CANMORE – The Town of Canmore and area developers could be heading toward their latest legal challenge.
Canmore council approved an amendment to its off-site levy bylaw, despite Bow Valley Builders and Developers Association (BOWDA) asking for a postponement to work out differences that could lead to an appeal made with the Land and Property Rights Tribunal (LPRT).
Mayor Sean Krausert said it would have been better to have BOWDA support the bylaw amendment, but felt it was close enough to move forward with council ascent.
“Would there be a benefit in delaying these discussions when there’s been two years of engagement? I’m not certain we’re going to get to a different result,” he said. “It seems to me there’s a methodology difference and you have to go down path A or path B. It seems to be it’s not something that can be negotiated closer together or merge those paths. They’re different paths. I think we are where we are.”
He added he felt the bylaw met requirements of the Municipal Government Act (MGA) and off-site levy regulations, adding it was a fair split between the development community and taxpayers.
Coun. Jeff Mah said he felt “growth has to pay for growth,” and the Town has navigated the fine line of having a fair deal for both existing and future ratepayers.
Brian Talbot, BOWDA’s chair, said it was the association’s belief the differences could have been fixed with further discussion but without such talks a legal route may be the only option.
“BOWDA is disappointed that council has decided to adopt the OSL bylaw substantially unchanged from that which was presented at first reading,” he said. “A bylaw, which in BOWDA's opinion, fails to adequately address provincial legislation regarding the allocation of costs according to proportional benefit. BOWDA's position is confirmed by standing legal precedents.”
In a six-page March 3 letter from BOWDA, the organization stated it was “steadfast in its position that the bylaw does not meet the full intent of the [MGA] and the off-site levies regulations.”
The letter added it was “in our mutual interests to work together to resolve the issues. Resolution of these issues is more productive than litigation,” but that if passed by council “the board of BOWDA will look to ensure the principles of the OSL regulations are respected on behalf of over 250 member businesses using the resources available via the [LPRT].”
BOWDA proposed a working schedule that would see the Town, area developers and CIMA+ – the Town’s consultant for the Utility Master Plan (UMP) – look at cost allocation according to benefitting parties, methodology, updating the UMP and returning to council with it and revising off-site levy bylaw amendment in about 45 to 60 days.
Coun. Jeff Hilstad said he felt the bylaw amendment found a good balance and further discussion wouldn’t be fruitful.
“I thank BOWDA for their concerns, but ultimately the timelines BOWDA believes that additional consultation could occur is not easily achievable as BOWDA states,” he said. “If they were, they would’ve been accomplished over these past couple of years and not now at the 11th hour.”
Council previously directed Town staff to respond to BOWDA’s concerns for 10 projects potentially not meeting provincial legislation, which led to the cost-sharing of one project being amended.
“Administration supports one of the concerns raised by BOWDA, with regard to cost splits between the existing community and growth for the Grassi booster station capacity,” stated a Town staff report. “Other than this project, administration does not recommend further changes to the off-site levy bylaw amendment.”
The lone project change will see the cost-sharing switched for the $2.31 million Grassi booster station capacity upgrade to 46 per cent to 12.3 per cent for a shift of $800,000 to be covered by the municipality.
However, the remaining nine issues brought forward by BOWDA remain unchanged. Though the examples were the ones brought forward by area developers, if an appeal of the bylaw is made it could open up the entirety of the cost-sharing determination and benefitting methodology in the UMP and off-site levy bylaw amendment.
“BOWDA wants to work with the Town to ensure that the off-site levies are fair and fully consistent with the legislation,” stated a Feb. 9 letter from Talbot. “Avoiding legal challenges to the bylaw is in the best interests of both the Town and BOWDA, so that our members can proceed with their developments without a legal challenge causing them delay.”
Whitney Smithers, the Town’s general manager of municipal infrastructure and acting CAO, said the two sides had “differing interpretations of the MGA” when it came to methodology. She noted the Town had done a compliance check with the MGA and received outside legal advice.
Before the vote, council was in camera for more than 90 minutes and had no public questions when back in the public session. Council previously went in camera Feb. 12 for 45 minutes and asked one public question after it returned to session.
The two sides have been negotiating an updated bylaw since mid-2022, with it initially beginning during the development of the 2022 UMP. BOWDA argued in its Feb. 9 letter the Town failed to properly account for benefit to the municipality in 10 projects.
The projects range from reservoir booster stations, lift stations, Smith Creek reservoir and a looping pipe to connect Silvertip reservoir to the rest of Canmore’s water system.
Under the cost allocations in the proposed bylaw – including the one project revision – the Town would pay $1.77 million, developers $23.34 million and Dead Man’s Flats $389,700. The cost splits from BOWDA – using a unit split on some projects – would have the Town pay $5.24 million, developers $18.48 million and Dead Man’s Flats $1.77 million.
In a Feb. 1 letter to the Town, BOWDA asked for a 30-60 day postponement of the bylaw to continue talks since “it is to the benefit of both the Town and the development community to work together on issues of the magnitude found,” in the bylaw. He said BOWDA “has significant concerns … specifically with the allocation of benefits.”
The Town responded to each project listed as a concern by BOWDA, with responses ranging from growth expanding infrastructure demands, Dead Man’s Flats capacity being determined through servicing agreements and cost-sharing having been calculated properly.
The bylaw amendment – along with the cost-sharing for the Grassi booster station capacity upgrade – will have $273.8 million in project costs. It will see developers pick up $153.6 million of costs and the remainder split between Dead Man’s Flats and the Town.
The changes to the cost-sharing for the Grassi booster station capacity upgrade will also see a slightly modified average off-site levy rate for unit types such as commercial, hotel, low-, medium- and high-density.
In Town staff’s response to BOWDA’s Feb. 9 letter, it noted the Town and the MD of Bighorn have servicing agreements that “are structured so that the MD effectively pre-purchased capacity for what they anticipate as projected full build-out for Dead Man’s Flats.”
In the Feb. 9 letter, BOWDA argued there were two different methodologies used for cost allocation by the Town for water infrastructure.
The Town stated it was “difficult to respond to this claim, as it has not been directly identified in previous engagements on the UMP or the off-site levy or in their correspondence.” However, the Town’s response noted it uses the Corvus model for calculating off-site levies – which BOWDA was consulted – and said developers had accepted it being compliant with the MGA.
The response pointed to Section 648.2(1) of the MGA, which outlines a municipality determining an off-site levy methodology.
“This methodology recognizes the impact that the considerations listed above can have on allocating benefit to existing development or to growth,” according to the Town’s response.
“It is applied consistently to water infrastructure throughout the municipality and is consistent with the current off-site levy bylaw and Corvus model.”
BOWDA’s March 3 letter outlined the allocation of benefit had been a concern since at least last summer. It further stated Town staff saying BOWDA agreed to the methodology in determining benefit used is inaccurate.
According to the letter, BOWDA agreed to the Town’s allocation of costs based on determining service factor demands, but not the “allocation of costs based on benefit.”
Under the MGA, an off-site levy can be appealed within 90 days of such a bylaw being passed.
It would go to the LPRT, to schedule a hearing for the matter. A case could be dismissed, but if an appeal is successful the bylaw could be fully or partially rescinded.
“Governing Alberta legislation puts the onus on municipalities to ensure that off-site levies are allocated in proportion to benefit and are fair to all ratepayers, current and future,” stated BOWDA’s March 3 letter.
SERVICE DEMAND FACTORS
- Commercial: 25.88 hectares per unit to 37
- Hotel: 109 hectares per unit
- Residential low density: 25.88 hectares per unit to 14
- Residential medium density: 25.88 hectares per unit to 43
PROPOSED AVERAGE OFF-SITE LEVY RATE PER UNIT
- Commercial: $17,407 (existing bylaw $14,981)
- Hotels: $12,290 (existing bylaw $5,019)
- Low-density residential: $12,106 (existing bylaw $7,490)
- Medium-/high-density residential: $11,509 (existing bylaw: $5,618)
BIG TICKET PROJECTS
- Wastewater treatment plant discharge limit upgrade: $71 million ($35.5 million developer cost)
- Pumphouse No. ? replacement and upgrade: $26.78 million ($11.55 million developer cost)
- Palliser fire station: $17.175 million ( $2.146 million developer cost)
- Smith Creek reservoir and boosting station: $12.78 million ($12.78 million developer cost)
- Wastewater treatment plant expansion phase two: $11.127 million ($8.274 million developer cost)
- Wastewater treatment plant third clarifier addition: $10.2 million ($9.996 million developer cost)
- Three Sisters fire hall: $7.5 million ($7.5 million developer cost)
