Off-Site Levies

Purpose of off-site levies

When new areas of a city are developed, they require more than just on-site utilities. Off-site infrastructure - like major roads, water and sewer mains, storm systems, and municipal facilities - must also be built or upgraded to service the additional growth.

How does it work?

Off-site levies (OSL) are a financial tool. Cities uses OSL to help pay for the construction of the infrastructure needed for growth. These funds ensure that developers contribute to the costs of new infrastructure that is required. This helps to balance the financial responsibility between new development and existing taxpayers.

Funding options

There are three ways a city can fund the construction of off-site infrastructure:

Option 1:

Developer pays all costs upfront

When beginning a new project, the developer covers the full construction cost of off-site infrastructure upfront.

Option 2:

City-funded through taxes

Off-site infrastructure is funded entirely by the municipality, using general tax revenue from all residents.

Option 3:

Balance of city and developer

The city plans, constructs and pays for off-site infrastructure upfront, and a portion of those costs are recovered from the developer.

The City of Medicine Hat follows a balanced option (3).

What is funded by off-site levies in Medicine Hat?

Partially reimbursed by private developers (OSL):

  • Major roadways
  • Water lines
  • Sanitary sewers
  • Storm sewers

Funded through general taxation (not OSL):

  • Fire stations
  • Recreation facilities
  • Public Library

The Off-site Levy Bylaw outlines the legislative process in Medicine Hat:

View Bylaw #4157

FAQs

Answers to frequently asked questions about Off-Site Levies.

Off-site infrastructure refers to municipal services and facilities that are located outside the boundaries of a specific development site but are necessary to support that development. This can include things like:

  • Roads and intersections
  • Water and wastewater system
  • Stormwater management facilities
  • Community amenities (e.g., fire halls, libraries, etc.)

An off-site levy is a financial tool used by municipalities to recover the construction costs of infrastructure required to support new development. It ensures that "growth pays for growth" by funding infrastructure required for the development.

Provincial legislation stipulates that levies can only fund new infrastructure construction, not ongoing operations or maintenance. In Medicine Hat, Off-site levies help fund the construction of many essential services including: 

  • Roads
  • Water lines
  • Sanitary sewers
  • Storm sewers 

A municipality may also use off-site levies for the construction of community recreation facilities, fire halls, police stations, and libraries. Currently, the construction of these facilities in Medicine Hat is funded through general taxation. 

Off-site levies are paid by developers at the time of subdivision approval, development permit issuance, or execution of a servicing agreement.

 Levy rates in Medicine Hat are calculated based on: 

  • The projected or actual cost of infrastructure projects
  • The benefitting area (land that will benefit from the infrastructure)
  • The amount of developable land
  • Forecasted growth and development timelines 

Each municipality in Alberta may use different models to determine rates. 

Off-site levies are not a tax.

Taxes are collected to fund general government operations and services, and are typically paid by all property owners.

In contrast, off-site levies are targeted charges applied only to developers to recover the costs of specific infrastructure that directly supports new development. The funds collected through levies are restricted and must be used solely for the infrastructure projects identified in the levy bylaw.

Once off-site levies are deemed paid for a parcel of land, they cannot be collected again.

The City of Medicine Hat uses several tools and practices to ensure transparency and accountability in its off-site levy framework: 

  • Publicly Accessible Estimator Tool: The City provides an Off-Site Levy Estimator Tool that allows developers and landowners to instantly calculate estimated levy amounts for any parcel size in any benefitting area of the city. 
  • Stakeholder Engagement: The City consults regularly with industry groups such as BILD Medicine Hat, the Chamber of Commerce, and the Urban Development Institute to gather feedback and share updates on levy changes. 
  • Council-Approved Bylaws and Amendments: All levy rates and frameworks are governed by Council-approved bylaws which require a public hearing. 

If OSLs have not been previously paid on a parcel of land, it is likely that OSLs are owing. The OSL Estimator Tool can provide an estimate for any particular parcel size in any given area of Medicine Hat. For further questions or confirmation, contact Planning & Development Services.

Off-Site Levy Estimator 

Planning a development project?

Find out if off-site levies are owing on your parcel of land. No login required.

Our OSL Estimator Tool will provide an immediate estimate of the amount owing for OSL's for any particular parcel size in any given area of Medicine Hat. For further questions or confirmation, contact Planning & Development Services

Use Off-Site Levy Estimator

Contact Us

Planning & Development Services

580 1 St SE
Medicine Hat, Alberta
T1A 8E6
403-529-8374
Email us

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