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POLICY NO. 130
Page 1 of 9
Approved by Council: September 13, 2021
OFF-SITE LEVIES POLICY
BACKGROUND
The Town of Redcliff adopted the Off-site Levies Bylaw 1844/2017.
The Town has established Off-site Levies Reserve Funds for transportation, water, sanitary
sewer, and storm as outlined in the Municipal Government Act (MGA).
POLICY
1.1
ASSESSMENT
Water, sanitary, storm, and transportation off-site levies were assessed on all properties in the
Town with the passing of Bylaw 1844/2017. The requirement to pay off-site levies is triggered
by the approval of a subdivision or development by the Town. Full payment is required upon
occurrence of a trigger event, unless there is an exemption or the Town agrees to a deferral of
the payment of the off-site levies.
1.2
EXEMPTIONS
There are two types of exemptions, Legislative and Town.
Legislative exemptions are listed in the MGA. Town
exemptions are listed in this policy.
1.2.1 Legislative Exemptions
Municipal Government Act, Section 648
(4)
An off-site levy imposed under this section or
the former Act may be collected once for each
purpose described in subsection (2), in respect
of land that is the subject of a development or
subdivision, if
(a)
the purpose of the off-site levy is
authorized in the bylaw referred to in
subsection (1), and
(b)
the collection of the off-site levy for the
purpose authorized in the bylaw is
specified in the agreement referred to in
subsection (1).
(7)
Where after March 1, 1978 and before January 1, 2004 a fee or other charge
was imposed on a developer by a municipality pursuant to a development
agreement entered into by the developer and the municipality for the purpose
described in subsection (2)(c.1), that fee or charge is deemed
Guiding Principle
If a parcel of land was
previously subdivided or
developed, and off-site levies
or the equivalent to off-site
levies for a certain
infrastructure type (e.g. water)
was paid on that entire parcel,
then any new subdivision or
development on the parcel is
exempt from any future
assessment and payment of
an off-site levy of the same
type. Any specific off-site
levies or the equivalent to off-
site levies that were not paid
are still eligible for payment
triggered by a future
subdivision or development.
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OFF-SITE LEVIES POLICY
(a)
to have been imposed pursuant to a bylaw under this section, and
(b)
to have been validly imposed, and collected
effective from the date the fee or charge was imposed.
RSA 2000 cM-26 s648;2003 c43 s3;2015 c8 s67
1.2.2 Town Exemptions
The MGA is very general in its description of
Development and Subdivision. Many types of
development either do not add to, minimally add to, or
create no demand on the Town's infrastructure and
would therefore be unfairly assed off-site levies without
exemptions. The Town exempting these from paying off-
site levies or partially paying off-site levies at the time of
subdivision or development allows developments and
subdivisions to proceed and encourage economic
activity in the Town. Town exemptions do not exempt a
property from never paying off-site levies but defer the payment of off-site levies to a time when
the purpose of the subdivision or scale of development will create demands on the Town's
infrastructure close to the assessed full value of the off-site levies. Town exemptions can also
be used by the Town to encourage redevelopment in the Town.
Town exemptions/deferrals are grouped into three basic categories:
-
There is no need to collect any off-site levies as the subdivision or development does not
create any new demands on the Town's systems.
-
There is an existing development on the land and it is reasonable to defer payment of
off-site levies on the existing development.
-
The proposed development only uses a portion of the land when compared to typical
development of similar types in the Town.
Town partial exemptions/deferrals will not be applied if there will be less than 5% of the levies in
a particular category left to be paid.
1.2.2.1 Full Deferral of Collection of Off-site Levies
Deferral / Deferral Threshold
Rationale
Excavation or stockpile
Excavation and stockpiles do not typically require the
infrastructure that off-site levies are taken for.
Subdivision of lands to expedite
further subdivision and development
of the lands. Smallest subdivided
parcel size is 4 ha (9.88 acres)
Allows large blocks of land to be subdivided to facilitate
further subdivision and development without the burden
of off-site levies. This kind of subdivision does not
increase the demand on off-site levy infrastructure.
The minimum parcel size threshold is established to
help guide application of this exemption.
Guiding Principle
If a development or subdivision is
likely not to increase the servicing
demands on the roads, and/or water,
and/or sanitary, and/or storm
management off-site infrastructure
then the development or subdivision
may reasonably be exempt from off-
site levies and thresholds be set for
these exemptions.
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OFF-SITE LEVIES POLICY
Deferral / Deferral Threshold
Rationale
Subdivision to facilitate consolidation
of land
Allows land to be subdivided so that one of the two
parcels created can be consolidated into an adjoining
parcel.
Subdivision of land for the purposes
of dedicating a road widening or
municipal reserve or public utility lot
to the Town
As the purpose of the subdivision of the land is to
provide the Town with land required to deliver Town
services and programs it is reasonable not to require
the collection of off-site levies.
Temporary development / land uses
- less than 1 year cumulative
A use that is temporary in nature will only have a
temporary impact on off-site levies infrastructure. The
timeframe threshold ensures that a temporary use is
not extended to permanent use (i.e. temporary for the
first year and then temporary for a second year is no
longer considered a temporary use).
Demolition or removing of a structure Demolition or removal of structures does not increase
the use of infrastructure.
Ancillary building and improvements Allows for various residential, commercial, and
industrial development applications that do not create
any additional demands on off-site levy infrastructure.
Examples of ancillary improvements are fences,
retaining walls, berms, signs, garden sheds, residential
garages, residential decks, etc.
Building alterations
Allows for alterations of existing buildings that do not
change the floor area or the use, as they do not create
any additional demands on off-site levy infrastructure.
Building additions less than 25% of
the original building floor area
Allows for small additions to buildings where there is no
change in the use of the building as the increase in
demand on the off-site levy infrastructure is minimal.
Where successive building additions are done the
cumulative increase in the building floor area must be
less than 25%.
Building additions less than 25% of
the original building floor area shall
have the full amount of the levy
deferred
Allows for small additions to buildings where there is no
change in the use of the building as the increase in
demand on the off-site levy infrastructure is minimal.
Where successive building additions are completed
and the cumulative is above the 25% threshold of the
original building floor area, the off-site levies will be
charged as a building exceeding 25% of the original
building including all additions from the original
building.
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OFF-SITE LEVIES POLICY
Deferral / Deferral Threshold
Rationale
Building additions more than 25% of
the original building floor area shall
be charged the full amount of the
levy for the increase in the building
floor area
Where a structure already exists and is serviced, it is
not reasonable to charge off-site levies on the existing
serviced capacity. However, it is logical to charge the
off-site levies on the increase in servicing the Town is
required to provide.
1.2.2.2 Partial Deferral of Off-site Levies for Existing Development
Deferral / Deferral Threshold
Rationale
Replacement of a structure within 1
year of demolition or destruction of
the prior structure. Levies shall be
calculated as if the structure is
existing.
Allows for the replacement of a structure with a new
structure of the same use on the same property. An
increase in the size of a replacement structure is
governed under the rules for building additions.
The timeframe is intended to encourage the
replacement of the structure in a timely manner.
Replacement of a structure greater
than 1 year from the demolition or
destruction of the prior structure.
Levies shall be calculated as if the
structure is existing with the
exception that any increase in the
size of the structure shall be charged
a levy.
It is reasonable that properties that have been serviced
in the past but are no longer using the Town's
infrastructure due to demolition be given a partial
exemption equal to the demand placed on the Town's
infrastructure prior to demolition. In this case any
increase in the size of the structure is not eligible for an
exemption.
Change of use where the increase in
demand created by the change in
use is less than 25% of the original
demand shall have the full amount of
the levy deferred.
Allows for changes in use that do not substantially
increase the demand on the off-site levy infrastructure.
Where successive changes in use are done, if the
increased demand from the original use exceeds the
25% threshold the off-site levies will be charged as a
change in use with demand exceeding 25% of the
original demand.
Change of use where the increase in
demand created by the change in
use is more than 25% of the original
demand shall be charged the full
amount of the levy for the increase in
demand.
Where a use is already approved it is not reasonable to
charge off-site levies on the existing serviced capacity.
However, it is logical to charge the off-site levies on the
increase in servicing the Town is required to provide.
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Deferral / Deferral Threshold
Rationale
Change of use of a parcel to comply
with the Municipal Development
Plan, Land Use Bylaw, Area
Structure Plan, or Area
Redevelopment Plan shall be given a
deferral of 25% on off-site levies
after the increased demand on the
Town's infrastructure is calculated.
Planning documents adopted by Council, especially in
the case of redevelopment plans, create situations
where it is in the interest of the Town to encourage the
redevelopment of properties.
Granting a deferral on the off-site levies for a parcel's
use to be changed to conform with Town planning
documents gives property owners an incentive to
redevelop to be consistent with planning documents
adopted by Council.
Intensification of activities on a
parcel where the increase in demand
created by the intensification is less
than 25% of the original demand
shall have the full amount of the levy
deferred.
Allows for intensification of the activities on a site that
does not require additions to or new buildings
(processing / production facilities, storage, etc.) where
the intensification does not substantially increase the
demand on the off-site levy infrastructure.
Where successive intensification in activities occur, if
the increase demand from the original use exceeds the
25% threshold, the off-site levies will be charged as an
Intensification of Land Development with demand
exceeding 25% of the original demand.
Intensification of activities on a
parcel where the increase in demand
created by the change in
intensification of activities is more
than 25% of the original demand
shall be charged the full amount of
the levy for the increase in demand.
Where a level of activities on a parcel is already
approved it is not reasonable to charge off-site levies
on the existing serviced capacity. However, it is logical
to charge the off-site levies on the increase in servicing
the Town is required to provide.
1.2.2.3 Partial Deferral of Off-site Levies for Very Large Parcels with Small Development
Deferral / Deferral Threshold
Rationale
Partial development of a residential
lot. The off-site levy payable will be
calculated on the area of
development divided by 15%. Any
levies not paid will be due and
payable at the next trigger event.
The typical site coverage of a developed residential lot
is in the range of 30% to 45%. The least coverage of a
developed residential lot in the Town is approximately
12%.
Where a residential development is proposed for a
parcel where the proposed development is much
smaller than the area of the parcel, in consideration
that the off-site levies are calculated on a land area
basis and the proposed development will not use the
full service, it is reasonable to allow deferral of some of
the off-site levies until another trigger event.
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Partial development of an industrial /
commercial lot. The off-site levy
payable will be calculated on the
area of development divided by 7%.
Any levies not paid will be due and
payable at the next trigger event.
The typical site coverage of average commercial and
industrial lots is in the range of 15% to 30%. The least
coverage of a developed commercial and industrial lot
in the Town is approximately 2%.
Where an industrial or commercial development is
proposed for a parcel where the proposed development
is much smaller than the area of the parcel, in
consideration that the off-site levies are calculated on a
land area basis and the proposed development will not
use the full service, it is reasonable to allow deferral of
some of the off-site levies until another trigger event.
1.3
VALUE OF OFF-SITE LEVIES
The value of off-site levies is calculated at the time of payment, not at the time of the trigger
event.
1.4
CALCULATION OF OFF-SITE LEVIES
Once it has been determined that no exemption or only a partial exemption to the payment of
the off-site levies is applicable, the value of the levies will be calculated in accordance with this
policy.
-
In an effort to emphasize transparency, a copy of the calculations will be provided to the
developer.
1.5
PAYMENT OF OFF-SITE LEVIES
Except as outlined in this Policy, off-site levies are due and payable prior to:
-
The release of a Development Permit by the Town.
-
The endorsement of the Plan of Subdivision by the Town.
1.5.1 Deferment of Payment of Off-site Levies
Payment of off-site levies may be deferred by a developer under the following conditions:
-
Total levies to be collected are greater than $750,000 including any offsetting amounts
for off-site levies infrastructure to be installed by the developer.
-
Security for the total value of the levies in the form of an Irrevocable Letter of Credit is
provided to the Town by the developer.
-
The developer enters into a Deferral Agreement with the Town which will contain the
following clauses:
o Developer acknowledges that off-site levies assessments are recalculated yearly
and that the developer is responsible to pay the current off-site levies rate. This
includes incremental payments.
o Early payment of the off-site levies is allowed without penalty.
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o Maximum deferment period is a maximum of two (2) years and the levies are to
be paid to the Town in installments as follows:
-
25% down payment
-
50% at the 1st year anniversary
-
Remainder at the 2nd year anniversary
o Security held will be released so that the Town only retains security in the
amount of the unpaid off-site levies.
1.6
OFFSETTING CREDITS
Where a developer is required to install off-site levies
infrastructure as part of their development, the developer may
claim a credit towards the off-site levies payable by the
developer subject to the following:
-
The offsetting credit can only be applied against the
same category of off-site levies infrastructure. (i.e.
water to water, sanitary to sanitary, etc.)
-
The credit will be based upon:
o Initially, a Town approved professionally prepared estimate of the costs of the off-
site levies infrastructure to be installed, and
o Adjusted after construction to the actual costs of the off-site levies infrastructure
installed and approved by the Town. It is the responsibility of the developer to:
-
Ensure that the actual construction costs are clearly identified separately
from the rest of the project costs.
-
Any change orders that impact the cost of the off-site levies infrastructure
must be approved in writing by the Town to be eligible for an offset credit.
1.7
DISBURSEMENT OF OFF-SITE LEVIES RESERVE FUNDS
Funds in the Off-site Levies Reserve Funds will be disbursed once a project has been
completed. There are three different scenarios under which off-site levies funds will be
disbursed:
-
Town project.
-
Developer project in the Town's 5-year capital plan,
-
Developer project not in the Town's 5-year capital plan.
1.7.1 Annual Reserve Fund Priorities
The Town will, on an annual basis, develop a financial plan that outlines anticipated:
-
Off-site levies receipts,
-
Off-site levies project costs,
-
Balances owing to developers for off-site levies infrastructure,
Guiding Principle
Developers that pay for the
construction of off-site levy
infrastructure as part of their
development should not be
required to also pay the levy for
that category of infrastructure
up to the cost of infrastructure's
cost of construction.
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-
Off-site Levies Reserve Funds balances,
-
Payment of balances owing for off-site levies projects. Payments shall be made on the
following priority basis:
o Small balances (under $10,000) will be paid out first to optimize efficient
administration.
o The oldest projects will be paid out next (i.e. 2015 projects paid out before 2016
projects).
o Developer projects will be paid out before Town projects.
o Projects in the same year will be paid out on a pro-rated basis (i.e. if Party A is
owed $100,000, Party B is owed $200,000, and there is $60,000 available for
repayment then Party A would receive $20,000 and Party B would receive
$40,000).
1.7.2 Town Project
Town projects are off-site levies projects that are undertaken by the Town through the capital
projects plan.
Where there is sufficient money in the Off-site Levies Reserve Fund for the category of
infrastructure to be built, the Off-site Levies Reserve Fund may be used to pay for the project
costs directly as the project proceeds (i.e. for progress payments). Where there is insufficient
monies in the Off-Site Levies Reserve Fund, the Town shall front end the costs of the off-site
levies infrastructure and may recover the monies once they become available in the Off-site
Levies Reserve Fund for the category of infrastructure built.
1.7.3 Developer Project in the Town's 5-Year Capital Plan
Developer projects in the Town's 5-year capital plan are off-site levies projects that are
undertaken by the developer as the improvements are required to support their current
development.
Off-site Levies Reserve Funds will be disbursed to the developer:
-
When there are sufficient monies in the Off-site Levies Reserve Fund for the category of
infrastructure to be built, and
-
Once the Town issues (following the Town's standard procedures) a Construction
Completion Certificate (CCC) for the project. The developer's warranty and
maintenance obligations with respect to the off-site levies infrastructure installed remain
as per the Service or Development Agreement between the developer and the Town.
Warranty and maintenance obligations are not eligible for reimbursement from the off-site levies
funds.
1.7.4 Developer Project not in the Town's 5-Year Capital Plan
Developer projects not in the Town's 5-year capital plan are off-site levies projects that are
undertaken by the developer as the improvements are required to support their current
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development, however the project is not included in the Town's 5-year capital plan. Off-site
levies funds will be disbursed to the developer once the following conditions have been met:
-
There are sufficient monies in the Off-site Levies Reserve Fund for the category of
infrastructure to be built,
-
The project is placed on the Town's 5-year capital plan, and
-
The Town issues a Final Acceptance Certificate (FAC) for the project.
1.7.5 Interest on Unpaid Balance
Where the Town or a developer constructs off-site levies infrastructure and there is insufficient
money in the Off-site Levies Reserve Fund for the category of infrastructure, interest accrues
from:
-
Town project, issuance of a final completion certificate to the contractor,
-
Developer project in the Town's 5-year capital plan, upon the Town issuing a
Construction Completion Certificate (CCC),
-
Developer project not in the Town's 5-year capital plan upon:
o Council approving a 5-year capital plan with the project on it, and
o The Town issuing a Final Acceptance Certificate (FAC).
Interest will be credited to the developer annually and at the time of final payment.