TAMRMS#: B06
9.1
REQUEST FOR DECISION
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Bylaw 8/2026-Off-Site Levy Bylaw Amendment 15 and Annual Report
Presented by: Abram Iskander, OSL Specialist, Engineering
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RECOMMENDED MOTION(S)
recommendation
1. That Bylaw 8/2026, being Amendment 15 to Off-Site Levy Bylaw 30/2013, be read a first time.
2. That Bylaw 8/2026 be read a second time.
3. That unanimous consent be given for consideration of third and final reading of Bylaw 8/2026.
4. That Bylaw 8/2026 be read a third time.
5. That $8.57M in the off-site levy reserves held by the City be allocated and administered as indicated in “2025 OSL Annual Recoveries”, provided as an attachment to the March 17, 2026 agenda report entitled “Bylaw 8/2026 - Off-Site Levy Bylaw Amendment 15 and Annual Report”.
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SUMMARY
The report summarizes the off-site levy rates updated for the 2026 construction season, and subsequent bylaw amendment to reflect changes in rates and project lists. The report also highlights key changes to the City’s Off-Site Levy Model and how the off-site levies are calculated.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
In accordance with sections 17 to 22 of Off-Site Levy Bylaw 30/2013, the City shall review the Off-Site Levy projects and the Off-Site Levy rates no less than every third year. After the review has been completed, City Council may amend the Bylaw to update the Municipal Infrastructure Off-Site Levy rates. On or before December 31 of each calendar year, the CAO shall prepare and submit to City Council an annual report on the Off-Site Levies imposed and collected by the City in the previous year.
On March 18, 2025, Council passed the following motions:
BL-25-010
1. That Bylaw 4/2025, being Amendment 14 to Off-Site Levy Bylaw 30/2013, be read a first time.
2. That Bylaw 4/2025 be read a second time.
3. That unanimous consent be given for consideration of third and final reading of Bylaw 4/2025.
4. That Bylaw 4/2025 be read a third time.
5. That $10.25M in the current off-site levy receipts held by the City be allocated and administered as indicated in “2024 OSL Annual Recoveries”, provided as an attachment to the March 18, 2025 agenda report entitled “Bylaw 4/2025 - Off-Site Levy Bylaw Amendment 14 and Annual Report”.
6. That the Chief Administrative Officer continue the program to allow owners as defined under the Off-Site Levy Bylaw up to 30 days after a Development Agreement is executed or a Development Permit is issued to pay any required off-site levies in full and in accordance with any other requirements under OSL Bylaw 30/2013.
7. That Administration add the 30-Day Off-Site Levy Payment Deferral fee of $500.00 as an Engineering Fee in Schedule “U” of Master Rates Bylaw 1/82 with the 2026 Master Rates Bylaw update.
BACKGROUND AND DISCUSSION
Off-Site Levy (OSL) Bylaw 30/2013, in accordance and compliance with the Municipal Government Act and the Off-Site Levies Regulation, collects off-site levies for water, roadway, sanitary, and storm sewer infrastructure. The Municipal Government Act also allows levy collection for recreation facilities, fire hall facilities, police station facilities, and libraries; however, these categories are not included within Bylaw 30/2013.
Infrastructure projects referenced within the OSL Bylaw have a wider benefitting area beyond the on-site local improvements of a particular development. The City or a developer will "front-end" the total cost of an OSL project, and subsequent benefitting developers pay their calculated share of those costs as OSL. The City initially collects the levies paid by development which is then reimbursed to front-ending parties annually.
The OSL projects and corresponding benefitting parties specified within the OSL Bylaw must be reviewed and amended by Council no less than every three years, or sooner if required or desired. This is to ensure that the OSL Bylaw remains up-to-date and in alignment with the master plans and policies that guide it.
A) The first step in updating the rates is for Council to approve any changes to the OSL project list referenced in the Bylaw, estimated construction costs, and allocation of costs to benefitting parties.
B) The second step is for Council to approve allocating the funds in the OSL reserves to front-ending parties waiting to be reimbursed for past construction of OSL projects.
Off-Site Levy Development Lands
The City’s remaining developable lands are divided into 83 OSL reference areas. The developable land is divided to accommodate the different servicing basin boundaries as each reference area may benefit from a different set of OSL projects.
The OSL Bylaw considers lands that will develop over a long-term development timeframe. The 2026 update includes the anticipated development over the next 25-year planning timeframe (2026-2050).
Development forecasts are guided by the following inputs:
• Existing planning and long-term growth studies (e.g., subdivisions, area structure plans, infrastructure master plans, capital budgets, etc.,)
• Input from active developers on their staging and development plans; and
• Historical long-term average development and land absorption rates in the City.
In 2021 when the City was undergoing annexation, the City committed to the development community that it would hold the lands from the prior City boundary in the new 25-year development timeframe as previous rate calculations had included those lands. This explains why some of the lands shown in the 25-year development timeframe may not align precisely with other City planning documents.
The estimated timeframe for the 2022 annexed lands to be developed was initially derived from the off-site levy review component of the annexation analysis completed in 2021. A re-evaluation of these development assumptions is underway as the City updates its utility and transportation master plans. It is anticipated that growth projections will be further refined over time as land use planning progresses and becomes more detailed within those annexed areas.
The growth assumptions for the 2026 update reflect the following information:
• Active developers in the City providing target growth rates for their developments;
• Lands developed through development agreements executed in 2025;
• Adjustments made to gross area and environmental reserves from the 2025 Northeast Area Structure Plan;
• Lands required for arterial roads and stormwater ponds to reflect actual development and land acquisitions; and
• A ~9% reduction of anticipated development within 25-years from previous estimates. This more closely reflects the historical long-term development rate in the City.
Levies are calculated and charged on net developable area remaining in the City boundary, regardless of land use. For example, both residential and non-residential within an OSL area will pay the same rate. The net development area does not include lands dedicated for:
• Environmental reserves;
• Arterial road right of way;
• Municipal reserves; or
• Stormwater management facilities.
The remaining net development area for the start of 2026 is 1,804 hectares. Of that area, 1,034 hectares are predicted to develop within the next 25 years.
Staging Adjustments
The OSL model contains a staging adjustment to account for the timing of both project construction and land development. The adjustment recognizes the financial effects of:
• inflation;
• interest earned or charged on OSL reserve balances;
• the scheduled timing of infrastructure construction and expenditures; and
• when development is expected to occur and levies are collected.
Without staging, the resulting rates assume all projects and development are occurring immediately, so levy payments are collected upfront. Since development and projects are phased over many years, the levy rates are adjusted to reflect the pace of growth.
It is assumed that lands expected to develop outside 25-years receive minimal benefit from infrastructure constructed today compared to development that occurs today. For example, some annexation lands may not develop until infrastructure is 25-years old. Therefore, current development would pay a higher share of the project costs until those lands begin to enter the 25-year development timeframe.
Staging adjusts OSL rates by considering the following:
1) Infrastructure Reserve Accounts
The infrastructure reserve in the OSL model represents the levy account balance at a point in time. In most instances, off-site levy reserves will not be sufficient to fund project construction. During these times, front-ending will be required. When the reserve balance is in a positive position, it earns interest based on the City's short-term average rate of return. When the reserve balance is negative (i.e., during times when front-ending is required), the reserve is charged interest based on the Loans to Local Authorities' 20-year debenture rate.
Each of the OSL infrastructure categories is recalculated annually to determine how much the levy rates have to be adjusted in the current year so that at the end of the 25-year development timeline the reserve balances are at zero.
2) Project Timing and Costs
The model considers the timing of infrastructure projects and assumes a 25-year cost recovery from the year of construction. Once construction begins all the costs are included in the current rates, regardless of when the benefitting lands are anticipated to be developed.
For projects that have not been constructed, the model determines the cost per year for each project, and how many years remain until construction is planned. Only the portion of costs within the 25-year timeframe is included in the current rates.
As a project approaches its construction year, a larger share of its total cost is incorporated into the levy calculation. For example, if a project is scheduled for year 10, the model includes only 15 years of project costs in the current rate. The following year, this increases to 16 years, and so on, until the full 25-year period is captured in the rate.
3) Staging - Development Timing and Levy Collection
Levy collection happens when development actually occurs in a benefitting area. To calculate the per hectare rate for a project the remaining project costs are divided by the amount of developable land expected to develop in the next 25-years. If an area is not expected to develop within that timeframe, the model does not assign any cost recovery to that area.
The model will adjust the levy rates depending on when levies are forecasted to be collected over the next 25-years.
Off-Site Levy Bylaw Update
The 2026 bylaw repeals and replaces Schedules "A", "B", and "C". As part of the annual update of the OSL program, the costs for planned infrastructure are reviewed to best reflect changes in the current market and any new project cost estimates or relevant information. The 2026 rates provide an update for actual and estimated construction costs.
Off-Site Levy Infrastructure Projects Working Group
The Off-Site Levy Infrastructure Projects Working Group (OSL Working Group) is made up of developers and City administration. The working group made two recommended changes to the OSL Bylaw this year. Both recommendations passed unanimously through the working group. The changes are supported by Administration and have been incorporated into the 2026 update. The changes will be formally accepted if Council approves the Bylaw amendment. The recommendations are as follows:
1. That a standard guideline for eligible roadway costs be accepted and published on the City’s website. The eligible costs for recovery from OSLs were discussed and voted on by the working group. The motion passed unanimously.
2. That the following methodology of establishing benefitting shares of connector arterial roadway costs be accepted and published as a guideline on the City’s website:
a. All new connector arterial roads are assumed to be 100% OSL share.
b. Connector roads bounded on at least one side by established development are determined through scope of work.
c. When a traffic impact assessment is completed, benefitting shares are updated to reflect the results.
Roadway Infrastructure
There was a reduction of 3.0% in the road infrastructure off-site levy rate compared to 2025 rates. This reduction reflects changes to some project start years and phasing opportunities for projects. These changes offset impacts from the reduction in the overall development forecast over the next 25-years.
Major changes in road off-site levy projects include:
• Project 14- Fowler Way: Construction year updated from 2028 to 2030.
• Project 42- Range Road 260- South of Villeneuve Road:
o Total project cost estimate increased to account for additional lanes identified in traffic impact assessment for the St. Albert West Area Structure Plan.
o Benefitting share updated to 100% OSL to reflect 2026 working group changes.
• Project 45- Range Road 260- Villeneuve Road to E/W Crosstown: Benefitting share updated to 100% OSL to reflect 2026 working group changes.
• Project 46- Range Road 260- E/W Crosstown to North City Limits: Benefitting share updated to 100% OSL to reflect 2026 working group changes.
Water Infrastructure
There was a reduction of 9.5% in the water infrastructure off-site levy rate compared to 2025 rates. The reduction was driven by changes to project start years and actual construction costs less than estimated.
Major changes in water off-site levy projects include:
• Project 11- Northwest Reservoir Fill Line:
o Construction date was updated to outside the 25-year development timeline. The need for the northwest reservoir is being evaluated as part of the ongoing utility master plan update. Additionally, no development is forecasted in these areas for the next 25-years.
• Project 14- Giroux East Transmission Main: Project completed, and total actual costs reduced from estimate.
Sanitary Infrastructure
The sanitary levy rate increased by a weighted average of 1.9% compared to 2025 rates. This was primarily driven by the reduction in overall development over the 25-year timeframe, and Project 14 that was staged earlier than previously anticipated.
Major changes in sanitary off-site levy projects include:
• Project 2- Northeast Gravity Trunk, Lift Station & Forcemain:
o Cost estimate for the pipe storage and sluice gate component was added to the total project cost.
o The pipe storage and sluice gate are staged for 2026. Remaining project costs are staged for 2028* construction.
• Project 5- Southwest Lift Station, Forcemain, and Gravity Trunk:
o Estimated construction start updated to 2028 for the forcemain and gravity trunk. Lift station costs are staged for 2032.
• Project 8- Phase 2b North Interceptor- Project completed and total project cost reduced based on actual expenditures.
• Project 14- Northeast Lift Station 2- staged for 2028* to reflect timing for upgrade requirements with sanitary project 2 construction.
*At the time of the OSL Model presentation to the development industry for purposes of setting the 2026 rates, 2028 construction of northeast sanitary and storm infrastructure was deemed plausible subject to possible successful award of a 40% federal grant, as well as completion of a tri-party agreement for servicing between the city and two developers. Since that time, Administration has been made aware that the grant application was unsuccessful, and one of the developers has withdrawn from pursuit of the tr-party agreement for servicing, increasing the likelihood of a deferral. Project staging will be evaluated, and the model will be updated again in Q1 2027.
Storm Infrastructure
The storm levy rate decreased by a weighted average of 13.6% compared to 2025 rates. The reduction was driven by a grant received which reduced developer cost, and changes to project start years. These changes offset impacts from the reduction in the overall development forecast over the next 25-years.
Major changes in storm off-site levy projects include:
• Project 4- Carrot Creek Erosion Control - Grant awarded for 70% ($2.8 million) of the total project cost.
• Project 5- Northeast Area Storm Trunk Sewer and Outfall- Construction start year updated to 2028*.
*At the time of the OSL Model presentation to the development industry for purposes of setting the 2026 rates, 2028 construction of northeast sanitary and storm infrastructure was deemed plausible subject to possible successful award of a 40% federal grant, as well as completion of a tri-party agreement for servicing between the city and two developers. Since that time, Administration has been made aware that the grant application was unsuccessful, and one of the developers has withdrawn from pursuit of the tr-party agreement for servicing, increasing the likelihood of a deferral. Project staging will be evaluated, and the model will be updated again in Q1 2027.
2025 Off-Site Levy Annual Report
The annual off-site levy update report provides a detailed account of the functionality of the off-site levy program over the previous and coming year. It includes comparative tables outlining all changes to each project, growth, and projected collection reserves throughout the long-term management of the off-site levy program.
The report provides a detailed account of the off-site levy infrastructure constructed during the previous calendar year, the total construction costs of built infrastructure, the estimated costs for each unconstructed project, as well as the amounts of off-site levies collected.
OSL Reserves
The OSL reserves represent the account balance as of December 31, 2025, for each OSL category. The OSL reserve account summarizes the total infrastructure category balance at a specific point in time (i.e., levies collected to date less infrastructure cost reimbursements to front-ending parties).
As of December 31, 2025, there is approximately:
• $5.41 million in the road levy reserve;
• $21.39 million in the water levy reserve;
• $1.78 million in the sanitary levy reserve; and
• $1.63 million in the storm levy reserve (~$1.14 million is committed to Storm project #4).
The off-site levy program collects levies as development occurs. Levies collected will continue to be held in reserve if there are no owed front-ending parties. These funds can be used to fund levy projects. For example, the water reserve has a surplus of funds. When a water levy project is constructed, Council will be asked to authorize the use of available funds to reduce the amount of costs that need to be front-ended.
There are significant outstanding front-ending costs for the sanitary and road categories. Road and sanitary levies collected within a year will be used for cost reimbursements, during the OSL annual recoveries, until all payment obligations are met.
OSL Annual Recoveries
The City uses the off-site levies collected to reimburse parties who have front-ended OSL projects through the annual recoveries process. The OSL reserves are used to reimburse parties as quickly as possible to reduce the amount of interest front-ending parties charge the program. Since the City is a front-ending party, this allows the City to use its recovered funds to repay project debentures or reinvest in additional OSL projects.
The City is required by regulation to manage OSL reserves by each OSL category. Repayment to front-ending parties can only occur from the infrastructure reserve that matches the project category referenced in the OSL Bylaw (e.g., repayment of road project costs from the road levy reserve).
As of December 31, 2025, the total outstanding front-ending value is $71.8 million for constructed OSL infrastructure. Following is a summary of current owed front-ending parties claiming reimbursement:
Roadway Infrastructure - $37.52 million total
• City of St. Albert: $31.79 million
• Rohit St. Albert West Ltd.: $3.03 million
• Badger Land Development Corporation: $1.44 million
• Genstar: $0.63 million
• Landrex Hunter Ridge Inc.: $0.45 million
• Villeneuve Communities Inc.: $0.18 million
Water Infrastructure:
• City of St. Albert: $1.35 million
Sanitary Infrastructure: $32.94 million total
• City of St. Albert: $32.52 million
• Landrex Hunter Ridge Inc.: $0.42 million
Storm Infrastructure:
• City of St. Albert: $0.03 million
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
The OSL Working Group held three meetings in 2025 with a focus on:
• Road project costs eligible for recovery;
• Connector road benefitting share determination;
• Off-site levy front-end policy development.
Key objectives of the OSL Working Group for 2026 are to continue consultations on the City’s Front-Ending policy, discuss project and development staging, and any new projects that may be added to the bylaw as a result of the Mobility Choices Strategy and Utility Master Plan updates.
Administration hosted a virtual information session in February 2026 with a presentation on the Off-Site Levy update, followed by a question-and-answer period. There were approximately 115 landowners that received a letter inviting them to the meeting, and active land developers and their consultants also received an email invitation. Attendees were invited to submit comments to Engineering until March 5, 2026. No comments were received.
IMPACTS OF RECOMMENDATION(S)
Financial:
The financial implications of the OSL Bylaw update to the City of St. Albert are complex and are included in the attached reports, “City of St. Albert 2025 Off-Site Levy Annual Report and 2026 Bylaw Update Off-Site Levy Update” and “Corvus Template showing data used to inform Bylaw 8/2026”.
Compliance & Legal:
Section 648(6) of the MGA requires the OSL Bylaw to be advertised in accordance with section 606 of the MGA. A public notice was published in the Citylights section of the St. Albert Gazette for two consecutive weeks (February 26 and March 5) advertising the intent of Council to consider an amendment to Bylaw 30/2013 on March 17, 2026 in order to comply with this MGA requirement.
The master planning documents used within the OSL Bylaw underwent substantial consultation with the development industry and the public during their development. Updating the OSL Bylaw annually ensures the required projects and estimated project costs are reflective of best available information. As the review of the projects has been completed for 2026 and the annual report for 2025, along with supporting documentation, has been submitted to City Council, the City is in compliance with its OSL Bylaw, the Municipal Government Act, and Alberta Regulation 187/2017, Off-Site Levies Regulation.
It is proposed that the Bylaw 8/2026 receive first, second, and third reading on the same day (March 17, 2026). The MGA provides that a proposed bylaw must not have more than two readings at one 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 8/2026 is not granted on March 17, 2026, third reading of Bylaw 8/2026 will occur at the next regular Council meeting on April 7, 2026.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
Using a 25-year development timeframe for calculating levies does increase risk to the City as the model is underfunded at times until all lands are developed and project costs are collected. Risk is mitigated by updating the model annually and by not approving construction of projects that are not within the 25-year development timeframe unless the OSL Bylaw is updated to include those project costs within the current levy rate calculation.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan:
Not Applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
D. Land Use and Development
D.2. Infrastructure Planning
D.2.1. Off-Site Levy Program
IMPACTS OF ALTERNATIVES CONSIDERED
If Council does not wish to support the recommendations, the following alternatives could be considered:
ALTERNATIVE 1: That Recommendations 1 to 4 not be approved, and that Recommendation 5 be approved.
Financial:
Front-ending parties would receive their allocation of OSL receipts. This would result in less interest being charged to projects by developers who are waiting to be reimbursed for their front-ending costs. As the City is the main party waiting for front-ending reimbursements, failure to receive its allocation of OSL could impact planned debenture payments.
Compliance & Legal:
Failure to update the OSL Bylaw this year should not have any long-term negative impacts on the City. The City would still be in compliance with provincial regulations and its own OSL Bylaw. However, as the City administers the OSL program as a stewardship program for development, not updating the OSL Bylaw with the most recent costs and information is not considered best practice.
Program or Service:
Approving Recommendation 5 would provide direction on how to allocate the funds in the OSL reserves between parties waiting to be reimbursed for past construction of OSL projects. It would not update the OSL Bylaw, off-site levy infrastructure projects, or OSL rates for 2026.
Organizational:
None at this time.
Risks
There is an increased risk that current developers would be paying more or less than their proportionate share of a project. For example, undercharging developers today, results in overcharging developers in the future.
Since front-ending parties are reliant on levies collected, incorrect rates can have an impact on the timing of reimbursement and ultimate payback.
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Report Date: March 17, 2026
Author(s): Abram Iskander
Department: Engineering
Department Director: Dawny George
Managing Director: Adryan Slaght
Chief Administrative Officer: William Fletcher