Offsite Levy Request for Postponement and Consultation – Approved!

Off-site levies provide a mechanism to recover capital costs incurred for infrastructure to support growth and development. Developers are responsible for any on-site costs as a result of their growth and development, whereas offsite levies are for infrastructure that is off the development site, but supports growth. Off-site levies may be used only to pay for all or part of the capital cost of any or all of the following: (a) new or expanded facilities for the storage, transmission, treatment or supplying of water; (b) new or expanded facilities for the treatment, movement or disposal of sanitary sewage; (c) new or expanded storm sewer drainage facilities; (c.1) new or expanded roads required for or impacted by a subdivision or development; (c.2) subject to the regulations, new or expanded transportation infrastructure required to connect, or to improve the connection of, municipal roads to provincial highways resulting from a subdivision or development; (d) land required for or in connection with any facilities described in clauses (a) to (c.2).” In addition to other allowances. In 2013 the Chamber developed a position and recommendations for the City in relation to the offsite levies and has regularly updated the recommendations since that time based on amended bylaws introduced. 

Since our last correspondence and presentation to Council in 2022, we had the opportunity to meet with City staff in December 2022 to discuss the next steps for the off-site levy consultations with consultations and discussions in 2023 and 2024.

Since that time, there have continued to be outstanding questions and concerns from the development community around the model and cost accounting used.

Through the MGA Off-Site Levy Amendments 2021 Implementation Fact Sheet, it states: “Municipalities must make the following information publicly available:

• Any information or data the municipality relied upon and any assumptions the municipality made in calculating the levy, including, without limitation, any information, data or assumptions the municipality used in models to complete calculations. s.648.2(6)(a).

• The calculations that were performed in order to determine the amount of the levy. s.648.2(6)(b)”.

Why this matters: Offsite levy costs can increase the cost for commercial development or a single family home and limit development and investment. For example, based on a 1/5th acre lot, the levies proposed in Medicine Hat can increase a single-family home by $9,051 per year. When you apply that same formula to the most expensive offsite designated area, the additional cost per single-family home lot on a 1/5th acre parcel is $14,175. 

Similarly, if the City generates approximately $4 million in taxes from a single commercial development area and if we apply the equation of a 1% tax increase for every $800,000 in expense, that commercial development helps to offset 5% of the tax base in commercial tax revenue generated in perpetuity. When rising costs are already limiting new home builds and commercial development, we need to find solutions that will spur our economy and ensure an environment that supports growth and an increased tax base. 

You can view the Chamber’s letter and submission to City Council online. Watch the offsite levy hearing: https://www.youtube.com/live/GFSLzaReL1Q?si=F4LTOodICEzxr0m8&t=3308 and the interview with Chat TV: https://chatnewstoday.ca/2024/09/05/noon-interview-lisa-dressler-sept-5/ as well as the coverage from Chat News Today: https://chatnewstoday.ca/2024/09/03/medicine-hat-city-council-delays-approval-of-new-off-site-levy/. We are pleased that City council voted to postpone the decision until further consultation with the development community occurred and we look forward to working together to find viable solutions that are balanced and fair for all.