■ How it works: Local improvement levies or surcharges can take a number of forms, but they generally refer to a special fee or tax collected directly from property owners and users who stand to directly benefit from a specific infrastructure project to enhance service in a localized area of a particular community. Oftentimes, the levy is used to service the local improvement debt that has been taken on to develop or upgrade the infrastructure.
■ Assessing the potential: Local improvement levies carry a specific advantage over other funding sources in that they have a direct link between the costs of an infrastructure project and those who benefit. Sometimes, such levies are used only after local consent has been given, and are thus part of a democratic decision-making process as well. From a number of vantage points, local improvement levies appear to be a good financing source for infrastructure. The problem, however, is that they can only be employed to fund a narrow range of infrastructure projects, such as underground utility upgrades or localized road and curb work that can be recouped through frontage charges. As such, they cannot speak to the larger infrastructure issues such as arterial roads or transit extension. To be sure, local improvement levies should be used wherever possible if only because of the link established between the work being done and those who benefit. But there is a downside to this as well, in that lower income neighbourhoods lack the same ability to finance such improvements, leading to questions of inequality.