Rocky Mountain House town council has scuttled a proposal to create a residential tax subclass for properties not serviced by municipal infrastructure such as water and sewer.
The defeated proposal would have allowed eligible properties to receive a two per cent reduction in the municipal mill rate, translating to annual savings of about $1,000 per property.
A report presented to council showed 61 properties within town limits that meet the criteria — primarily in the McNutt and Old Town areas — representing about six per cent of all single-family homes and a combined assessed value of $32 million.
The report estimated the proposal would have resulted in a $64,000 reduction in municipal tax revenue, a shortfall officials said would have to be offset elsewhere, creating a ripple effect for other property owners.
Corporate Services Director Betty Quinlan warned the change would push residential tax increases from the already approved 2026 rate of 2.87 per cent to 3.6 per cent. Administration’s report said the increase would amount to about $25 for the average residential property owner.
The report also noted that creating a subclass would not reduce the school and lodge requisitions portion of property taxes. Those requisitions — which account for up to 24 per cent of a resident’s total property tax bill — were not included in the town’s calculations.
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The proposal sparked a robust debate among council members. Deputy Mayor Dale Shippelt said the subclass is something he has advocated for for years, citing a significant difference in service levels for properties without water and sewer connections.
Councillors Ken Moesker and Kevin Stalker opposed the plan, arguing that arm’s-length property assessors already account for access to municipal services when valuing properties.
The report supported that position, indicating unserviced properties pay about 18 cents per square metre in property taxes, compared with $1.53 per square metre for fully serviced lots.
Moesker said the proposal unnecessarily politicizes municipal taxation, while Stalker warned it could open the door to further complaints about perceived tax imbalances. Moesker also noted that a future council could still increase the overall mill rate if deemed necessary.
Shippelt acknowledged that the proposal could create concerns, and that the mill rate could be changed, however, he says it’s a matter of fairness, pointing to the fact that the town already maintains other levels of tax subclasses.
Council ultimately defeated a motion to introduce a bylaw creating the subclass at a spring 2026 meeting. Shippelt and Mayor Shane Boniface voted in favour, while the remaining councillors opposed it.
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The long-debated idea was brought to light again in 2025 following concerns raised by residents of the McNutt Subdivision.
Although the subdivision was annexed by the town in the 1980s, some residents have questioned whether the area would be better served by Clearwater County. Those efforts stalled in June 2025, when county officials said their options were limited.
Legislative Services Coordinator Tracy Haight told council there are “absolutely no achievable options” for annexation at this time. Under provincial legislation, property taxes cannot be used as grounds for annexation, meaning a desire for lower taxes cannot justify the move.
40 km/h sign in McNutt Subdivsion. (94.5 Rewind Radio/Jordan Rein)
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