City to double land levies

The cost of land for developers could double in order to cover the expected cost of growth over the next 25 years.

City council approved a report from the city’s planning department that called for levies for the approximately 363 remaining acres in the city to increase to $39,826 per acre from $19,500 an acre.

The recommendation comes from a study commissioned by the city to look at growth trends in the next 25 years and make recommendations based on those projections.

The report, produced by the consulting firm AECOM, says the city will expect around an increase in population of about 8000 over the next 25 years.

The report suggests there’s enough residential zones to accommodate 79 years of even above-average growth, but that the city would run out of industrial land well before 25 years is up.

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As the city grows, the cost of servicing areas will increase as the land becomes less than ideal and labour and material costs go up.

As city planner Yves Richard explains, the city’s current development levy was last updated in 1999 so it’s no longer a true reflection of the development costs.

“That’s more than 10 years ago and those costs should have probably been reviewed before based on the new costs of today (such as) labour, material and so on,” said Yves.

He added that not only were there increased costs but there was a need to have enough in the city coffers to facilitate growth. The report’s quoted per-acre cost is intended to cover the arterial roadways, primary water mains and sewers.

“We certainly expect to grow and we’ll need to build new roads, upgrade the water treatment plant and things like that,” he said.

“The rate of the levy is proposed to be adjusted to cover those costs for the next 25 years so the city’s not short.”

Richard added that the province requires up-to-date studies to defend the cost of land as well.

While the proposal almost doubles the cost of the levy, the city is still in a competitive position compared to other cities in the province said Richard.

Regina currently charges $183,000 per hectare, Saskatoon $158,000 and Moose Jaw $79,740. Once the new levy is enacted, Prince Albert will charge $98,372 per hectare.

“We’re still obviously way lower than Regina and Saskatoon but we’re going to be pretty close to Moose Jaw,” he said.

Cost increase not fixed

Council voted in favour of adapting the policy, but there’s still some room to change the values around as long as the end result is enough money being raised to remain sustainable.

The report lists several options. A flat rate can be adopted that would increase the levy for all land in the city, or certain areas can be charged at different rates to make some more competitive. The last option is that the city can adopt lower rates than recommended and make up the difference through taxes.

The city will meet with developers to discuss how it will affect development in the city and discuss the changes during budget deliberations.

adesouza@panow.com