WELLINGTON NORTH – Council here had a special virtual meeting on Nov. 30 with stakeholders to discuss modifications to current development charges.
Development charges are imposed on new developments to cover the additional capital cost of having to then provide municipal services to that new development. The commonly accepted idea being: growth pays for growth.
Although the township’s current development charges bylaw is valid until 2023, a new bylaw needs to be passed by Sept. 18, 2022, because of recent changes to the Development Charges Act, kickstarting a three-stage process — preparing a background study, holding a public meeting and finally passing a new bylaw.
Changes to legislation
The amended act removed a 10 per cent statutory deduction for certain services, changed the number of statutory exemptions, allowed for deferral of payment for certain types of development and changed rules around the interest that could be charged by municipalities on payment deferrals.
Rental housing not belonging to an institution or non-profit can take six years to pay off development charges, and non-profit housing charges can be paid off over 21 years.
The cost of a vehicle for bylaw enforcement is now factored into the development charge calculations, along with already-included services ranging from roads services to fire services.
Majority of growth forecasted for Mount Forest
The township’s population is anticipated to increase by 4,403 people by 2041, with most of that growth (64%) forecasted to occur in Mount Forest’s urban area.
To service growth, John Murphy, a municipal finance specialist with DFA Infrastructure International, told council the township is looking at spending $68.6 million on capital projects between now and 2041, in both rural and urban areas.
But the calculation of how much of that overall expense can be recovered through development charges is negatively influenced by considering how much new capital will benefit existing residents and by factoring in existing reserve levels.
Murphy said $6.4 million could be recovered through development charges for municipal-wide services, $6.5 million for water, and $19.9 million for wastewater capital costs.
Draft development charges
Compared to current rates, increases range between $416 at the high end for single/semi-detached dwellings to $104 at the low end for “other multiples.”
“When looking at the non-residential, there is a small decrease over the current charge,” Murphy said.
Compared to 14 nearby municipalities, Wellington North’s current and drafted development charges are above the average total urban development charge of $19,439 for a single-family urban dwelling.
Currently, the township’s development charges are $5,100 higher than that average, totalling $24,539. With proposed changes enacted, charges for a single-family urban dwelling would rise to $24,955 in total, an increase of $416.
“It gives you an indication that current and proposed charges are not considered excessive compared to some of the municipalities that are compared,” Murphy said of the breakdown.
“The same can be said for the non-residential charge; while both the current and proposed charges are above the average of the municipalities reflected … they are not the highest and they would not be considered excessive,” he said.
Mayor Andy Lennox said, “Given the number and scale of capital projects that are going to be undertaken to accommodate this growth, I’m thrilled to see that the development charges, the net amounts, are not significantly different than what we’ve had in the past …
“From a balance perspective, it’s pretty good in that we’re not asking a whole lot more of the developers but we’re looking to deliver a whole lot more in terms of capital projects to support development.”
Speakers from developers like Hapfield Developments and Arthur Green Developments – to name some – posed questions about how calculations were made, advocated for continued purpose-built rental housing incentives, and voiced concerns about discretionary interest rates on payment instalments.
Township CAO Mike Givens said a balance needs to be found between offering incentives for developers and how much current taxpayers will need to pay as a result of incentives.
“Every time we incent development charges, it undervalues the amount of dollars we’re collecting to complete capital works to allow for that development,” Givens explained.
“We’re leaving a gap that is basically captured by the taxpayers.”
Councillors weigh in
Although 10 “known” homebuilders attended the meeting, according to clerk Karren Wallace, some councillors felt the meeting did not provide enough stakeholder engagement.
Councillor Dan Yake said he wanted more time to go through the proposed numbers to try and understand what was being presented; councillor Steve McCabe too wanted more time to digest and “feel it out.”
McCabe and councillor Sherry Burke wanted to hear more conversation, both from the public and developers, before any decisions were made.
Lennox wondered how many developer invitations were sent out and asked about the process.
Finance director and treasurer Adam McNabb said staff compiled a list of known developers in the community and surrounding areas and emailed a Zoom invite with a link to the meeting agenda.
Yake questioned when invitations went out.
“Yesterday,” Wallace responded.
“Well, there’s not very much notice to begin with … could we have got more people had we given more notice?” Yake asked, later saying that one day isn’t “appropriate.”
Councillors opted to use a future public meeting as an opportunity for additional stakeholders to speak up should they desire.
Before a new development charges bylaw can be passed, a public meeting will be held on Feb. 10 for further input, said McNabb.
