February 19th, 2014 ~ Vol. 84 No. 7
Say no to offsite levies
Crowsnest Pass Herald Front Page
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Pass Herald Reporter
On Tuesday, Feb.11 a delegation of real estate developers told council the moratorium on offsite levies should continue until the community sees measurable growth.

Enid Slack, Director of Institute on Municipal Finance and Governance at the University of Toronto, wrote that offsite levies are designed to pay for future population growth and related capital costs for municipalities. They help municipalities recover costs when new infrastructure, especially water services, sewer systems and roads need to be built.

Ralph Tiegen, of Tiegan Enterprises, says council was relying on flawed data from misleading reports when offsite levies were introduced in 2000.

In 2000, the council of the day was convinced offsite-levies were needed by a UMA Engineering study that assumed 1 percent annual growth based on a 1997 population census. It predicted the Crowsnest Pass would have almost 8000 residents by 2011.

In 2009, a Stantec report predicted the population would increase to almost 40,000. Based on that figure, the report says almost $35 million would be needed to pay for additional infrastructure.

“This is a line item that came from the Bridgegate days when there was grandiose ideas of water treatment plants and distribution lines and so forth going on out at Sentinel,” said Tiegan, referring to the Stantec report.

The Population of the Crowsnest Pass has fallen 12.7 per cent since 1996 compared to a provincial increase of 24 percent over the same period.

Tiegen says the municipality has a legal obligation to consult stakeholders and landowners before instituting off-site levies but this never happened in the Stantec report. According to the Brownlee LLP Off-Site Levy Checklist, municipalities must “re-evaluate projects and estimated costs periodically… as new information becomes available.”

“I take great exception to this document being the foundation to offsite-levies because it’s really flawed,” said Tiegen.

According to Tiegen, the moratorium on offsite levies expires in April 2014.

Even without offsite levies, regular municipal taxes and slow development make for a difficult business climate. Shane Stewart, president of ClansWest Development, says this because the absorption rate, or the rate that new homes are being sold, is too low.

According to Statscan 172 homes and trailers were built in the community from 1995 – 2011, an average of 15.6 homes per year. From 1983 to 1987, there was no private development but the municipality developed 44 lots of which 28 per cent remain unsold to this day.

Stewart says if he is paying $3,500 per unit in municipal taxes and keeping up with a 2.5 per cent rate of inflation, the community would have to build 70 homes a year to match the rate of growth of the municipal budget, a far cry from the latest average of 15.6.

John Pundyk, realtor for Royal LePage, told council the Timberline development in Bellevue has three homes sold. The developer is paying $25,500 per year in taxes since 2007 and the three homes he sold are still not generating as much taxation as he is paying.

“Had he been told at that time that he had to fork out another $300,000 for offsite levies, I can almost speak for him here, he would have said no it just doesn’t make any sense to do that,” says Pundyk.

Stewart says there are approximately 190 lots on the market in the Crowsnest Pass and last year eight were sold. He says the community has 10 years of inventory and that considering Pincher Creek and Sparwood do not have offsite levies, the community should focus being the low cost provider of housing in the Elk Valley.

“I think over time, things will improve... [But right now] the market cannot support property or new home price increases,” said Stewart.
February 19th ~ Vol. 84 No. 7
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