July 17th, 2024

Developer fees for upgraded pipes, roads in the Hat facing 9% increase

By Collin Gallant on June 21, 2024.

Workmen stage cribbing for a foundation in the southend community of the Hamptons in this 2020 file photo. Fees charged to developers for road and pipe upgrades could be on the rise, as suggested by a city committee.--NEWS FILE PHOTO

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Fees paid by developers to extend or upgrade pipes and roads to their subdivisions could rise by 9 per cent in a proposed update to the city’s off-site levies bylaw.

The list of areas, known as development nodes, should also change slightly to localize costs in a small area of Medicine Hat’s far southeast corner, city staffers told council’s development and infrastructure committee on Thursday.

“It’s attributable to the increased cost of procurement and getting these projects built,” said Conrad Westerton, an engineer with city planning who guided the update.

“It includes cost increases in 2021 and 2022, as well as the inclusion of a small zone (in the south end). Construction inflation during that time was about 8.7 per cent in Alberta.”

The list of road projects hasn’t changed since the bylaw was last updated in 2022, said Westerton, but the estimate cost of completing them has grown.

It was discussed with developers and industry association in meetings last November and again in February

“They certainly understand that (construction) costs have increased,” said Westerton.

Such road projects and upgrades along with water, sewer and storm sewer lines – required to extend or upgrade utility service to new communities – is now expected to cost a total of $408 million if all areas were fully built out.

According to a direct benefit formula that divides cost between new builds and existing tax base, developers would pay a total of $149 million toward the totals, and taxpayers $257 million.

New fees range from $175,000 per hectare in the newly created Node 13 (a small area near the Black and White Trail), most of which is attributable to new sanitary sewer projects. The area was hived off from the greater Southlands node to reduce fees there, by about $40,000 per hectare to $128,900 .

At the low end, developers would be charged $38,000 in Brier Run area, a city-led mid-term proposal to build on vacant land near the Big Marble Go Centre.

Such fees are typically built into lot prices, but are payable when subdivisions are registered.

A fee of $45,000 per hectare is set on land north of Rotary Centennial Way, north of Crescent Heights, though no medium to long-term development is planned there. Fees in Ranchlands would rise to $45,900.

Fees in the Box Springs Business Park would be set at $157,000, as would Brier Park and the Southwest residential area, including Coulee Ridge.

Councillors on the committee voted after discussion to forward the proposal to council for adoption in July.

Most established areas in the city are known as zone 8, where no levies are typically due, though $19,000 per acre is required from city coffers to the off-site account for a mutually beneficial traffic levy.

“It’s important to note that this formula is developed with equity and fairness in mind,” said Coun. Alison Van Dyke. “There’s always a perception in the community that the benefits (of levies) are skewed.”

Chair, Coun. Shila Sharps, said she will move to have the entire presentation discussed in depth when it arrives at council – a move backed by committee member, Coun. Andy McGrogan.
”Off-sites are really mysterious unless you are immersed in the development community.”

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