For the last couple of months council has spent a lot of time talking about development. One of the major components of the discussions has been around offsite levies. This warranted a two hour discussion with our planning department and our engineers to get a better understanding of the big picture. We have also heard a lot from developers and business people the negative impact of offsite levies as they increase development costs. What is also apparent is although we have spent lots of time talking about levies, the average tax payer has no idea what they are or what they are used for. I thought I would share some information so we are all on the same page.
So first off, what are offsite levies? Essentially back in 1985 Council imposed a bylaw that we start collecting offsite levies on future developments. Existing developments would eventually pay when they are re-developed which could take decades. An example someone buys a lot, removes a mobile home and builds a bungalow, at that point we would collect offsite levies. We collect them to help pay only for water and sewer future capital improvements. To put it simply, at some point we will need to make the water plant bigger as the community grows and so the people who create that need (i.e. people who develop and add to the system) would help pay for those upgrades. So every time a development occurs we collect some additional money to put in a pot to be used later. The problem for developers is this adds costs to any project. On a home this is usually around $3000-$5000 but on a commercial or industrial lot this can be tens of thousands. The problem for the taxpayer is that if we don’t collect it than they are forced to pay down the road for an issue they may not have created. That then leads to the debate about whether the taxpayer should pay some? They benefit from improvements to the system, and additional tax payers help contribute to the overall cost of running the town so growth does help them. What is tricky is quantifying that benefit. So do we continue to collect it or just make the taxpayer pay for it? This is something that is obviously not new to Slave Lake, we have been doing it since 1985 and most towns and cities do it. MD’s typically don’t because there revenues, growth and expenditures are usually different so the point is we don’t have to collect them. How do we fund future projects if we don’t collect though? To add to the burden we have to keep track of who pays and who didn’t and because some of the older properties could be decades before they do redevelop that’s a bit of a nightmare to keep track of. So what did council come up with? First off we are interested in only collecting on new properties and not redeveloped properties. We are interested in examining the costs to see if there is a scenario where we share in the costs ie developers and tax payers as we want to encourage growth. So administration is going to collect so more info and we will discuss this more in the coming months.
In the end we have to be able to pay not only for the things we have today, but we also need to have a plan to pay for the future. In the past development pays for development which is a great slogan, but you have to wonder if that philosophy actually hurts growth. Although we have seen new buildings and businesses added over the last ten years, our population really has not changed. This coupled with the current economic situation and our need to diversify warrants a discussion about changing the system. It will be a while before we flush all those pieces out, but just wanted to let you know what we are working on