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Lacombe sets new development levy rates

Final rates significantly reduced from those first proposed after developer feedback
City of Lacombe has passed new development levy increases, significantly lower than first proposed after getting public feedback.(Advocate file photo)

Lacombe city council has set new rates developers pay to help cover the cost of necessary infrastructure.

The approved levies are significantly lower than first proposed last year, reflecting feedback from developers, property owners and the business community. When the city reached out to them last fall they heard concerns proposed rates were too high and kicked in too soon.

Some tweaks were made to the list of projects to be covered by levies and estimated future project costs were revised downward in many cases as more precise cost forecasts were completed.

Under the new levy bylaw unanimously passed on Monday by city council, the city will pick up 55 per cent of cost for water infrastructure, arterial roads and public facilities leaving developers to pay 45 per cent.

“Overall, these changes resulted in a significant reduction in the initially proposed offsite levy rates,” said engineering services manager Amber Mitchell, adding the numbers were “based on sound engineering principles and are fair and balanced.”

The average levy increase of 7.3 per cent to $84,600 is significantly lower than the 46 per cent hike to $115,100 originally proposed. The previous average levy rate set in 2013 was about $78,900.

“Another major impact of these changes is that they result in more equitable rates across the city,” said Mitchell.

Where previously the maximum rate was 6.4 times higher than the lowest rate, that differential has now been changed to 1.7 times.

Among 10 comparison communities, Lacombe will have the third lowest levy rates. Only Stony Plain and Olds are lower. Olds’s rates are $9,800 to $13,300 and Stony Plain is at $79,500. The highest levies are paid in Cochrane, where developers are charged an average of $250,000 per hectare.

Mayor Grant Creasey said, “I do think this is a fair adjustment, certainly to the original proposal.”

While no one wants to pay more, the rates still leave Lacombe as one of the province’s most attractive places to develop, he added.

To further reduce the financial pressure on developers, the new rates will not kick in until Jan. 1, 2024. Rates will be phased in over three years, with developers paying 35 per cent of the increase in the first year, 70 per cent in the second and 100 per cent in third and future years.

To ensure, developers are not hit hard by a sharp increase in inflation, rates will be increased each year to smooth out any development cost hikes.

Developers will also have the option of deferring levy payments until construction is completed.

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