WHEREAS one of the major pillars of inquiry and investigation, and resultant recommendations for enactment of broadened enabling legislative authority for Municipalities, advanced by “The Minister’s Council on Municipal Sustainability” (“Council”) Report (March 2007) focused on the expansion of sustainable municipal revenue sources -including greater access to “own-source” revenue options;
and WHEREAS the Council’s exploration and evaluation of ‘optional revenue solutions’ acknowledges the critical financial impacts stemming from the “build-up” of Alberta’s municipal infrastructure deficits, the compounding impacts resulting from rapid growth pressures, and the clear need to provide municipalities with access to “significant additional revenues to meet the challenge of providing the infrastructure and servicing required”;
and WHEREAS creation of improved relationships between the Province and Alberta’s municipalities -including those related to enhancement of individual municipal jurisdictional access to revenue sources of a sustainable, predictable, meaningful, and cost effective nature -are based on a clear articulation of guiding principles including those of fairness, autonomy, accountability, equitability, flexibility, sustainability, transparency, and timeliness; and WHEREAS the two ‘additional own-source revenues’ that the Minister’s Council recommended that “The Government of Alberta should enact enabling legislation to authorize municipalities, at their discretion, to levy and collect” that appear to best represent both the desirable nature of expanded revenue sources, and align most closely with the spirit and intent of the guiding principles are:
1) Expanded Scope for Development Levies in Support of Directly Related Local Services, and
2) Limited Split Mill Rates within the Non-Residential Property Class
WHEREAS notwithstanding the decision of the Government of Alberta to reserve decision on this recommendation pending further consultation on the merits of providing taxation authority to regional service delivery agencies, we believe it is now time for the Government to act;
THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Province of Alberta to advocate Legislative Enactment of Expanded Municipal Authority to access revenues as per the following:THAT enabling legislation be passed to enact authority for Alberta Municipalities to levy an expanded scope of development levies in support of directly related local services and to assess limited split mill rates within the non-residential property class at the next sitting of the Provincial Legislative Assembly in the best interests of municipalities, the Province and taxpayers of Alberta.
The Councils’ Report findings are current, and its recommendations are unambiguous in describing the critical need to “strengthen municipal capacity to address ongoing operational sustainability” through expanded revenue sourcing. Granting of greater municipal discretionary authority to charge development levies beyond the present scope of the “off-site levy” provisions of Section 648 of the Municipal Government Act (MGA), restricted essentially to roads, water, wastewater, and storm water “hard infrastructure” requirements related to new developments and subdivision, would be an ideal first step towards expansion of local revenues directly responsive to variable rates of growth and development. It would also reaffirm the Council’s sense of urgency for immediate actions.Legal agreements such as that between the City of Calgary and the Urban Development Institute-Calgary authorize the assessment, or charging, of a very expansive scope of “off-site” levies -well beyond the present provisions of the Municipal Government Act (MGA). “Development Levies in support of Directly Related Local Services” provided for under this agreement also requires front-end payments respecting “off-site levies” for “soft infrastructure” services such as Fire, Police, Parks, Recreation, and Library. This form of agreement, while representing a mutual agreement and formal acknowledgement by both parties that development activity directly creates the need for expansion of a broad range of service requirements that have an identifiable cost impact, would not be needed following enactment of appropriate legislative authority for municipalities to levy for an expanded scope of “off-site” service requirements. All municipalities, large or small, need to have greater access to a level playing field in respect to their levy authority, associated autonomy, and financial accountability. An expansion of authority to levy an expanded scope of “development levies” would allow for a direct allocations and assignment of primary ‘impact costs’ to their source. It is difficult to effectively argue that the ‘general taxpayer’ should continue to shoulder an inordinate, growing and significant tax burden for increasing operating and/or capital costs directly related to growth. This becomes particularly difficult when a limited of number of municipal jurisdictions have been successful in concluding agreements with the development industry that does assign a broad range of service costs directly to them. The Council’s recommendation for the introduction of legislation that would authorize municipalities to assess “Limited Split Mill Rates within the Non-Residential Property Class” is also to be commended. This would allow local jurisdictions the ability to respond flexibly to their local circumstances and needs. It would also grant recognition that some forms of business enterprises have a greater draw or impact on infrastructure such as roads. Thus their tax rates could be ‘adjusted’ to more effectively reflect their cost impact attributes. Small business development and expansion could be encouraged through the availability of split mill rate authority that would allow a potential reduction in their rates. Economic cycles could be taken into consideration for particular industries. Municipalities could gain the ability to attract or encourage growth of particular form of business ventures such as “Green Industries”. As the Council’s report stated, a ‘one size fits all’ format is seldom the best form of policy provision. This is no more obvious than in the area of ‘non-residential property class’ mill rates. Municipalities must enjoy a similar range of flexibility that is now provided for in the ‘residential property class’. A ‘limit’ in the range of variability for “split mill rates,” within the Non-Residential Property Class, in the order of 25% would give municipalities a reasonable scope of discretionary use and ensure accountability.
An upcoming review of assessment legislation within the municipal government act could also have implications for increased taxation powers. The AAMDC has recently developed recommended changes to be brought forward for the Minister’s consideration. Limited split mill rates and how they should be enacted are a part of the discussion brought forward within this study.