A court ruling involving a developer and the Town of Okotoks has chilled St. Albert's approach on revamping how it collects money for the city's recreational and cultural amenities.
Instead of moving forward with a revised policy on capital recreation levies, councillors sitting as the standing committee on finance postponed until September any further action on how it will approach building neighbourhood and city amenities.
The committee is also hesitant to move forward, which would involve asking the Urban Developers Institute to review the proposed revisions, because of a lawsuit it faces from Landrex. The developer filed suit in August, seeking a refund of offsite levies paid for stages one and two of Erin Ridge North, claiming it will receive no benefit from new infrastructure in the annexed lands because the subdivision is being serviced from Oakmont and Erin Ridge North. It also wants the court to prevent the city from collecting $7.7 million in levies from stage three of the development. None of the allegations have been proven in court.
What recreation services director Monique St. Louis and her department are proposing is a new approach to a process originally conceived in 1981 to fund construction of baseball diamonds, outdoor rinks and playgrounds. Developers paid a capital recreation levy that the city banked in reserves specific to the neighbourhood for which they were paid.
A review of the policy has found the funds accrued to date would be insufficient to build all proposed amenities. Of eight neighbourhoods listed, construction costs for neighbourhood facilities are projected at $19.5 million. Total neighbourhood reserves amount to only $7.8 million.
"There was an indication we needed to review this along with the recreation master plan to look at what should be developed in the community," said acting city manager Chris Jardine.
Yet there is no consistent approach across municipalities. At present, developers pay a "per-door" rate of $1,700. Calgary charges almost $80,000 per hectare while Edmonton charges developers nothing. The proposed revision to the policy would have moved St. Albert to a per-hectare payment with specific growth triggers that would require construction of a certain facility in a neighbourhood.
No takers
But no one on the committee was willing to even have UDI look at the policy, both with the Landrex lawsuit pending and a recent court ruling out of Okotoks. In that case, the Alberta Court of Appeal said the town could not charge a levy for a bridge project or as part of a voluntary contribution agreement. Under the Municipal Government Act, municipalities are allowed to charge offsite levies for roads and sewer, as well as land required for infrastructure.
"There are legal implications," said Coun. Wes Brodhead. "Given the court ruling, on capital recreation in general, I'm sort of, without seeing the motion, not going to support it pending the outcome."
"It's a Pandora's Box," Coun. Cathy Heron added.
Administration, however, wasn't so quick to concede the point.
"My understanding is this program is in place and would work within its parameters until we're told to stop," said St. Louis. "Okotoks will live with the ruling the court delivered, but as far as I understand it, it doesn't affect how we do business at this time. Having said that, it's pretty volatile, no question."
While the effects of the ruling for other municipalities aren't yet known, council wasn't willing to entertain a situation in which it might find itself in violation of common law.
Money trouble
The city might also face a problem with its neighbourhood reserves as several carry balances that cannot be spent. Older neighbourhoods, such as Braeside, have reached full build out and have no room for additional amenities, but the city has no policy in place on what to do with the money.
"You want to clean up your finances before you go start a UDI discussion because if you're a Braeside developer from 1982, I'd say you owe me some money," said Mayor Nolan Crouse.
The city's only policy states it cannot transfer balances from one neighbourhood reserve to another. Otherwise there is no guidance on what the city can do with the money.
"Our financial staff should bring forward a policy or procedure to clean up the history," Crouse said.
The committee passed a subsequent motion for a policy amendment that will deal with historical neighbourhood reserves.
