Staff memo.
Financial Planning and Budgets Staff were interviewed by the Daily Commercial News who are doing an article about changes/trends in development charges in southwestern Ontario.
Questions and Staff’s responses are found below:
1. Q: When do the City’s DC’s take effect? A: March 2, 2014 2. Q: What happened with the rate? A: The residential rate went up approximately $3,000 or 12.5% over the rate currently in effect. The non-residential rate for commercial, institutional and industrial has decreased. Ms Purton further explained that the City had decided to blend the rate which was a change from the previous background study and by-law. A copy of the new rates will be sent to Ms. Baxter as follow up.
3. Q: Why did the City decide to blend the non-residential rate? A: There were three primary reasons for this change 1) the administrative cost and difficulties for both staff and the development community in establishing whether a development was predominantly institutional/commercial or industrial and what rate would be charged 2) that despite the previous background being during a time of slow economic growth, the split rate had not generated the economic activity that was anticipated 3) the need to provide greater certainty when negotiating with the development community 4. Q: Are the current rates available on the City’s website: A: Yes 5. Q: Does the City have any other programs in effect to help generate development? A: Yes, there is a Council approved tax increment based grant program that was approved by Council fairly recently. It was explained that the TIBG program is divided into three sections – brownfields, heritage and downtown and that it provides tax assistance to property owners over a period of 10-years or to an upset limit as determined by eligible expenditures that are incurred by the developer 6. Q: Does the TIBG program have a cap or is it on-going and has it been successful? A: Yes, the approved program cap is $33 million. It was further noted that the program has been successful and a report that went forward to a public Planning Council Meeting on Monday February 10, 2014 identified that the entire downtown portion of the fund had been exhausted. Ms. Baxter was very interested in this program and its success so plans to follow up with the Downtown Renewal Office for more information.
7. Q: Were there any other trends that were looked at as part of updating the DC Background Study? A: Staff had considered an area specific charge mainly for the downtown and HCBP areas. It was decided not to move forward with that recommendation and maintain a City wide rate due to the financial risk associated with an area specific rate. Historically the City had not utilized an area specific rate.
8. Q: How long did it take to do the update? A: The City began their update in Fall 2012 and just received approval of the 2014 DC By-Law Monday February 10, 2014 9. Q: What considerations are taken in updating the background study? A: Ms. Purton explained that the 2013 Background Study is built off of inputs from Council approved master plans and growth management strategies and other related policies. Ms. Baxter further asked if the growth forecast was done independently of other growth policies and was told no, the growth forecast in the DC study is based off of the City’s official plan and the province’s places to Grow legislation.
10. Q: How are funds collected? A: funds are collected at either time of subdivision agreement or building permit and transferred into a separate reserve by service. Funds are spent from Council approved projects as identified in the background study and released from those reserves at the time of the expenditure. Ms. Baxter sought clarification whether the funds collected could only be used in the specific area that the development occurred and was responded no, the collections are pooled and are used to fund the projects in the background study.