INNISFAIL – The town is facing anger from 61st Avenue landowners in West Gate Industrial Park who have hired a lawyer to question the town’s process to hit them with a special tax to recoup part of the overall $913,000 cost for roadway improvements.
“The landowners are angry and disappointed that they were not consulted, nor were they given any notice of the special tax being put into effect until they received their tax notices for this year,” said Innisfail lawyer Chad J. Evans in a letter that was included in the agenda package for council’s regular meeting on July 12.
“Many of these businesses have been operating on 61st Avenue for more than a decade, and have paid their property taxes annually, calculated on the same basis as other commercial property owners, despite not having a paved road, street lights or sanitary sewer for many of those years.”
The 61st Avenue roadway at the west side of the industrial park was upgraded in 2020 from a gravel avenue to a paved industrial collector road. The entire 650 metres of the existing roadway was widened and curbs and gutters were installed.
Asphalt paving was completed, as well as the approaches into all businesses along the avenue. Drainage improvements were also included to eliminate ponding water along the edge of 61st Avenue.
The contract for the 61st Avenue improvements was worth $913,655.83. It was approved by council on April 27, 2020.
Last April town council approved the 61st Avenue Special Tax Bylaw, which gave the town legal authority to collect the special tax for the next 15 years. The new 61st Avenue Special Tax Bylaw must be brought back annually to town council for approval.
Council was told administration determined that $587,565 of the total $913,655.83 cost -- which covers the paving portion of the 61st Avenue reconstruction project -- would be included in the calculations of the special tax.
An administration report stated 15 per cent of $587,565 worked out to $88,134.75, a total amount 10 property owners would have to pay back to the town through the special tax in a 15-year agreement. Each year the town will be generating $5,875.64 in new tax revenue.
The report added the annual amounts each property owner pays back to the town over the next 15 years varies from a low of $207.40 to a high of $1,032.33.
Council was told in April the town worked with property owners on the special tax issue.
However, Evans outlined several problematic issues in his letter to the town, including those dealing with the provincial Municipal Government Act.
“The landowners recognize that the Municipal Government Act provides the town with taxation authority, including to put into place a special tax, however they question the timing of the tax, the lack of consultation, and they do have concerns regarding whether the special tax was properly put into effect,” said Evans.
“Of particular concern, the bylaw that put the special tax into place does not appear to state the estimated cost of the service or purpose, as required by section 384(c) of the Municipal Government Act.
“It is also a concern that the bylaw may not comply with section 385 of the Municipal Government Act which states, 'A special tax bylaw must not be passed unless the estimated cost of the specific service or purpose for which the tax is imposed is included in the budget of the municipality as an estimated expenditure'."
Evans’ letter added his review of the 2021 town budget documents posted online did not appear to show the estimated cost of the “specific purpose” as being included in the budget.
He also said the timing of the special tax was poorly received by his clients as it came in during the COVID-19 pandemic, which already was causing an adverse financial impact.
The lawyer asked the town to review his clients’ concerns and get back to him at the “earliest convenience.”
Todd Becker, the town’s chief administrative officer, told council in his report that administration would review the 61st Avenue Special Tax Bylaw processes that led to council's approval.
He said the review is expected to be presented to council toward the end of July, which will be followed by a response back to Evans.
“They raised concerns how that bylaw was administered and I am just going to go back in and just confirm that it was done properly and if it wasn’t I will certainly communicate that as well,” Becker told The Albertan.
He said the review, which he will lead, will specifically look at the Municipal Government Act and communication issues raised in Evans’ letter.
“This is just a process to give them confidence that the bylaw was administered properly or if there was anything at fault with how we applied it we will certainly recognize that as well," he said.