Offsite Levy Rate Models and Policies

What is an offsite Levy?

An offsite levy is one of several financing sources (grounded in legislation and regulations) that municipalities use pay for infrastructure costs associated with growth. Offsite levy charges are used to transparently and equitably allocate offsite infrastructure capital costs to those that benefit (i.e., this ensures growth pays for growth). As outlined in Alberta legislation, eligible offsite infrastructure includes new or expanded roads, water, sanitary, storm water infrastructure, and associated lands for each.

Funds are collected from developers at time of subdivision or development approval, and held in trust to construct specified offsite infrastructure.

Municipalities prefer offsite levies to other forms of infrastructure cost allocation (e.g., development agreements) because they are easier to administer, they create a level playing field amongst developers (i.e., consistent, transparent, equitable outcome), and they provide elected officials and administrators with a detailed understanding of the cost of growth.

Offsite Levy Model

The CORVUS Offsite Levy Model does much more than calculate offsite levy rates; and we provide it to our clients for ongoing use without any licensing fees or maintenance obligations. The model:

  • Tracks growth areas (development basins) where offsite levies would apply, and differential development related to land use, including land areas not suitable for development (net development area).
  • Tracks lands that have been developed and where offsite levies have been paid. Develops a staging plan for offsite levy collections.
  • Enables “what if” impacts if development staging changes (i.e., accelerated / decelerated growth).
  • Tracks actual cost of construction on a project-by-project basis.
  • Tracks front end financing on a project-by-project basis.
  • Tracks provincial grants on a project-by-project basis.
  • Determines development agreement costs assignments on a project-by-project basis.
  • Assigns project costs on a project-by-project basis to benefiting parties.
  • Determines total project costs assigned to the municipality, growth, or third parties.
  • Assigns offsite levy cost allocations to individual land areas within the development basin.
  • Determines interest earnings and interest claim impacts on offsite levy reserves.
  • Shows front-ending requirements, and level of front-ending indebtedness over development period.
  • Enables “what if” scenarios for changes in construction escalation, interest rate changes etc.
  • Reconciles offsite levy reserve balances with receipts, expenditures, front-ending claims, interest impacts etc.
  • Summarizes offsite levy rates for each development area.
  • Contains a debenture calculator for long term debt on front-ending.
  • Contains a transfer mechanism related to commuting long term debt should offsite levy reserves be sufficient to commute front-ending debts.
  • Generates reports needed to facilitate annual updates (e.g., area changes, cost changes, interest changes, offsite collections, municipal front-ending etc.).
CORVUS Offsite Levy Model Control Panel

CORVUS Offsite Levy Model Control Panel (click to enlarge)

Offsite Levy Policy and Procedure Frameworks

We assist municipalities with implementation of offsite levy bylaws by developing offsite levy policy and procedure frameworks. These frameworks outline key decision criteria, policy choices, and work procedures pertaining to:

  • Assessment and collection processes.
  • Legislated exemptions.
  • Municipal exemptions and thresholds.
  • Levy assessment deferment and installment processes.
  • Eligibility policies for payment deferment.
  • Repayment period and terms.
  • Repayment indemnifications.
  • Increasing amounts due for any increase in offsite levy rates.
  • Offsite levy infrastructure front-ending processes.
  • Construction of qualified and non-qualified offsite infrastructure and their impact on repayment.
  • Infrastructure front-ending claim reimbursement processes.
  • Construction inspection and acceptance.
  • Interest on unpaid front-ending balances.
  • Guaranteed repayments and repayment priorities.
  • Etc.