CANMORE – Discussion on the necessary level of public documentation was repeatedly raised throughout the eight-day off-site levy appeal at the Land and Property Rights Tribunal (LPRT).
With developers arguing available information was lacking and the Town of Canmore countering it had met its legislative requirements, the decision of the three-person tribunal could give future off-site levy talks across the province clarity on exact expectations.
A key aspect of off-site levies in the Municipal Government Act (MGA) requires all information or data used by a municipality to calculate the levy be public, which would allow it to be replicated.
A municipality can determine the best methodology to use, but it must be “clear and reasonable,” according to the MGA.
“For me, that’s very clear they have to show how they arrive at that number,” said Eran Kaplinsky, a professor at the University of Alberta’s faculty of law, in a previous interview with the Outlook
“You can’t have clear methodology if you don’t show how you arrived at your calculations.”
Though municipalities and a company that creates models for an off-site levy may want to keep information they deem proprietary private, “municipalities have to be transparent in how they arrive at their calculations. That’s one of the principles in the regulations,” Kaplinsky said.
The Town has asked the LPRT to direct it to remove $30.68 million in projects from its off-site levy bylaw. Developers, however, have asked the LPRT to invalidate the entirety of Canmore’s off-site levy bylaw. They have also asked the LPRT to immediately direct the Town to remove the more than $30 million in projects from the bylaw before it issues a decision.
If the bylaw were invalidated, it would return to Canmore’s 2020 off-site levy bylaw. Town staff have previously said without the new bylaw, it would cost the Town $1 million to $2 million a year in collections.
Municipalities are allowed to establish an off-site levy bylaw that indicates how development charges on infrastructure such as water, wastewater and roads as new development takes place.
Off-site levies are development charges made by municipalities on new development to help cover infrastructure needs such as water, wastewater, roads and stormwater. The costs are intended to have a cost allocation between municipalities and developers, so growth pays for growth and infrastructure that benefits existing residents is split between developers and a municipality.
As the three-person panel deliberates its decision, with no timeline for issuing, will likely have future ramifications on the necessary amount of information needed to be public.
INTERPRETING PROVINCIAL LEGISLATION, REGULATIONS
In opening arguments, Gwendolyn Stewart-Palmer, a legal representative for the developers, pointed to the MGA requiring that an off-site levy must be “clear and reasonable,” with all information used being publicly available to replicate.
She said developers received some information, but it wasn’t until an appeal was filed and the Town’s submissions were made for the hearing that more information was made available.
“Our position is that transparency is the organizing principle of the MGA and the regulation,” Stewart-Palmer said. “Transparency was the word used by the minister when introducing these provisions in the legislature.
“Off-site levies, in essence, are the ability of the Town to use the credit card of developers to pay for infrastructure ultimately to be owned by the Town. It is important they be accurate. They be correct, complete, transparent, reasonable, clear, publicly available.”
She highlighted their economist, Pearce Shewchuk of Nichols Applied Management, wasn’t able to replicate the rates with the information that was available.
Gavin Fitch, the Town’s legal representative, said in his closing arguments “this appeal is not nearly as complex as [developers] are trying to make it. It does not raise nearly the actual legitimate issues they say it does.”
He further echoed that when reasonable asks and information for potential changes were given to the Town, they amended aspects of the Utility Master Plan (UMP) and off-site levy.
“The record is clear. Where BOWDA drew to the attention of the Town and CIMA+ (the Town’s main consultant on projected infrastructure needs in the Utility Master Plan) a reasonable argument where there should be no allocation of growth or a smaller allocation, the Town and CIMA+ responded reasonably and fairly to change cost allocation in developers’ favour,” he said.
REPLICATING THE LEVY
In developers’ initial submission, they were unable to replicate Canmore’s off-site levy using the Town’s transportation off-site information, which was off by several million dollars.
Pearce Shewchuk initially couldn’t validate the off-site levy calculations until the opening balance financials were made available in late July after the appeal had been made.
Shewchuk noted additional nuance in how projects are financed could be included since some may be debt-financed, which would improve the analysis and accuracy of calculations.
“I could not have recreated the adjustment factor without the additional information from CORVUS (the company that develops the model to put together off-site levies). With the additional information from CORVUS, I could reproduce the adjustment factor but that’s because the additional information including opening balance information was not available publicly.
“Absent the additional information provided by CORVUS, we would not have been able to calculate the levies as indicated in the bylaw. Most importantly, the opening balance was not available publicly and that would’ve confounded the successful calculation in the adjustment factor.”
Greg Weiss, president of CORVUS Business Advisors, said the section of the MGA on replicating levy rates “often creates expectations in the minds of stakeholders who are attempting to interpret that section that they should quickly be able to replicate rates dividing total costs by total area that belief is both inaccurate and unrealistic.”
He said Shewchuk had infrastructure staging plans, project costs/estimates, the year it will be constructed, the lands benefitting and rate of development of those lands to calculate a levy, but he said grants, service demand and cost allocated to development are also needed.
“Not only has the Town provided the necessary information to calculate the rates … it has provided many other information items to make replication easier,” he said.
Peter Kinsberg, the Town’s asset management coordinator, highlighted there are several challenges in calculating an off-site levy, ranging from translating the UMP to Canmore’s zones and there being multiple types of rates per zone.
Kinsberg said the model is updated annually with monthly corrections and a rolling plan that looks forward 25 years. With developers paying levies on a unit-to-unit basis “only at speed development occurs,” and payment is determined when a development agreement is signed.
He noted he does monthly reconciliations of the developments paid, so it aligns with rates posted in the bylaw, the specific off-site zone and type of development.
Kinsberg highlighted with 17 off-site zones and four development types in each area, calculating for a 25-year planning forecast resulted in about 1,700 numbers each time the levy bylaw is updated.
He said the historical collection average is about $2 million a year.
UTILITY MASTER PLAN
When developers’ expert witnesses who analyzed CIMA+’s – the Town's consultant who created the technical documents such as the UMP and studies for wastewater treatment plant – work testified, Arcadis Group’s Rod Sieker and Kyle Baglole noted they had been unable to find key information in assessing the plan that feeds into off-site levies.
On multiple occasions, the two said they were unable to find necessary documents in assessing projects proposed in the UMP and the council-approved cost sharing in the off-site levy bylaw.
However, in cross-examination, Fitch questioned Sieker and Baglole that despite their review of CIMA+ and Town documents, they would know “a lot more about these projects than you.”
Sieker agreed CIMA+ and the Town would have “more intimate knowledge,” but “in the analysis that we reviewed the projects in line with the MGA and regulation that all information needs to be public and provided to the public, so information that would’ve been provided was part of our analysis.”
An attempt by Sieker and Baglole to find the 2016 UMP, which is key in advancing to the existing UMP and share projects outlined in the 2024 off-site levy bylaw, was unsuccessful.
Fitch pointed to it being available in an embedded file in an Aug. 10, 2023, Outlook article, “Canmore Utility Master Plan should be council approved: governance experts” which had attached a 113-page summary.
The article had an embedded version of Canmore’s 2016 UMP, but not the full copy, which had information used to calculate the 2024 off-site levy.
Baglole said they were unable to find the document on the Town’s website and the embedded version in the Outlook’s story didn’t have sufficient information to do a proper review.
“We could not access the 2016 Utility Master Plan,” he said.
EMAILS INDICATE DOCUMENTS NOT SHARED
During cross-examination of the Town’s expert- and fact-based witnesses on the UMP, Kathleen Elhatton-Lake raised several issues of information being available to be sent to developers in spring and summer 2023, but ultimately not sent.
She outlined a technology assessment for the wastewater treatment plant and the cost breakdown hadn’t been given to developers as of Aug. 21, 2023, when both sides met in person at the Civic Centre for the final time.
A May 8, 2023, email from Andrea Comeau, the Town’s manager of public works, to Ian O’Donnell, the then executive director of Bow Valley Builders and Developers Association (BOWDA), said the Town would “ensure that only the capacity-related costs for the WWTP are applied to the off-site levy model.”
Elhatton-Lake noted there wasn’t further information given to developers on wastewater treatment plant capacity costs after the May 8, 2023, email before it was published in the council agenda in February, 2024, at first reading.
“That’s correct,” said Comeau, adding developers didn’t raise it at the Aug. 21 meeting that served as the last meeting between the two sides.
When the allocation to Dead Man’s Flats was raised – information didn’t become available until the Town filed its legal submission and showed $4.5 million was being incurred by the Town when it should have been Dead Man’s Flats – Comeau said they did adjust when it was brought to their attention.
“The Town is certainly agreeable to make that change to reflect that. We try to be fair when a reasonable argument is put towards us,” he said.
A Nov. 21, 2023, email from Comeau to Whitney Smithers, the Town’s general manager of municipal infrastructure, and three other Town staff had Comeau provide the CIMA+ summary reports of cost sharing between the Town and developers. One was for UMP-related projects and the other document was for the wastewater treatment plant.
“These reports are ready to share with BOWDA to allow us to move on to update the OSL (off-site levy) bylaw,” stated Comeau’s email.
“These reports weren’t shared with BOWDA?,” asked Elhatton-Lake.
“It sounds like that’s actually what happened,” Comeau said. “Our intention was to share them with BOWDA.”
“But they weren’t shared before Dec. 8, 2023, when Ms. Smithers said that consultation was concluded?,” asked Elhatton-Lake.
“Yes, but I believe the details in the schedules are related to a summary of the UMP, which was concluded, and this was just a summary to add as an appendix to the off-site levy so we didn’t have an overly large appendices to the off-site levy bylaw. I don’t think the information was any different than we had already shared with BOWDA.”
Elhatton-Lake highlighted the specific documents were the first time developers would have seen a cost allocation between the Town and Dead Man’s Flats.
“There is new information in [these documents] that was not shared with BOWDA?,” she asked.
“There were parts of it, yes,” he said.
In addition, Elhatton-Lake added an Oct. 19, 2023, email from Smithers to BOWDA chair Brian Talbot and O’Donnell, she said the Town asked CIMA+ to give “consolidated detail on the methodology related to growth attribution in our current utility master plan” as well as a rubric to show alignment of Canmore’s off-site levy bylaw to the MGA and off-site levy regulations.
“The latter will become a tool to be used in our off-site levy bylaw corporate directive,” she wrote.
However, Elhatton-Lake emphasized that if either had been completed, neither was shared with BOWDA.
Comeau said they were working on developing both, but said there were potential plans for changes to the UMP and “as things escalated, that was never completed.”
OFF-SITE LEVY REPORT MISSING
In the provincial off-site levy regulations, an annual off-site levy report is required to be published each year.
It indicates methodology, levies received and allocated and year-end reserve balances among several other pieces of information.
During cross-examination of Kinsberg, Elhatton-Lake noted Canmore released a 2022 report but not in 2023. Kinsberg said it was “on hold internally,” waiting for the outcome of the appeal to potentially add more clarity and information.
“It’s not a pressing document. It’s not required for any decisions. We thought it’s best to hear what the [LPRT} felt would be the most appropriate information we could add to improve how we do our work,” he said.
Elhatton-Lake noted with the appeal being for the 2024 off-site levy bylaw and the 2023 report for the 2020 off-site levy bylaw, there was no reason to withhold such a report since the appeal would have no impact on it.
Kinsberg said waiting could aid in better alignment for a “more comprehensive explanation we can give to the public on the allocation of benefits.”
Elhatton-Lake highlighted the Town has current information on reserve account balances, but it had not provided them.
“We are missing a full year – approximately $2 million of levies – that are not accounted for because the Town, despite passing this bylaw in March 2024, didn’t use the reserve account balances on December 31, 2023. They missed an entire year,” she said.
“That has a significant impact on the levy rates and as such the Town has continued to not produce its annual report – a legislative requirement under the MGA – which would include and allow the appellants to know the rates as of Dec. 31, 2023, and what the impact would be.”
