Further suburban growth will be the primary driver of future hikes to utility fees, retired city manager Owen Tobert warned.

The top civil servant, who retired last Thursday, said that outward expansion will press the need for Calgary to reconsider its developer levies, which may in turn lead Calgary to slam into the civic debt ceiling it’s flirted with for many years.

“There are utility increases that are coming (and) you can attribute probably 80 per cent of the cost of the increase to growth,” Tobert told the Herald last week in an exit interview.

“Think of the city as a circle, and as the circle gets bigger, the circumference gets bigger. And there are more and more communities around that circumference that need new servicing.”

The continuing explosion of new population and edge communities in Calgary, along with tougher water and sewage treatment standards, have both led to hulking utility debt for city hall.

In a reckoning of that debt crisis, over the last three years, council has increased water rates by 24 per cent and wastewater rates by 46 per cent, far eclipsing the increases to more commonly debated property tax rates.

Council in 2011 also began charging developers for half the costs of water and sewage servicing for new suburbs. Mayor Naheed Nenshi has signalled he wants the full amount covered when the city and developers renegotiate levies in 2016.

Tobert said hiking acreage levies further will help ease rate increases for existing Calgary homeowners. But that change would also slow the city’s cash flow to pay for new water mains and treatment plant upgrades, making the city borrow more, he said.

It shines the spotlight on the development sectors ongoing discussions of new ways to finance underground suburban infrastructure — but also the proposed controls on the pace of suburban expansion the planning department has tried to impose.

“We don’t have the ability to borrow as much money as developers would like us to borrow to invest in all those new subdivisions to get them growing at once. I think there’s a big decision that’s going to be made in the next say, two to three years that will be: we just can’t afford to grow anymore the way we have been growing,” Tobert told the Herald.

The city runs its utilities as separate entities from its property tax-based operations, meaning they can only rely on fee hikes and mounting debt to fund water services. A spokeswoman for the city’s utility department confirmed that growth is the biggest force behind pressure to hike utility rates, but said the city hasn’t calculated yet this year whether Tobert’s 80-per-cent estimate is correct.

Calgary has remained comfortably below its legal debt servicing limit and debt capacity limits for several years, but has come closer and risks a breaking point without major reforms in how developers operate in Calgary, Tobert said.

“They like orderly, organic growth that just continues on forever. But we have a finite capacity to finance that. We don’t have the ability to borrow as much money as developers would like us to borrow to invest in all those new subdivisions to get them growing at once,” he said.