It was a door that nobody really wanted to open on June 24 when county council refused to make a decision about development charges relief for two Mapleton businesses.
Councillor John Green told council his municipality has businesses seeking relief from the development charges levied by the county. He said his township council has gone as far as it can reducing its own fees.
Green said one industry is expanding and another needs a new building, and there was some threat that at least one might leave the community if it gets no relief from the $2.94 per square foot in industrial development charges levied by the county.
Green said he is asking for the chance of negotiations.
One is an agricultural-related business and the other is in furniture. He said the latter supplies wood and has been in the community for 30 years.
“Will the county negotiate similar to what is done at the local level?” Green asked.
He said one is a “fast growing company that wants a financial break” from the $64,000 development charge the county will levy on its expansion.
He added, “I have sympathy for the companies – and I have sympathy for the county.”
The problem with reduced development charges is the money must be made up somewhere else, and that means all other taxpayers have to pay to make up that reduction.
For councillor Mike Broomhead, the Mayor of Wellington North, the answer is easy.
He said his township is “way up there [with development charges] and people still seem to develop.” He said Wellington North has raised $500,000 in development fees, and he asked how the county would explain to those who paid the fees in his community why a neighbour is suddenly getting a big financial break.
“If you waive the fee at the county level, a lot of people will be upset in Wellington North,” Broomhead said, adding, “They’ll start the bonfires.”
In the east, the answer appeared to be similar.
Erin Mayor and county councillor Rod Finnie agreed with Broomhead.
“New development – it is substantially proven – does not pay for itself,” he said. “It consumes more” in municipal services than it pays in property taxes.
In fact, the province allowed the municipalities to charge development fees for the simple reason new development was taking advantage of all the services already paid for by local taxpayers, and it deemed that to be unfair.
Finnie said it is his experience everybody wants a break, and if the county wants to supply it, it should throw the fees out. He said realtors will tell people there are three rules for buying land: location, location, location.
“Wellington is a great place to live, work and play” and that is why industries “come here,” Finnie said. He added if a businesses cannot afford to pay development fees, “It’s not a viable business. The choice is to collect development charges or [property] taxes.”
Finnie said most businesses “would rather pay once” through development charges and get the cost out of the way than to be hit constantly with higher taxes to make up the difference as others take advantage of such breaks.
He said the $500,000 that Broomhead’s council has paid in Wellington North is money residents do not have to pay on their tax bills.
“I hope we don’t take this step,” Finnie concluded.
Councillor Lou Maieron said Wellington County is a big place and county council is due to reconsider its development charges soon. He said perhaps a sliding scale of fees might help those seeking more industry. He noted in Erin, 97% of the tax base is residential.
Green told council, “We’re building a lot of homes. A lot of neighbours are putting the emphasis on homes.”
The issue is neighbours outside of Wellington County have low industrial and commercial development charges, and some businesses move there to escape the development charges in the county.
Treasurer Craig Dyer said the county is due to start its next study on development charges late next year.
