Off-site levies

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An off-site levy is one of several financing sources that municipalities use to pay for infrastructure costs associated with growth. Off-site levy charges are used to transparently and equitably allocate off-site infrastructure capital costs to those that benefit (i.e., this ensures that growth pays for growth).

 

  View off-site levy rates and City assist

  View map

  View Bylaw 4157 (Off-Site Levy Bylaw)


Medicine Hat has continued to experience growth and is forecasted to grow by about 50,000 people in the next 50 years. Growth provides numerous benefits to Hatters, including support for local businesses, arts and culture and community vibrancy. At the same time, growth creates a need for investment in infrastructure.

When a new community or commercial subdivision is being built, the developer pays for the cost of infrastructure that is within the area. This internal infrastructure includes things like roads, sidewalks, sewer lines, bus stops etc. But when a new community is built, there are also impacts on infrastructure that is outside that specific community. For example, there is heavier usage of a major road, or increased pressure on sewage treatment system.

So the City of Medicine Hat (like many other municipalities) charges developers a levy that helps pay for the cost of the off-site infrastructure. This helps to ensure that growth pays for growth. Off-site levies are just one of the tools the City uses to help attain financial sustainability.

Learn more about off-site levies and other fees and levies for development in this 2013 document created by Alberta Municipal Affairs staff and stakeholders: MGA Review Discussion Paper - Fees and Levies (PDF).

 


Under Alberta's Municipal Government Act (MGA), off-site levies can be collected for "hard services", meaning:

1 - New or expanded facilities for the storage, transmission, treatment or supply of water;

2 - New or expanded facilities for the treatment, movement or disposal of sanitary sewage;

3 - New or expanded storm sewer drainage facilities;

4 - New or expanded roads required for or impacted by a subdivision or development; and

5 - Land required for or in connection with any of the above described facilities

6 - Included in 2017: New or expanded community recreation facilities, libraries, police or fire facilities.

7 - Included in 2017: Two or more municipalities may provide for an off-site levy on an inter-municipal basis. This will allow a benefiting area to extend across more than one municipality.

 

NOTE: The current City of Medicine Hat Off-site Levy Bylaw does not include items (6) or (7). These changes will be incorporated in a new or amended Bylaw.

A further amendment to the MGA in 2017 stipulates that off-site levies cannot be imposed on land owned by a school board, which is to be developed for a school. This will also be incorporated into a new or amended City Bylaw.



Both the City and developers contribute.

The City of Medicine Hat uses a method to calculate how much growth is projected to occur in a certain area and how much impact that growth will have on infrastructure. The City then figures out a way to share the costs of growth. The City and developers both contribute to the cost of off-site infrastructure. 

Ultimately, does the home buyer pay?

Buyers of new homes do end up paying for some of the cost of the infrastructure. Typically, when the developers pay levies to cover the cost of growth infrastructure, the charges are included in the cost of a new house. Again, the infrastructure we’re discussing is critical to ensuring 'Hat residents continue to live in complete communities with the services they need.



Yes.
Similar legislative charges are imposed by municipalities in most provinces, including British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia. In most of these provinces, municipal or planning legislation provides the authority to impose legislative charges. Ontario has the most extensive legislation as the only jurisdiction with a separate Development Charges Act.

Some municipalities impose uniform charges, often calculating the charges on a per-hectare or per-lot basis. Others impose land use specific charges, and typically calculate the charges according to residential unit type or per-square-metre of gross floor area.



View rates by node and City assist

To calculate off-site levy rates, the City uses the Corvus model, which projects the infrastructure required to support and maintain cost-effective and orderly growth. The City has allocated those costs to the lands in nodes that will benefit from the new or expanded infrastructure so that developers and people subdividing land will pay an amount proportionate to the area being developed or subdivided.

The current Off-site Levy Bylaw was approved by City Council on September 4, 2013. The City reviews the rates each year. Provincial legislation dictates that levy collection is subject to annual reporting requirements.

The City of Medicine Hat is divided into 18 different "nodes", under the Off-site Levy Bylaw. Each area has a different off-site levy rate (per hectare) based on factors which ensure that each development carries an equal share of costs associated with the needs of each node. In most of the nodes, there is expected to be ongoing development for at least a couple of decades. In nine of the nodes, development is not anticipated until further in the future.

See more about the nodes in Schedule E of the Off-site Levy Bylaw.

See nodes map below.



Yes.
Think of it like a fee discount, with the intent of attracting development. This "municipal assist" is a scaled subsidy program, whereby the City of Medicine Hat agrees to assist with part of the off-site infrastructure fees.

This measure was approved by City Council in 2013 to encourage new development in Medicine Hat, particularly to attract new investment to the city. The assist levels are higher in areas where the City would most like to encourage new development (intensification areas).

Current subsidies:     30% (most City areas)     90% (priority 1 intensification areas)

Intensification is one of the main policy goals of the Municipal Development Plan (MDP). The intensification nodes used in the Off-site Levy Bylaw are generally aligned with the intensification area in the MDP.

See nodes map and rate chart below. 

 


What areas in Medicine Hat are affected by the Off-site Levy Bylaw?

All areas of the City are affected by the Off-site Levy Bylaw. See map below.

 

After 2020, will the City's municipal assist program for off-site levies continue?

City Council has determined that 90% Municipal Assist will continue in Priority 1 Intensification nodes until December 31, 2022. Whether or not the assist program for other nodes continues past 2020, and the percentage of any potential assist, will be determined by City Council at a later date. 

 

When must an offsite levy be paid?

Off-site levies must be paid at the time of development permit approval for development permits, and at the time of subdivision endorsement for subdivision applications.

Why weren't the off-site levies paid when the lot was originally created or building constructed?

The City's first Off-site Levy Bylaw was adopted in 1976. Off-site levies were not charged on subdivision nor developments approved prior to that. New developments on these sites would be subject to paying off-site levies, if they have not been paid previously. Off-site levies may only be charged once on a site.

 

Are some areas still affected by previous off-site levy bylaws?

Yes. There are some off-site levies still in effect under previous bylaws for some subdivisions. For detailed information, see Schedule C of the current Off-site Levy Bylaw.

 


City nodes map

Click image to download more detailed map (PDF).

Development Nodes WOLegend


Off-site levy rates and City assist

Rates effective January 1, 2019 - December 31, 2020.

Node # Node Name Area Classification Municipal Assist Total levies
($ per hectare)
0 Land outside nodal boundaries
Established See note below $234,602
1 Downtown Priority 1 intensification 90% $407,359
2 River Flats Priority 1 intensification 90%
$198,845
3 IXL Area Priority 1 intensification 90%
$173,500
4 Burnside Estates Priority 1 Greenfield 30% $233,936
5 Brier Run Priority 1 Greenfield 30%
$212,644
6 Cimarron / SW Lands / Saamis Heights 7
Priority 1 Greenfield 30%
$301,400
7 Suntec Lands Priority 1 Greenfield 30% $199,908
8 Airport Lands Priority 1 Greenfield 30% $292,788
9 Box Springs Business Park Existing under development 30%
$246,672
10 Canyon Creek Existing under development 30%
$210,648
11 Hamptons Existing under development 30% $208,887
12 Ranchlands 4 Existing under development 30%
$149,390
13 Southlands 7 Existing under development 30%
$218,720
14 Southlands 6C Existing under development 30%
$208,887
15 South Vista 11 Existing under development 30%
$185,507
16 Ranchlands 3C Existing under development 30%
$139,557
17 River Ridge Existing under development 30%
$183,201

For detailed breakdowns of the above levy rates (ie: road, water, sanitary sewer, storm sewer), see Tables A-1 and A-2 in the Off-site Levy Bylaw.

♦  The Municipal Assist for Node 0 is site-specific and is determined on a case-by-case basis.

 


Questions about off-site levies? Contact us:

Planning & Development Services
Second floor, City Hall
580 1st Street SE
Ph. 403.529.8374
pbe@medicinehat.ca