson said.