TAMRMS#: B06
8.6
REQUEST FOR DECISION
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Principles of Off-Site-Levy Front-Ending Policy
Presented by: Abram Iskander, Off-Site Levy Specialist, Engineering Services
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RECOMMENDED MOTION(S)
recommendation
That the following proposed principles for the City’s Off-site Levy (OSL) Front-ending policy to guide consultation with the development community and policy development be endorsed:
1. The City prioritize front-ending OSL infrastructure in areas that align with the MDP.
2. Apply City front-ending funding limits for OSL infrastructure to reflect the debt servicing ability of the OSL Recovery Fund.
3. Provide a delineation between the types and/or scale of infrastructure the City will consider for front-ending and what the development community is expected to front-end.
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SUMMARY
Initial research has been done into front-ending principles and policies used in municipalities across Alberta (see ATT 1 Front-End Policy Report). Based off that research and aligning practices with St. Albert’s situation, Administration is seeking endorsement of the proposed principles for the City’s front-ending policy.
With guidance and endorsement from Committee members, Administration will further explore the front-ending policy principles and consult with Developers before drafting the policy by Q2 2026.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On December 3, 2024 Council passed the motion (CM-24-018) that by Q2 2026, Administration:
• draft or amend a Council Policy for Council’s approval related to the City’s position on front-ending the costs of development;
• outline the circumstances under which the City will consider front-ending costs of development;
• explore solutions to enable and encourage developers to front-end costs of development, including by researching what is done in other municipalities in Alberta.
BACKGROUND AND DISCUSSION
Historically, the City has been a major front-ending party to finance off-site levy projects that support growth and development, including projects with no municipal benefitting share. The City has typically front-ended leviable growth projects because the City has better financing capacity and borrowing rates than most developers.
Two primary issues are noted when the City is the main front-ending party:
1. Front-ending offsite infrastructure directly impacts the City’s ability to fund other capital projects (e.g., community amenities, police buildings, transit, etc.,).
2. The market dictates the pace of development. If development slows or stops there is a risk to the City that levies collected and used to service annual debt payments may not be available. In this instance the City would need to find alternate funding to cover the shortfall.
The goal of this policy is to provide a framework to guide decision-making on how the City invests in off-site levy infrastructure, finding the balance between supporting development and responsibly managing the City’s finances.
There are three key questions that require Committee direction to set the initial position before further in-depth discussions with stakeholders can occur:
1. Where should the City invest in off-site leviable infrastructure?
Considerations:
• Leviable infrastructure into new growth areas are sized for 25 to 50+ years of development. Once that infrastructure is constructed it is beneficial to have those development areas built out as fast as possible to utilize that infrastructure. Those new taxpayers help support the cost of operating, maintaining, and future capital expenditures of this new infrastructure.
• The City’s recent pace of development is consistent with the long-term rate. Spreading this growth among multiple development areas leads to longer timeframes for infrastructure utilization within each area.
• The City has limited funds available and prioritizing OSL infrastructure that supports the goals of the MDP helps advance the City’s strategic objectives.
• Infrastructure the City prioritizes may not always align with what the development community prioritizes.
• Focusing City investment on select growth areas may unintentionally influence development, creating advantages for certain areas over others.
• Investing into infrastructure for multiple growth areas of development supports a competitive market and offers more options for development. However, this would lead to increased financial requirements.
Proposed Principle:
The City will prioritize front-ending OSL infrastructure in areas that align with the Municipal Development Plan.
• Aligning with the MDP would allow organized staging of infrastructure which would improve infrastructure utilization, return on investment, and maintain levy cash flows.
• Developers would still be able to develop in other areas of the City, however there would be more responsibility on those developers to front-end the cost of OSL infrastructure necessary to support their developments. Alternatively, the Developers can present proposals for City investment through promoting their unique merits and financing solutions, which would be reviewed on a case-by-case basis.
2. How much will the City invest towards off-site leviable infrastructure?
Considerations:
• Infrastructure costs have increased in recent years, constraining the number of projects the City can fund within its debt limit while maintaining current service levels and other municipal capital requirements.
• While City financing supports a competitive development market, there are risks of oversizing and overbuilding infrastructure beyond the pace of development.
• Limiting City investment may mitigate overinvestment risks but will have impacts on the pace of development, especially if required infrastructure is cost prohibitive for developers.
• Increased funding towards OSL infrastructure will support development and signal it as a City priority. However, if development slows and levy revenues fall short, the City may face increased debt servicing risks due to insufficient coverage of payment obligations.
Proposed Principle:
Apply funding limits for OSL infrastructure to reflect the debt servicing ability of the OSL Recovery Fund.
• City investments in projects should align with the debt servicing capacity of the OSL Recovery Fund. This aligns project funding with the fiscal reality of the City and mitigates risk and impacts of reduced levy revenues during slow periods of development.
• For large scale projects, the OSL Recovery Fund may require a mix of City and Developer financing to stay compliant with existing policy and can guide front-ending requirements.
3. What type of off-site leviable infrastructure will the City invest in?
Considerations:
• City front-ending allows for smaller developers with limited financial capacity to still participate in the development market through paying off-site levies.
• City front-ending allows more City discretion on the timing and project design.
• Developer front-ending enables more phased construction in alignment with the pace of area development.
• Developers have mentioned that they have access to competitive construction pricing which can contribute to overall cost reductions of OSL projects compared to City led construction.
Proposed Principle:
Provide a delineation between the types and/or scale of infrastructure the City will consider for front-ending and what the development community is expected to front-end.
• Front-ending for standard off-site growth projects can be led by Developers allowing the City to focus its resources towards larger cost or complex projects (e.g., water reservoirs).
• Projects can still be planned and preliminary designed by the City, with Developers advancing final design and constructing the infrastructure.
• Additional mechanisms to support developer front-ending would likely be needed to support competitive and cost-effective development.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
On July 24, 2025, the Off-Site Levy Working Group held its first meeting of the year. Administration informed Developers that the front-ending policy was a working item for this year. Developers provided the following initial thoughts on front-ending:
• Avoid policies that “shutdown” areas of development or create situations with “winners and losers”. Investments should match where development is occurring.
• Apply a phased approach to infrastructure construction to reduce financing requirements and allow for more developer front-ending.
• Developer front-ending can allow for phased construction as development requires, allowing the City to focus its resources on larger budget projects.
• Request to research mechanisms to support developer front-ending (e.g. offsetting levies for multiple stages of development)
Following the Standing Committee of the Whole’s guidance on principles, Administration will consult with the Off-Site Levy Working Group and present the proposed principles for discussion and feedback.
IMPACTS OF RECOMMENDATION(S)
Financial:
The recommended principles are intended to provide guidance on how OSL infrastructure projects are decided and funded. Further stakeholder consultation and final Policy review and approval is still required.
Compliance & Legal:
None at this time.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
None at this time.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan:
Long-Term Debt Strategy
Green Tape 2.0
Development of Long-Range Community Strategies
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
D. Land Use and Development
D.2 Infrastructure Planning
D.2.1 Off-Site Levy Program
Support growth and development by administering City's off-site levy program for essential infrastructure needed.
IMPACTS OF ALTERNATIVES CONSIDERED
ALTERNATIVE 1: That Standing Committee of the Whole does not endorse the principles for front-ending and Administration begin consultation with the Development Community.
Financial:
None at this time.
Compliance & Legal:
None at this time.
Program or Service:
None at this time.
Organizational:
The proposed principles are meant to provide Administration guidance and a starting point for further research and consultation with Developers. Without the endorsement, there may be a need to meet with Standing Committee of the Whole again before drafting the policy to ensure consultations and further research aligns with Council’s expectations.
Administration can still begin consultations with Developers and further research to progress with the front-ending policy.
Risks
None at this time.
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Report Date: September 9, 2025
Author(s): Abram Iskander
Department: Engineering Services
Department Director: Dawny George
Managing Director: Adryan Slaght
Chief Administrative Officer: Bill Fletcher