Committee of the Whole: Who Pays for Growth—and When?

Diamond Valley’s Committee of the Whole meeting on September 9 dealt with three subjects that may initially appear unrelated:

• off-site levies;
• a proposed vacant residential property tax subclass; and
• renaming a short portion of Hubert Street SW.

However, the same question ran through all three discussions:

Who should pay for growth—and when?

Should new development help pay for the infrastructure it requires? Can a higher property tax encourage development when servicing is the real obstacle? When a private development requests a municipal change, should the Town absorb the cost?

Before looking at those questions, it may help to explain why Council holds a Committee of the Whole meeting.

What Is a Committee of the Whole?

A Committee of the Whole meeting brings all members of Council together to examine complex subjects in greater depth than may be possible during a regular Council meeting.

At the beginning of the September 9 meeting, the Deputy Mayor explained that the format is somewhat less formal. Councillors can ask questions, compare perspectives and work through the consequences of different options.

The Committee generally does not make final decisions or direct Administration. Instead, it develops recommendations that are brought to a future regular Council meeting for formal consideration.

That distinction is important. A Committee recommendation shows Council’s emerging direction, but it is not necessarily the final decision.

The Diamond Valley Committee of the Whole therefore provides a place to explore complicated questions before Council is asked to decide them.

The September meeting demonstrated why this format can be useful. Council spent approximately 93 minutes discussing off-site levies before reaching a recommendation.

Council Remuneration

The meeting began at 5:00 p.m. with a closed discussion concerning Council’s remuneration policy.

When Council returned to the open meeting, the Committee made two unanimous recommendations.

The first was for Administration to complete an internal market comparison using relevant municipalities, regional factors and 2024–25 Alberta Municipalities data.

The review will examine several possibilities, including:

• a monthly base stipend;
• a combination of a stipend and per diems;
• the full-day per diem rate;
• the deputy mayor’s honorarium; and
• the annual cost-of-living adjustment.

The resulting options would be considered as part of the 2027 budget process.

The second recommendation was to amend the Council Committees Bylaw by removing or modifying the automatic requirement to establish a Council Remuneration Review Committee.

Councillors acknowledged the awkwardness of reviewing their own compensation. Their direction was intended to place the comparative and administrative work in the hands of Administration and establish a clearer process for future councils.

Both recommendations must return to an open Council meeting before any formal changes are made.

Off-Site Levies: Growth Paying for Growth

The largest discussion of the evening concerned off-site levies.

An off-site levy is a charge collected from new development to help pay for eligible infrastructure required because of growth.

The basic principle is:

Growth should contribute to the cost of growth-related infrastructure.

Eligible infrastructure can include water, wastewater, storm-water and transportation projects. Provincial legislation also allows certain growth-related recreation, library and emergency-services facilities to be included.

However, off-site levies cannot be treated as general revenue. The money must remain connected to the eligible capital project and the portion of that project attributable to future growth.

For example, if a wastewater project benefits both existing residents and future development, only the growth-related portion can be recovered through an off-site levy. The remaining cost must come from taxes, utility rates, grants, reserves, borrowing or another municipal funding source.

Two Towns, Two Legacy Systems

Amalgamation did not automatically combine the former Black Diamond and Turner Valley off-site levy bylaws.

Diamond Valley therefore continues to administer two systems with different approaches.

The former Black Diamond system relies more heavily on town-wide levies. The former Turner Valley system contains numerous area-specific levies in which particular developments contribute to particular projects.

Both bylaws were adopted in 2022, but they were based on the infrastructure, growth forecasts and development assumptions of the two former municipalities.

Council must now decide whether to retain those separate systems or eventually replace them with one evidence-based Diamond Valley bylaw.

Why So Much Money Remains Uncollected

Several projects supported by the existing levies have already been completed, but much of the expected levy revenue has not yet been collected.

This occurs because municipalities sometimes have to build infrastructure before the anticipated development takes place. The Town carries the initial cost, and levy revenue arrives gradually as land is developed.

Six completed projects remain within the existing levy system:

• West-end Lagoon upgrades;
• Anderson Crescent gravity-main upgrade;
• North Sewage Lift Station upgrade;
• Royalite Way gravity-main upgrade;
• North Feeder Main; and
• Royalite River Crossing and pressure-reducing valve.

Some of the older projects were completed between 2004 and 2008. Eighteen to 22 years later, between 70% and 98% of their original recoverable costs remains outstanding.

That does not necessarily mean the developers failed to pay. In many cases, the development expected to produce the levy revenue either proceeded more slowly than forecast or did not occur.

It illustrates one of the principal risks of the system: the infrastructure may be needed first, while recovery depends on future development that could take years—or decades—to arrive.

$326,108 Returning to Town Reserves

Administration also identified money that can now be transferred from six levy accounts associated with completed projects.

At the end of 2026, approximately $326,108 will be moved into Town reserves:

• $259,802 into wastewater reserves; and
• $66,306 into water reserves.

The projects have already been financed, so the collected levy money can be applied to the eligible infrastructure costs and returned to the appropriate reserves.

This will not necessarily happen at the same level every year. Levy collections depend on the location and pace of development. Some years may produce little or no transfer.

Administration intends to review the accounts annually and bring available transfers to Council.

A Useful Tool—but Not a Simple One

Council examined both the advantages and drawbacks of retaining off-site levies.

The principal advantage is that existing taxpayers are not expected to carry the entire cost of infrastructure needed for future growth.

Levies also connect development approvals with long-term capital planning and create a means of recovering some of the money the Town may have had to invest in advance.

The disadvantages are equally real.

Off-site levies increase development costs. Their calculations require engineering, financial analysis, growth forecasts and regular updates. A unified bylaw review could itself cost a substantial amount.

Forecasting also remains difficult. Construction prices change, development slows or changes location, and infrastructure priorities evolve. If assumptions are not regularly updated, the levy rates may no longer reflect the actual cost or timing of the projects.

Repealing the existing bylaws would not eliminate the Town’s responsibilities for money already collected or projects already constructed. It would simply stop new collections while leaving the Town to resolve the remaining legal and financial obligations.

Council therefore found little advantage in repeal without a replacement.

What Should a New Levy Include?

Council showed general support for initially concentrating a future unified bylaw on four core infrastructure categories:

• water;
• sanitary sewer;
• stormwater; and
• roads.

Much of the underlying work for these services is already being completed through the Municipal Development Plan and Infrastructure Master Plan.

Recreation, library and emergency-services facilities can sometimes qualify, but only when the Town can demonstrate that the project is needed because of growth.

An off-site levy cannot simply pay to replace an aging swimming pool, arena or fire hall. The Town would have to establish what additional capacity future development requires and calculate the growth-related share.

Council questioned whether the cost of the additional studies needed to include those facilities would presently be justified.

Council’s Recommendation

The Committee unanimously recommended that Council:

Include an off-site levy bylaw review and update in the 2028 budget, coordinated with current planning and infrastructure work.

If approved at a regular Council meeting, this would begin the process of creating a single Diamond Valley off-site levy system.

It would not establish the new levy rates in 2028. Administration’s proposed schedule anticipates developing the new bylaw in 2028 and bringing it to Council for consideration in 2029.

Vacant Residential Land: Incentive or Penalty?

Council next considered whether vacant residential properties larger than 0.5 hectares should have their own tax subclass and potentially pay a higher rate.

The objective was to encourage larger vacant properties to be developed, sold or brought into more active planning.

Administration concluded that the proposal would not necessarily achieve that result.

Many larger residential parcels are greenfield lands. Their development may depend on:

• available water capacity;
• wastewater and storm-water servicing;
• road and intersection improvements;
• access;
• environmental or geotechnical conditions;
• utility extensions;
• financing;
• market demand; and
• subdivision or development approvals.

A higher tax bill cannot remove those barriers.

It could instead become an additional carrying cost for the owner or create pressure to develop land before municipal infrastructure and orderly phasing are in place.

Council accepted Administration’s recommendation not to proceed with the new residential subclass at this time. Because no further action was required, the Committee did not make a separate recommendation.

The Town will continue monitoring vacant residential land, development trends, servicing constraints and assessment growth.

When Does an Incentive Become Effective?

The discussion also clarified how Diamond Valley’s existing vacant non-residential subclass works.

Once a development permit has been approved, the property is no longer treated as vacant for this purpose. Merely submitting an application is not sufficient.

That distinction is intended to encourage a landowner to submit a complete application and move it through the approval process—not simply file an application to avoid the higher tax rate.

Council discussed whether paying an off-site levy should also remove a property from the vacant subclass. Administration advised against this.

A landowner can pay an off-site levy before development begins. Once it is paid, the Town generally cannot collect the same levy again. Allowing that payment alone to remove the higher tax rate could permit land to be held undeveloped for decades, defeating the purpose of the vacant-property policy.

The exchange highlighted the difficulty of designing a tax incentive that encourages actual development without becoming punitive or creating unintended loopholes.

Renaming 38 Metres of Hubert Street

The final public discussion concerned Council’s previous direction to rename approximately 38 metres of Hubert Street SW, south of Sunset Boulevard West.

The short road segment provides access to the Whiskey Ridge Hotel development. The developer expressed interest in a distinctive name that could support the hotel’s branding and identity.

Council had already directed Administration to proceed in consultation with the developer. The September report was intended to confirm that direction after identifying the work involved.

That work is more extensive than several councillors initially realized.

Administration estimated approximately 28 staff hours, along with possible costs for signage, public notification and database updates. A normal road-renaming application where no homes are affected carries a fee of approximately $800.

The change must also be circulated to emergency-response agencies, Alberta Transportation, utilities, Canada Post and mapping organizations.

The Emergency-Response Question

Fire Rescue explained that road-name changes can create problems when municipal addressing, dispatch systems, physical signs and third-party navigation platforms do not update at the same time.

Local firefighters may recognize the location, but EMS, RCMP and mutual-aid responders may depend on external mapping systems. Some of those systems could take 18 to 24 months to reflect a change.

The risk can be managed, but only if the Town coordinates the transition carefully and ensures that emergency-response systems and physical signs are accurate before the new name comes into use.

One councillor opposed the change, arguing that street names form part of the community’s identity and history.

Others believed Council had already offered the renaming as a gesture of goodwill toward a major commercial investment and should honour that commitment.

There was also discussion about whether the developer should pay the direct costs. Some councillors supported cost recovery, while others believed the Town should absorb the expense because Council had initiated the offer.

What Happens to Hubert Street?

No new recommendation was made.

Council had already passed a motion directing Administration to rename the road segment. Unless Council formally changes that direction, Administration will continue with the process.

The discussion did make one expectation clear: the new name should not be implemented until the addressing, signage, mapping and emergency-response requirements have been properly coordinated.

The question of precisely which direct costs will be charged to the developer was discussed but not separately resolved during this meeting.

Who Pays—and When?

Each of these discussions involved a different balance between public and private responsibility.

Off-site levies ask future development to contribute to the infrastructure that growth requires—but the Town may carry the cost for years before enough development occurs.

A vacant-property tax may encourage development when an owner is simply holding usable land. It is much less effective when water, servicing, financing or municipal approvals are the actual obstacles.

Renaming a road may support a valuable commercial development, but it also consumes staff time and creates costs and public-safety responsibilities that extend beyond the development itself.

There are no simple answers.

What the Committee of the Whole provided was time for Council to examine those trade-offs before making formal decisions.

That is ultimately the value of the meeting: not that every question is settled that evening, but that the costs, responsibilities and consequences become clearer before Council acts.

Links

• Council Debrief Series https://www.sustainablelife.biz/category/council-debrief-series/

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