Capital Development Fees in Steinbach are going up but not as much as suggested by the administration. City council met in committee Tuesday and received a recommendation to increase those fees by 5% per year for the next three years. Chief Administrative Officer Troy Warkentin told council that inflation in the construction sector is running at 5-7% per year and that, as a result, the city's reserve funds have fallen behind by about $1 million since 2012. He added development fees need to keep pace so that reserve funds are sufficient to maintain infrastructure.

Mayor Chris Goertzen says council felt 5% increases were too high.

"Council chose to stick with a 2.5% increase in capital development fees for any residential development. This is in keeping with what has happened the last number of years."

He adds several councillors noted there has been a bit of a lull in development in recent years and suggested five per cent increases in the Capital Development Fee might cause a further chill.

"Council felt very clearly that we want to send the message that we are open for business, that we want to see continued growth."

Goertzen says every new residence in the city places an added burden on infrastructure and the money from Capital Development Fees goes into reserves funds to keeping it up to date.

A 2.5% adds about $75 to the average development fee of $3,000 per unit.