TAMRMS#: B06
8.2
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Bylaw 12/2024 - Business Improvement Area Tax and Tax Rate Bylaw (1st, 2nd & 3rd Readings)
Presented by: Stephen Bannerman, City Assessor, Financial and Strategic Services
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RECOMMENDED MOTION(S)
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1. That Bylaw 12/2024 be read a first time.
2. That Bylaw 12/2024 be read a second time.
3. That unanimous consent be given for consideration of third reading of Bylaw 12/2024.
4. That Bylaw 12/2024 be read a third time.
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PURPOSE OF REPORT
To establish a Business Improvement Area (BIA) Tax Bylaw for a designated district of downtown St. Albert in the 2024 taxation year. To provide further details on the impact to business within the BIA. Provide tax payment information and deadlines.
To establish a Business Improvement Area (BIA)Tax Rate Bylaw for a designated district of downtown St. Albert in the 2024 taxation year. Setting the municipal business tax rates resulting from the 2024 approved downtown BIA budget established by the board of directors and approved by City Council on March 05, 2024.
BACKGROUND AND DISCUSSION
The 2022-2025 Council Strategic Plan outlines five key areas of focus and associated Strategic Priorities. Strategic Priority #2:
“They will foster a vibrant downtown, where people come to live, gather, celebrate, shop and do business. By supporting a variety of community events that help promote our heritage, arts and culture, Council will support downtown businesses and encourage the establishment of a Business Improvement Area.”
What is a BIA?
A Business Improvement Area (BIA) is a specific geographic area of the city in which businesses combine resources and work together, through a formal association, to enhance the economic development of their area.
In the St. Albert context, the establishment of a Downtown Business Improvement Area has involved several steps:
• On March 23, 2022, downtown businesses, commercial property owners, the Chamber of Commerce met with Mayor Heron and members of City Administration at the St. Albert Community Hall.
• On November 28, 2022, business owners, with the assistance of City Administration, organized a meeting for downtown businesses to discuss opportunities and challenges for the area and the possible establishment of a BIA.
• On January 15, 2023, formation of the Downtown Business Association Steering Committee (the Steering Committee). Informed the City of their intent to seek signatures of support and submit a request to establish a BIA later in the year.
• On May 18, 2023, the Steering Committee submitted a request to the City to establish a BIA in downtown St. Albert. The request was accompanied by the requisite number of signatures, in this case 35 signatures or 29% of businesses. As legislatively required, the request also included the proposed BIA boundary, which is generally in the vicinity of Perron Street, St. Thomas Street, St. Michael Street, and St. Joseph Street.
• On June 7, 2023, a letter was hand delivered and emailed to all businesses within the proposed BIA boundary to inform them of the Steering Committee’s intent to establish a BIA for downtown St. Albert. Under the Business Improvement Area Regulation, businesses opposed to establishing a new BIA had the ability to submit a petition opposing the establishment of the BIA. If City Council received a petition against the BIA signed by persons representing more than 50% of the notified business owners within a 60-day period of the delivery of the letter, a BIA could not be established for a minimum of two years.
• On August 8, 2023, the 60-day petition period closed. No petition against the establishment of the BIA was received.
• On September 19, 2023, City Council unanimously approved Bylaw 21/2023 a Bylaw to create a Downtown Business Improvement Area.
• BIA Budget Created - The BIA Steering Committee prepares an annual budget for the BIA which includes operational costs such as staff, services, and programs for members. (January 2024)
• On March 5, 2024, the BIA Budget is approved by Council.
• (Anticipated) April 16, 2024, approval of Tax and Tax Rate Bylaw by Council.
Preparations for the Combined Tax and Tax Rate Bylaw:
Creating a business tax through the BIA Regulation requires the assessment of businesses within the BIA boundary and creation of the 2024 Business Improvement Area Tax Roll. This has been completed by the Assessment department. The department has produced an assessed value for each space a business occupies within the BIA based on square footage and the typical rent for a space (net annual rent value). The assessment is used for taxation purposes only and does not reflect the profitability of a business.
Business ownership data has been gathered from Business Licensing.
All businesses within the BIA boundary are assessable and will receive an assessment notice. A sample calculation is provided:
• Area(ft²) x Tax Rate = Business Assessment
Business owners within the BIA boundary will be mailed combined assessment and tax notices on May 29th. Tax notices will have a similar look and feel to property tax notices; however, they differ significantly as these notices will be mailed to the business owner, not the property owner.
Under the authority of section 20(6) of the BIA Regulation, the minimum and maximum amount payable on a business roll located in the BIA boundary will be $200.00.
BIA Assessment and Tax Notices are also subject to a 60-day review period where assessors are available to answer questions about the BIA and the details of the assessed value. Similar to property tax, BIA tax will be due on June 30, 2024.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
Downtown Stakeholder Communications and Engagement
Over the past two years, the Economic Development Department has worked with BIA directors and potential ratepayers within the BIA boundary.
Assessment and Taxation staff are available for questions regarding the details of BIA assessments and tax account inquiries.
Inter-Municipal Consultation
In preparing for the potential establishment of a BIA, Administration consulted with municipal peers in the areas of Economic Development and Assessment & Taxation, as well as established downtown business associations.
Best practices from similar municipalities and downtown business associations have been incorporated into St. Albert’s approach and process. One best practice is the use of a minimum and maximum tax amount for all members of St. Albert’s BIA. In addition to being encouraged by the Steering Committee, a minimum and maximum tax amount is expected to provide some efficiency for the City’s Assessment & Taxation Services branch in administering the BIA Tax. The minimum tax amount being proposed by the BIA Directors is approximately $200 per business and the maximum tax amount being proposed is $200 per business.
Other municipalities have also shared insights and estimates on the time and costs associated with administering a BIA tax and supporting the ongoing efforts of an established BIA and downtown business association.
IMPACTS OF RECOMMENDATION(S)
Financial:
If the Downtown Business Improvement Area Tax Rate and Tax Rate Bylaw (Bylaw 12/2024) is passed, both a BIA Tax Bylaw and a BIA Tax Rate Bylaw will need to be passed by Council annually in order for the City to collect tax on behalf of the BIA and transfer the collected tax to the BIA.
Additional scenarios that may present financial risks and considerations include:
- Vacant, exempt, or properties owned by the municipality do not contribute tax to the BIA.
- When a business within the BIA closes or leaves with an outstanding balance owing to the BIA, the municipality and BIA budget may have a shortfall.
- The BIA may be eligible for grant funding from other organizations or other levels of government that could benefit downtown St. Albert.
Compliance & Legal:
A BIA is created under the authority of the MGA Business Improvement Area Regulation (AR 93/2016). To meet the legislative requirements, the following must be completed for a BIA to be established and for BIA taxes to be collected by the municipality and transferred to a BIA:
- BIA Establishing Bylaw passed by Council (September 2023)
- BIA Board and Budget approval by Council (March 2024)
- BIA Tax Bylaw passed by Council (required annually if part of the BIA Tax Rate Bylaw)
- BIA Tax Rate Bylaw passed by Council (required annually)
- BIA tax assessment notices issued (required annually).
The BIA Regulation provides that a municipality must pass a BIA Tax Bylaw if there is a BIA within the municipality.
In order for the BIA Tax Bylaw to be applicable in 2024, it must be passed before May 1 of this year. First, second, and third readings of Bylaw 12/2024 are scheduled for the same day (April 16, 2024). The MGA provides that a proposed bylaw must not have more than two readings at a Council meeting unless the Council members present unanimously agree to consider third reading at the same meeting.
If unanimous consent for third reading of Bylaw 12/2024 is not granted on April 16, 2024, a special council meeting will have to be scheduled prior to May 1 in order to receive third reading of Bylaw 12/2024.
Program or Service:
Services associated with municipal Assessment & Taxation will be impacted, as the introduction of a BIA tax, which differs from conventional property assessment will increase the volume of inquiries to both Assessment and Tax. There will also be additional mailing costs and software costs in creating a modified tax notice.
Organizational:
It is anticipated that the passing of the 2025 BIA Tax and Tax Rate Bylaw will occur in January/February of 2025. The BIA budget is expected to be presented to Council in October/November of 2024, prior to the 2025 Municipal Budget being finalized.
Risks
Legislation requires that BIA Tax Bylaw must be passed by May 1st annually.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
- Council Priority Two: Vibrant Downtown
- Initiatives: Downtown Stakeholder Coordination
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
- Property Assessments
- Tax Account Management
- Business Retention and Expansion
- Stakeholder Relations
- Economic Strategy, Planning and Policies
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
As outlined in the St. Albert Council Strategic Plan (2022-2025):
Facilitate and support the downtown business community to leverage collaborative opportunities and promote businesses that help create a vibrant downtown. This strategy includes supporting the creation of a Business Improvement Area.
IMPACTS OF ALTERNATIVES CONSIDERED
If Council does not wish to support the motion, the following alternatives could be considered:
Alternative 1
Council could direct administration to make changes to Bylaw 12/2024 prior to its approval.
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Report Date: April 16, 2024
Author(s): Stephen Bannerman, Senior Manager/City Assessor
Department: Financial and Strategic Services
Department Director: Anne Victoor
Senior Director: Diane McMordie
Chief Administrative Officer: Bill Fletcher