: off-site levy policies -...

City Council Agenda

February 2, 2015 / File No.:8000-2-1

CITY COUNCIL AGENDA REPORT

Subject: OFF-SITE LEVY POLICIES Recommendation(s)

1. That Council Policy C-P&E-08, Off-site Levy Framework, provided as

Attachment 1 to the Agenda Report dated February 2, 2015, be approved.

2. That Council Policy C-P&E-09, Off-site Levy City Front-Ending Prioritization Criteria, provided as Attachment 2 to the Agenda Report dated February 2, 2015 be approved.

3. That Administration provide to Council a one-year evaluation of Council Policy

C-P&E-08 Off-site Levy Framework, and Council Policy C-P&E-09, Off-site Levy City Front-Ending Prioritization Criteria in February 2016.

4. That any off-site levy funds collected in 2014 be dispersed in the same manner as per previous years during the Off-site Levy Bylaw update scheduled for March 2015.

Purpose of Report To present Council the Off-site Levy Framework and Off-site Levy Front-Ending Prioritization Policies for approval. Council Direction On January 12, 2015 the following motion was passed: (C16-2015) That Council Policy C-P&E-08, Off-Site Levy Front-Ending, Offsetting and Annual Recovery and Council Policy C-P&E-09, Growth Capital Projects Prioritization Criteria be postponed until February 2, 2015.

City Council Agenda

February 2, 2015 / File No.:8000-2-1

On November 24, 2014 the following Council motion was passed: (C530-2014) 1. That the following proposed Council policies, included as Attachments 1, 2, and

3 respectively to the ‘Off-Site Levy Policies” agenda report dated November 2014 be received for information:

o C-P&E-08, Off-site Levy Framework o C-P&E-09, Off-site Levy City Front-Ending Prioritization Criteria o C-P&E-10, Inter-municipal Utility Infrastructure Excess Capacity

2. That Council members provide feedback to Administration by December 8,

2014 and that Administration bring policies Policy C-P&E-08 and Policy C-P&E-09 back in January 2015 for Council approval.

3. That Council refer Policy C-P&E-10 to the Intermunicipal Affairs Committee for

discussion at the February 2015 meeting. 4. That Administration bring forward a report examining the implementation of

Debt Sharing as an Off-site Levy Council Policy in the fourth quarter of 2015. Background and Discussion On January 12, 2015 Administration presented CP&E-08 Off-site Levy Framework and CP&E-09 Off-site Levy Front-Ending Prioritization policies for approval. Policy C-P&E – 08, Off-site Levy Policies was created to provide clarity and direction with respect to the issues of front-ending, offsetting and annual recoveries of Off-site levy infrastructure and implementation through the Off-site Levy Bylaw. Policy C-P&E – 09, Off-site Levy Front-Ending Prioritization Criteria was created to provide a clear process for the City of St. Albert to follow when considering front-ending off-site levy infrastructure. The three staged process will allow Administration to provide recommendations that are in line with Council goals and priorities and corporate standards. Both policies were developed over the course of 2014 with significant stakeholder input and feedback. The policies were initially presented to Council on November 24, 2014 and were to be brought back for approval on January 12, 2015; however on January 12, 2015 a Developer asked for an additional consultation time period of two weeks. Administration has met with the Developer and addressed their questions and concerns with respect to the policies and as such, is requesting Council approval of the policies. The policies before Council today are the same as what were brought forward on January 12, 2015.

City Council Agenda

February 2, 2015 / File No.:8000-2-1

Stakeholder Communications or Engagement Significant consultation with numerous stakeholders including the Urban Development Institute (UDI) and the City’s legal and finance departments. Additional stakeholder consultation occurred the week of January 12, 2015 to further clarify the functioning of the Off-Site Levy Policies. Implications of Recommendation(s) a) Financial:

The Policies provide a clear protocol in off-setting calculated off-site levies to front-end leviable infrastructure as well as the pro-rata reimbursement process for front-ending parties. This clarity should facilitate expectations, timelines and requirements when an off-site leviable project or portion thereof is constructed by a stakeholder.

b) Legal / Risk: The extensive consultation process between development industry and Administration, in the opinion of the City, has fulfilled any obligation to negotiate with the various stakeholders.

Strategic Connections a) Council’s Strategic Outcomes and Priorities (See Policy C-CG-02)

• CULTIVATE ECONOMIC PROSPERITY: A diversified, robust and resilient economic foundation to support growth and community service delivery.

• CULTIVATE EXCELLENCE IN GOVERNMENT: A responsive, accountable government that delivers value to the community.

• CULTIVATE SUSTAINABLE INFRASTRUCTURE AND SERVICES: A growing community that has balanced development and management of civic facilities, transportation networks and related services.

b) Long Term Plans (e.g. MDP, Social Master Plan, Cultural Master Plan, etc.)

• Utility Master Plan Update, 2014 • Municipal Development Plan, 2007 • Transportation Master Plan, 2009 • Stormwater Master Plan, 2004

c) Corporate Objectives (See Corporate Business Plan)

• Deliver programs and services that meet or exceed our standards • Exercise strong fiscal management • Ensure our customers are very satisfied

City Council Agenda

February 2, 2015 / File No.:8000-2-1

Attachment(s) 1. City Council Policy C-P&E-08, Off-site Levy Framework (feedback

incorporated) 2. City Council Policy C-P&E-09, Off-site Levy City Front-Ending Prioritization

Criteria (feedback incorporated) 3. Letter of acknowledgement, as a result of additional stakeholder consultation Originating Department(s): Planning & Engineering

Author(s): General Manager Approval:

Kate Polkovsky, Long Term Planning Engineer/Tracy Allen, Director Patrick Draper Acting GM, Planning &Engineering

City Manager Signature:

Date:

Purpose To provide a framework for the transparent, responsible and integrated administration of the City’s Off-site Levy Bylaw and the identified municipal infrastructure required to support the sustainable growth and development of undeveloped lands within St. Albert. Policy The City of St. Albert promotes an attractive environment that supports sustainable growth and development while building a diversified tax base. Growth and development is done in a fiscally responsible and transparent manner through appropriate corporate performance, a key component of which is planning and developing municipal infrastructure that effectively and efficiently meets the present and future growth needs of the City. Key elements of the Off-Site Levy Framework process are to:

1. Provide a level of clarity to the development industry in the functioning of the off-site levy program;

2. Clarify the process to which benefitting stakeholders can facilitate the development of off-site levy infrastructure and the avenue by which they can recover any over-expenditures;

3. Provide a transparent operation of the off-site levy program. The Bylaw shall continue to conform to the Municipal Government Act of Alberta. Definitions In this policy, “Annual recoveries” means the process by which a Developer that has paid the cost of design and construction of agreed “Qualified” off-site infrastructure is to be reimbursed for the costs in excess of the Developer’s proportionate share. “City” means the municipal corporation of the City of St. Albert. “City Engineer” means the professional engineer or individual so designated by the City Manager, or that individual’s appointed designate.

C-P&E-08

City of St. Albert CITY COUNCIL POLICY

Off-Site Levy Framework

AUTHORITY City Council

APPROVED Res. No. mm dd

REVISED Res. No. mm dd

City of St. Albert CITY COUNCIL POLICY C-P&E-08

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ATTACHMENT 1

“Construction Completion Certificate (CCC)” means a certificate issued by the City to signify that off-site infrastructure has been constructed to City Standards but is still under warranty and may be subject to minor deficiencies corrections. Once any infrastructure (leviable or non-leviable) has received a CCC (notwithstanding any warranty period prior to FAC) the City assumes ownership of that infrastructure. “Final Acceptance Certificate (FAC)” means a certificate issued by the City at the expiry of a warranty period provided the infrastructure is free of defects and deficiencies at that time. “Front-ending” means the process governing when a Developer enters into an agreement with the City to construct qualified off-site infrastructure. “Off-Site Levy Bylaw” (also referenced in this policy as “Bylaw”) means the most current version thereof. “Off-Site levy” means the amount calculated in accordance with the Bylaw that is to be paid by the Developer to the City as the Developer’s contribution towards the costs of constructing municipal infrastructure projects defined and described within the Bylaw, which projects each fall into one of the following categories: i) New or expanded facilities for the storage, transmission, supplying or treatment of water to

storage facilities; ii) New or expanded facilities for the treatment, movement or disposal of sanitary sewage; iii) New or expanded facilities for the treatment and conveyance of storm sewer drainage; iv) New or expanded roads required for or impacted by a subdivision or development; and, v) Land required for, or in connection with, any of the above described facilities. “Offsetting” means the process by which the amount payable by a Developer for off-site levies is offset against the Developer’s cost to construct qualified off-site infrastructure identified within the Bylaw. “OSL” means off-site levy. “OSL Framework” means the framework by which the Bylaw is administered, including relevant policies and guiding principles that may be developed and approved from time to time. “Qualified off-site infrastructure” means municipal infrastructure that is identified in the Bylaw. “Security” means a Letter of Credit or a cash deposit held as a security by the City to ensure that the engineering and landscaping components of a development project are completed to City Standards in accordance with accepted civil engineering and landscape design drawings. Responsibilities 1. City Council is responsible for:

a. Using the identified OSL framework to guide Council’s decision making with respect to the management of the Bylaw.


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ATTACHMENT 1

b. Considering front-end servicing options including potential funding sources. c. Approving allocated budgets through the Budget process. d. Approving updates to the OSL rates model. e. Approving updates to the Bylaw a minimum of every three years as per the

requirements within the Bylaw. f. Ensuring appropriate resources are available to implement the OSL Framework.

2. City Manager or designate(s) is responsible for ensuring that:

a. A comprehensive Administrative Policy is in place to support implementation of the OSL Framework.

b. Stakeholder consultation is undertaken during the creation, review and updating of Administrative Policies.

c. An annual report on the outcomes of the OSL Framework is presented to Council.

Standards 1. Off-site levy obligations

The subdivision and/or development of all land triggers off-site levy obligations unless off-site levies have been previously collected for that land. The City may impose new off-site levies as they become authorized by statute. The City will not permit off-site levy deferment or installment payments.

2. Off-site levy infrastructure offsetting and front-ending

The City will permit offsetting of levies to encourage Developers to front-end construction of off-site levy infrastructure. Off-site levy infrastructure front-ending and offsetting will only be permitted when: a. The front-ending and offsetting request pertain to qualified off-site infrastructure within

a single levy category. Front-ending and offsetting between levy categories will not be permitted.

b. The Developer receives written approval from the City Engineer approving the request to front-end qualified off-site infrastructure, including the estimated construction costs thereof. In the event there are other front-ending parties who are still owed monies in that specific levy category, the City will notify in writing all impacted parties of the request to offset. Should any objections be received by the City, the Developer will not be permitted to offset until all other front-ending parties have fully recovered their outstanding monies.

Should a Developer be approved to offset qualified infrastructure, the following will apply: a. A Developer may only offset a maximum of 80% of the estimated construction costs of

the qualified infrastructure within a levy category. The estimated construction costs


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ATTACHMENT 1

must be approved by the City Engineer.

b. If the estimated cost of the front-ended project is greater than the off-site levies payable, the Developer will be required to provide security on the difference. The final amount of offsetting permitted must not exceed the total amount of off-site levies payable on a category basis.

c. During construction of the qualified infrastructure, the Developer must immediately notify the City Engineer if there are any conditions that will individually or cumulatively result in the final construction costs exceeding the estimated construction costs by more than15%. The Developer must obtain written approval from the City Engineer in order for the additional costs to qualify for reimbursement.

d. Once the construction of the qualified infrastructure is complete and has received CCC, the City will complete a final reconciliation of the remaining 20% estimated construction costs, pending funding availability. Furthermore,

i. if the actual cost of construction of the qualified infrastructure is less than the off-site

levies payable, the Developer must immediately pay the difference to the City;

ii. if the actual cost of construction of the front-ended project is greater than the off-site levies payable, the City will reimburse the developer as per the annual recoveries policy. Interest will be earned and paid on the outstanding monies owing at the rates set in the Bylaw and will begin to accrue upon issuance of CCC.

3. Annual Recovery

a. The avenue for front-ending parties to recover funding for front-ended infrastructure is through a claim reimbursement method. Recovery for front-ending parties will be done on an annual basis and will be subject to funding availability in the specific off-site levy category. Reimbursement for front-ending funds is levy category specific and reimbursement for a front-ending project in one levy category from funds in another levy category will not be permitted. If there are no front-ending parties eligible for reimbursement, any off-site levies collected will remain in the specific levy category reserve for future qualified off-site levy infrastructure.

b. Annual recoveries will be done on a pro-rata share basis; that is, all front-ending

parties who are eligible for reimbursement will receive their corresponding share of reimbursement based on the amount of funds available. The pro-rata share basis will be applied until a Developer is owed $100,000 or less. At that time, any Developer who is owed $100,000 or less will have priority and be fully reimbursed the remaining amount the following calendar year (subject to available funds). The pro-rata share basis would then be applied to the remaining front-ending parties who are eligible for reimbursement of amounts greater than $100,000. A report summarizing the outcomes of the OSL Framework will be presented to Council annually.


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ATTACHMENT 1

Purpose To provide a set of principles that will be used to prioritize and assess which new off-site levy municipal infrastructure may be eligible for City front-ending in order to support the sustainable growth and development of undeveloped lands within St. Albert. Policy The City of St. Albert demonstrates transparent and responsible evaluation of growth infrastructure projects by integrating all business units in the prioritization process and ensuring responsible funding mechanisms. The City of St. Albert recognizes that in certain circumstances, new municipal infrastructure must be built to facilitate growth and that the City will need to initially front-end the required funds to construct this infrastructure in advance of receiving reimbursement in the form of off-site levy funding from benefiting land owners. Key elements of the off-site levy municipal infrastructure front-end prioritization process are to:

1. Provide a staged review process to all defined off-site leviable infrastructure considered for front-ending by the City;

2. Identify, assess and control risk; and 3. Create a financial plan, identifying funding sources for off-site leviable infrastructure

projects considered for front-ending. Definitions In this policy, “City” means the municipal corporation of the City of St. Albert. “City Engineer” means the professional engineer or individual so designated by the City Manager, or that individual’s appointed designate. "City Standards" means the standards and specifications as set out in the City of St. Albert Municipal Engineering Standards (presently in effect and as may be amended in future from time to time) for design, construction and installation of all Local Improvements as published by the City's Engineering Department from time to time, any additional standards, conditions or requirements imposed upon the development area by the City’s development authority.

C-P&E-09

City of St. Albert CITY COUNCIL POLICY

Off-Site Levy City Front-ending Prioritization Criteria

AUTHORITY City Council

APPROVED Res. No. mm dd

REVISED Res. No. mm dd


Page 1 of 4

ATTACHMENT 2

“Front-ending” means the process governing when a developer enters into an agreement with the City to construct “Qualified” Off-site infrastructure identified within the Off-Site Levy Bylaw. “Growth Infrastructure Prioritization Committee” means an administrative committee comprised of representation from Engineering, Planning, Finance, and Economic Development. “Off-site levy” means the amount calculated in accordance with the most recent Off-Site Levy Bylaw that is to be paid by the Developer to the City as the Developer’s contribution toward the costs of constructing municipal infrastructure projects defined and described within the Bylaw, which projects each fall into one of the following categories:

i) New or expanded facilities for the storage, transmission, supply or treatment of water to storage facilities;

ii) New or expanded facilities for the treatment, movement or disposal of sanitary sewage; iii) New or expanded facilities for the treatment and conveyance of storm sewer drainage; iv) New or expanded roads required for or impacted by a subdivision or development; and v) Land required for, or in connection with, any of the above described facilities.

“Qualified Off-site infrastructure” means municipal infrastructure that is identified in the most recent Off-site Levy Bylaw; Responsibilities 1. City Council is responsible to:

a. Use the identified principles to guide Council’s decision-making with respect to the funding of current and future off-site levy projects.

b. Approve the growth infrastructure prioritization criteria. c. Approve allocated budgets through the Budget process. d. Ensure appropriate resources are available to implement the off-site levy front-

ending principles.

2. City Manager or designate(s) is responsible to: a. Establish and periodically review the growth infrastructure prioritization criteria in

accordance with the Council Policy Framework. b. Monitor the outcomes of the off-site levy prioritization criteria. c. Ensure that accurate and reliable information is presented to Council for decision

making. d. Present the growth infrastructure prioritization to Council.

3. Growth Infrastructure Prioritization Committee is responsible to:

a. Provide awareness on the growth infrastructure prioritization practices across the organization.

b. Develop and update the Off-Site Levy City Front-ending Prioritization Criteria.


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ATTACHMENT 2

c. Apply the Off-Site Levy City Front-ending Prioritization Criteria to proposed off-site leviable infrastructure projects.

Standards The prioritization criteria considers a three stage process for front-ending off-site leviable infrastructure by the City of St. Albert. 1. Stage 1 Principles

A minimum of one of the following principles needs to be met to allow a project to be included into the Corporate 10 Year Capital Growth Plan:

a. The project is contained in Council priorities or within any approved Corporate Strategic Plan.

b. The project is approved through a resolution of Council. c. The project is required to continue to facilitate sustainable growth.

The confirmation that at least one component within Stage 1 is achieved provides the justification to begin Stage 2 of the process which is an examination of the project as it relates to the Corporate Standards.

2. Stage 2 Principles

The following Corporate Standards are required to be met, in order to mitigate unforeseen delays in project delivery:

a. Land, site servicing, and other essential project requirements have been confirmed or identified in the project charter;

b. The timing of the project aligns with related capital projects; and c. The project charter is detailed with a well-defined scope and includes necessary

justification.

The confirmation that each of the components within Stage 2 is achieved provides the justification to begin Stage 3 of the process which is the evaluation of the prioritization criteria.

3. Stage 3 Principles

Upon confirmation of Stages 1 and 2, the prioritization criteria will be applied as an additional assessment to which Administration will provide a numerical weight. The prioritization criteria will be based on the following:

a. Council Goals and Priorities i. The project supports a Council objective or is required to support

Council objectives or goals.


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ATTACHMENT 2

ii. The project is outlined within an approved Council strategic document.

b. Supports Growth i. A need is demonstrated by submission through Administration

complete with Council approval. ii. The project mitigates pressures on existing infrastructure servicing

current development.

c. Growth and Economic Development i. A need is demonstrated by submission through Administration

complete with Council approval. ii. The project mitigates pressures on existing infrastructure servicing

current development. iii. The project is intended to be a catalyst to stimulate growth or

elements in it will likely lead to diversified growth in the City. The project has elements that are intended to lead to non-residential growth or an influx of non-residential investment in the community.

iv. The project provides a Smart City focus, deepens the Botanical Arts Brand, by adding a modern operation, or brings an innovation to the community.

d. Environmental Protection

i. The project is adjacent to an environmentally sensitive or previously established development warranting direct City involvement during design and construction.

e. Financial

i. Partial funding is available through developer front-ending, ii. Funding is available, through Council resolution.

The Growth Infrastructure Prioritization Committee will establish a numerical points matrix as it relates to Stage 3 of the Off-Site Levy City Front-ending Prioritization Criteria. The evaluation assessment will be provided to Council when projects are being examined for approval of front-ending.


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ATTACHMENT 2

ATTACHMENT 3

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