Local Area Services
Under the Community Charter, a municipality may provide a service within a
part of the municipality. Such a service is known as a “local area service”, and the
area within which the service is provided is known as a “local service area.”
Municipalities may recover all or part of the cost of a local area service by
levying local service taxes against the properties located within the boundaries
of the local service area. A local service tax may be a
property value tax, a
parcel tax or both.
A municipality may establish a local area service to provide any type of municipal service to provide particular benefit to a portion of a municipality. For example, a municipality could establish a local area service to provide:
A business improvement area service is a special type of local area service. In
the case of a business improvement area service, the local service tax may only be
levied against properties classified as business and light industrial properties.
The approval of the property owners or electors within the proposed local service area is required and there are three methods that can be used:
A municipality can borrow money to build capital works required for the provision of
a local area service. Since all or part of the costs of borrowing are to be repaid
by owners of properties in the local service area, approval of all the electors of
the municipality for the borrowing is not required; however, either the property owners or
the electors of the local service area must approve the borrowing by one of the three
methods that is required to establish the local area service.
If part of the cost of borrowing for the purposes of a local service area will be
repaid by other means, that part of the borrowing must usually be approved by all the electors
of the municipality either by holding a referendum or through an alternative approval
process. However, some borrowing does not require the
approval of the electors.