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Analytic approach to the provision and financing of urban public services in suburban development areas : a case study: Kamloops, British Columbia Petersen, Gordon John

Abstract

The purpose of this study is to devise an analytic framework for the decision making process as it relates to the provision and financing of urban public services in suburban development areas. The underlying basis for the necessity of public services is the existence of external diseconomies or social costs associated with all forms of development, although the nature of the externalities varies according to the physical form of the sector in which they are generated. In the minimally or partially serviced suburbs, social costs are often of such a nature that they concern the personal health and safety of the residents, as well as the protection of their property. Assuming an objective of the community is to "internalize" or prevent externalities from arising, the relevant policy program should be formulated systematically. At the outset is the difficult and imprecise task of identifying the objectives of the various individuals and groups affected by the existence of externalities or by policies aimed at their prevention. Assuming identification of group objectives, some of which may be conflicting, a search for alternative approaches to attaining the objectives is required. In the case study, three alternatives are suggested: the first consists of providing a full range of public services; the second consists of a combination of invoking ordinances to restrict continued development in concert with support programs to internalize existing diseconomies of a serious natures and the third is a "toned-down" version of the first in that provisions are made only for certain services aimed at preventing externalities of a serious nature. The alternatives are then evaluated by comparing the costs and benefits of each and enumerating them according to their incidence. Although the analysis of the three alternatives does not point clearly as to which is preferred, it does specify the trade-offs required in choosing among the alternatives. A subsequent evaluation of the trade-offs suggests that the group objectives can be achieved most effectively and efficiently by providing a partial range of specified services. An important consideration in implementation is that of acquiring adequate funds to finance the selected servicing program. Because of the nature of the services involved, the associated costs are most appropriately allocated according to the benefits-received principle. To ensure an equitable distribution of costs among all beneficiaries, including existing residents as well as owners of vacant properties designated for future development, recognition should be given to the possibility of dividing system costs into three components« capital costs of major facilities which are of general benefit; capital costs of local facilities; and operating costs. The proposed strategy recognizes that the benefits associated with each category of costs accrue to different beneficiary groups, and as such a different type of beneficiary charge is appropriate for allocating the costs associated with each category.

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