Wellington North contractors who were underbilled for development charge fees won’t be required to make up the shortfall.
Council has decided not to pursue recovery of the money – pegged at $229,000. The rebates and deferrals were given to contractors while council attempted to bring in lower development charges through a new bylaw and make the bylaw retroactive.
Resident Jens Dam challenged the township’s handling of the new bylaw, claiming council could not make the charges retroactive. He took the township to the Ontario Municipal Board (OMB) on two separate occasions and won both challenges after the OMB ruled the township could not make its bylaw retroactive.
Dam has made several requests to council in the past year about how it was going to handle the shortfall. Until now council has had the matter handled by a township lawyer. Council also managed to bring in a new bylaw after completing a study and holding a public meeting.
It was Dam who got the figure on how much money had been rebated through a Freedom of Information request.
CAO Mike Givens said the township received legal advice on how to deal with the shortfall, and council agreed to the advice prior to the media release issued on Sept. 13.
“The way we interpret the Development Charges Act we have the discretion,” Givens said, referring to the decision not to seek collection of the outstanding funds.
Givens said the issue was not dealt with at a regular council meeting because it did not require a bylaw for approval. He added the rebates and deferrals were previously covered under bylaws passed by council in 2011 and 2012.
“Any of the refunds or deferrals were based on the bylaws,” Givens said.
The new bylaw reduced the previous development charge on a single family home from $21,000 to about $14,000. The rate will rise to $14,672 by Jan. 1 next year before going to $15,344 on Jan. 1, 2015.
Development charges are established based on predicted growth and new water and sewer services required to handle new development.
Gary Scanlon of Watson & Associates Economists Ltd. presented the figures at a public meeting held at the municipal office on June 14.
Watson predicted there will be a growth of about 652 residential units in the next 10 years.
Mayor Ray Tout has always contended lowering the charges would spur development. It was one of the platforms in the 2010 campaign that saw him elected mayor.
The township provided in a News release four reasons it decided not to pursue collecting the development charge shortfall:
– “the individuals and businesses that paid development charges during the period in question did so in good faith. To go back to them now and insist on payment of additional charges would be unfair”;
– “collecting of underpayments would very likely result in court actions. These court actions would be costly and time consuming and would more than likely result in no real benefit to taxpayers”;
– “the current development charges bylaw and resulting charges reflects the current actual development charges reserve fund balances and the future growth related capital needs of the township. The township has taken the proper steps to secure the funds needed for the future”;
– “there is no legal precedent that the township is aware of that obligates the township to collect the total amount of development charges it has the ability to collect. The township has discretion and is choosing to use that discretion.”
The township press release concludes, “In the judgment of council and staff, this decision best serves the interests of the entire township and allows us to move ahead in a positive manner.
“We look forward to encouraging continued growth, prosperity and providing the best possible service to the residents of the Township of Wellington North in a fair and equitable manner.”
The township’s development charge fund, as of the end of 2012, was $1.3 million.
