The Town of Strathmore is considering increases to offsite levies, the charges developers pay to help with infrastructure costs.
Updates to the current off-site levy bylaw are needed to fund infrastructure costs in Strathmore into the future, according to a presentation by Ethan Wilson, Town of Strathmore project engineer, during the town’s Jan. 13 committee of the whole meeting. But the amount by which the rates will increase is up for debate.
The town’s existing off-site levy bylaw was passed in 2015. Currently, the town’s levies are charged as both a general levies, applicable to all developments, and as special assessments, which are charged in certain areas. The seven special areas differ by geographical extent and charge per hectare, meaning levy charges vary across town, from about $128,000 to $138,000 per hectare.
“This is a bit of a confusing method in terms of you need to find your exact point on the map and then determine which special assessments apply to you,” said Wilson.
Strathmore town council recently approved updates to the town’s master servicing studies, outlining all the infrastructure work the town needs and costs to do that work. These studies were performed by ISL Engineering, an engineering and land services consultant.
ISL was then tasked to perform an off-site levy review, to assess the levy rates needed to fund these infrastructure needs based on the expected date of construction, explained Wilson.
ISL recommends charging levies across three areas in town (northeast, northwest and south), instead of having the special assessment areas, because this would add consistency and make it easier for developers to determine rates before applying for a new development.
Per-hectare rate increases recommended by ISL are most in the northwest ($206,072 from $137,893, a 49 per cent increase), followed by the northeast ($197,490 from $137,893, a 46 per cent increase), then in the south ($151,621 from $128,680, an 18 per cent increase).
Increasing off-site levies may affect the cost of development and will indirectly increase the cost to build a house or commercial development. A hectare of development produces about 12 to 15 lots in Strathmore. Therefore, this planned increase in the northwest, for example, would result in a $4,000 to $5,000 fee increase per lot, depending on lot density. For a new house construction, this equals to about a two per cent increase in total building cost.
Rates were compared among neighbouring communities. The suggested rates would be higher than in High River ($118,271 to $147,093) and Crossfield ($66,826), and the minimum rate in Chestermere ($111,648). The suggested rate in Strathmore south and Strathmore northeast would be lower than the maximum in Chestermere ($202,578), but the rate in Strathmore northwest exceeds this value. Off-site levy rates would still be lower than in Okotoks, Airdrie and Calgary, however.
Town council has the option of not increasing rates to the level recommended by ISL. Keeping rates similar to these communities will help ensure the town stays competitive in the development market, according to town administration. However, if rates are not increased to the amount recommended by ISL, the town would need to supplement infrastructure projects with funding sources other than levies, including taxes.
Councillor Melanie Corbiell raised concern about slowing down development in Strathmore.
“Building has been slow in the last couple years, and I believe it’s been picking up as of late, especially this year, so it would really concern me to hinder or even deter people from wanting to develop here,” she said.
This sentiment was echoed by Councillors Jason Montgomery and Denise Peterson.
“My concern is seeking a 49 per cent increase would be a determinant at this point to development in an area where we have been recently seeing some good progress,” said Peterson.
The updated bylaw will be brought to council in March, said Wilson.
There is also now the ability to charge levies for community recreation facilities, fire halls, police stations and libraries because of changes to the Municipal Government Act (MGA) in 2018. The cost of these items was not included in the ISL analysis. Town administration is planning to determine an applicable levy for recreation and protective services, which will be performed in-house, and brought to council after the off-site levy review.
Sean Feagan, Local Journalism Initiative Reporter, Strathmore Times