HomeMy WebLinkAboutFND-012-08 AddendumClarJaG~tOn
&nergizing Ontario
REPORT
FINANCE DEPARTMENT
Meeting: COUNCIL
Date: MONDAY JUNE 9, 2008
Resolution #: C-~Sa-~D
Report#: ADDENDUM TO FND-012-08 File #: By-law #:0~00~-' JO~
Subject: DEVELOPMENT CHARGES AMENDMENT STUDY AND BY-LAW 2008
Recommendations:
It is respectfully recommended to Council the following:
THAT the Addendum Report to FND-012-08 be received;
2. THAT Report FND-012-08 be lifted from the table;
3. THAT the Development Charges Amendment Study, May 2008, prepared by
Hemson Consulting Ltd. be approved;
4. THAT the Development Charges quantum for Residential charge s be approved
as follows, subject to annual indexing:
July 1, 2008 Jan 1, 2009
Residential Single and Semi $13,012 $14,538
Townhouse and Row $11,353 $12,662
Large Apartment $ 8,907 $9,989
Small Apartment $ 5,651 $6,331
5. THAT the Development Charge quantum for both Non-Residential -Industrial
and Non-Residential -Excluding Industrial charges be phased-in for all units, as
follows, subject to annual indexing:
Non-Residential -Industrial
(per sq. m.)
Non-Residential -Excluding
Industrial (per sq. m.)
July 1, 2008 $26.89
July 1, 2009 $30.96
July 1, 2010 $35.03
July 1, 2008 $48.35
Jan 1, 2009 $55.16
July 1, 2009 $61.97
w`-
ADDENDUM TO REPORT FND-012-08
PAGE 2
6. THAT Council in approving the Amendment Study expresses its intent to ensure
that the increase in the need for services attributable to the anticipated
development will be met and that any future excess capacity identified in the
Study will be paid for by development charges or other suitable charges to
protect the public interest;
7. THAT Council has reviewed the changes made to the draft By-Law and after
having considered the changes, Council determined that there is not a need for
an additional public meeting;
8. THAT for completed applications as determined by the Chief Building Official
received on or before June 30, 2008, where the permit is issued and
development charges paid by September 12, 2008, that the applicable
development charges be calculated based on By-Law 2005-108, prior to the
amendment proposed as attached to this report;
9. THAT the attached By-Law (Attachment "A") be approved to amend By-Law
2005-108; and
10. THAT the Region of Durham and recorded interested parties be provided a copy
of this report and be notified of Council's decision.
Submitted by: Reviewed by:
cy ay r, B. ., C.A., Franklin Wu,
Director of FinancelTreasurer. Chief Administrative Officer.
NT/hj
ADDENDUM TO REPORT FND-012-08
PAGE 3
BACKGROUND AND INFORMATION:
1.0 The 2008 Development Charges Amendment Study
1.1 At the General Purpose and Administration Committee meeting of June 2, 2008,
Committee heard delegations at a statutory public meeting pertaining to the
proposed amendments to the existing 2005 development charges by-law.
1.2 Report FND-012-08 (Attachment B) was tabled for one week to allow the
comments made by the delegations to be considered and any changes
incorporated. Written communications received are attached to this report
(Attachment C, D, E, F, and G). No other communications were received at the
time of writing of this report.
1.3 As a result of the input received at the public meeting. Several changes are
being proposed.
2.0 Non-Residential Charge
2.1 Due to the greater price/cost sensitivity surrounding attracting industrial growth
as compared to other non-residential (i.e. commercial and institutional), a
phasing mechanism was recommended. It is recommended that the industrial
component be phased into the full rates over three increments whereby the full
charge would be effective July 1, 2010. No changes have been made to this
recommendation.
2.2 It was not originally recommended to include a phasing component for the other
non-residential (ie. Commercial and institutional). However, in light of the
comments and submissions received (Attachment D) as well as concerns over
the current economic environment, consideration has been given to a short-
term phasing recommendation. Incorporated in the revised By-law (Attachment
A) is a phasing mechanism for this category whereby one-third of the increase
is effective July 1, 2008, one-third effective January 1, 2009, and one-third
effective July 1, 2009. This still meets the objective of having the charge fully
implemented by July 1, 2009, but allows for somewhat more manageable
proportions as requested by the proponents.
2.3 Revised transitional provisions would also apply to the non-residential charge
as discussed subsequently in this report.
3.0 Residential Charge
3.1 The residential charge being recommended is now an increase of 46% over the
current charge (See proposed amendments in subsequent sections). Similar to
the commercial and institutional charge, originally no phasing provisions were
ADDENDUM TO REPORT FND-012-08
PAGE 4
recommended. Again, in light of economic circumstances and further
consideration of the proposals presented, both verbally and in writing
(Attachments C, E and G) a revised recommendation is provided in this
addendum.
3.2 The first consideration provided is an enhancement to the transitional
provisions. This will be explained in further detail below. In light of the
enhanced transitional provisions, aphase-in is being recommended. However
the enhanced transitional provisions will only apply to the July 1, 2008 phase -
in, not the second phase-in on January 1, 2009.
3.3 It is therefore recommended that two-thirds of the increase be effective July 1,
2008 and the final one-third on January 1, 2009.
4.0 Tax Impact
4.1 The existing taxpayer picks up any shortfall for the cost of growth related
services which is not collected through the development charge. The
Amendment Study has fully documented the shares of the capital program that
will not be funded from development charges. This will be addressed through
the annual budget process as projects come forward. Any impact of the
phase-in provisions is also an impact to taxpayers. As each project comes
forward during this time frame, a proportion that would otherwise have been
growth related will have to be funded from other municipal sources. However, it
is worthy of note that without proceeding with this amendment in advance of the
normal expiry of the by-law, there would also have been impacts to the
taxpayers.
5.0 Enhanced Transitional Provisions
5.1 The first effective date of change in the quantum is recommended as July 1,
2008. It is recommended that building permit applications that have been
submitted to the Chief Building Official on or before June 30 and are complete
in the opinion of the Chief Building Official where the permit is issued and
development charges paid by September 12, 2008, that the applicable
development charges be calculated based on By-Law 2005-108, prior to the
amendment proposed as attached to this report and therefore will not be
subject to the new amendment to the By-Law. The increase in the charge is
imposed at the time of issue of the building permit and so a specific resolution
has been added to this report.
5.1.1 For subsequent phase-in dates, for completed applications as determined by
the Chief Building Official received on or before the close of business on the
day preceeding the rate change according to the by-law, where the
development charges will be paid by the close of business on the preceeding
day, that the applicable development charges will be calculated based on the
ADDENDUM TO REPORT FND-012-08
PAGE 5
prevailing charge on the close of business on the day prior to the phase-in rate
increase.
6.0 Communication from IBI Group (Attachment F)
6.1 This section is a response to a submission received by the Municipality of
Clarington from Randy M. Grimes, of IBI Group, dated June 2nd, 2008. Mr.
Grimes's submission follows the release of the Municipality of Clarington
Development Charges Amendment Study, May 2008 and associated draft
development charges amendment by-law and a subsequent public meeting, held
on June 2nd, 2008 under the Development Charges Act, regarding proposed
Municipal development charges. The submission was made on behalf of the
Smooth Run Developments and Brookfield Homes (Ontario) Limited with respect
to their North Village project in Newcastle.
6.2 Issues and Responses
The following provides a response to the issues raised in the letter (Attachment
F). The responses follow the same order and numbering set out in the letter.
6.2.1 Cash Flow Financing Terms
The cash flow calculations undertaken in the background study are based on a
term borrowing rate of 6.5%, an interest earning rate of 4.5% and a general
inflation rate of 2.5%. The submission suggests that current borrowing rates are
lower and a more appropriate borrowing rate would be in the range of 5.0% to
5.5%.
The cash flow financing factors used in the 2008 Amendment Study are
consistent with the assumptions used in the Municipality's 2005 Development
Charges Background Study. The factors were established based on long-term
trends in interest rates. The difference between the different rate assumptions is
critical and yields effective real rates. The difference between the various rates
is consistent with the long-term pattern and relationship between financing rates
and inflation. Therefore adjusting one factor, the long term borrowing rate, would
require a review of the other factors as well.
It is recognized that current financing rates are at, or near, historic lows.
However, it is unclear how the rates will change over the coming months and
years. It is the general expectation that financing rates will not move lower but
are likely to experience some upward pressure.
Response:
The rates used in the 2008 Amendment Study are consistent with the
Municipality's 2005 Background Study and are supported by the long-term
ADDENDUM TO REPORT FND-012-08
PAGE 6
financing terms and conditions. However given the short-term life, no more than
two years, of the by-law and the current low interest rates, a sensitivity analysis
using lower financing has been undertaken. The cash flows, for all services,
have been adjusted using a 5.75% borrowing rate and a 4.0% earnings rate.
Making these changes results in a 1 % reduction in the residential rates ($143
per single detached unit), a 1.9% reduction in the non-residential commercial
rates ($1.21 per square metre) and a 0.75% reduction ($0.26 per square metre)
in the industrial rates. It is recommended that this change be incorporated.
6.2.2 Roads Costs
The IBI submission identifies concerns about the increase in the benchmark unit
costs in the roads costing from the 2005 to the 2008 Background Study. As
suggested in the IBI letter, the 2005 DC Study had a typo for the construction
cost of a 5 lane urban arterial road.
As part of the 2008 Amendment Study municipal staff, in conjunction with TSH,
reviewed all of the road construction benchmark costs based on tenders and
projects completed since 2005. The road construction unit costs used in the
2008 Amendment Study, and summarized Table A of the IBI letter, reflect this
analysis and the current road construction costs being experienced in Clarington.
The review indicated that the values shown in the 2005 Background Study were
understated for a number of road types.
No adjustment in the 2008 Amendment Study roads calculations is required.
6.2.3. South Courtice Arena Value
The submission raises a concern that the value of the South Courtice arena has
been significantly increased from the 2005 Background Study to the 2008
Amendment Study.
The South Courtice Arena has a floor area of 77,000 square feet and was valued
in the 2005 Background Study at $19.25 million or $250 per square foot. The
value was based on the cost of constructing the facility. The 2008 Amendment
Study has a value for the area of $23.1 million or $300 per square foot. The
revised cost estimate is based on the tender costs of the Newcastle Multi-Use
Facility currently under construction by the Municipality. If the Municipality was to
rebuild the South Courtice Arena in 2008, it is anticipated that the minimum
construction cost would be $300 per square foot.
The $10.1 million reference in the IBI letter is the remaining, as of January 1,
2008, principal portion of the debenture related to the original construction of the
ADDENDUM TO REPORT FND-012-08
PAGE 7
South Courtice Arena. The $10.1 million does not refer to the total original
construction cost of the facility.
No adjustment or changes are required.
6.2.4 Use of Gross Population in New Units
The 2008 Amendment Study utilizes population growth in new housing units as
the driver for determining the need to expand municipal servicing and the basis
over which to recover the residential growth-related costs.
The 2005 Background Study made allowance for capacity in municipal
infrastructure generated by the decline in the existing population base that would
be available to service a share of the population in new units. Experience in
Clarington, and other municipalities, has shown that this benefit has not accrued
to new growth and the Municipality has had to continue to add and expand
municipal infrastructure at levels equal to, or greater than, the ten year historic
service levels.
This is particularly true in Clarington as servicing three geographic urban centres
and numerous hamlets throughout a large rural area create many challenges.
The decline in population in one portion of the Municipality has not resulted in
infrastructure capacity being made available where it is required, namely where
growth is occurring.
6.2.5 Excess Capacity
The submission expresses concern that the Background Study does not fully and
appropriately deal with the issue of excess capacity. The methodology and
calculations in both the 2005 Background Study and the 2008 Amendment
Background Study fully and appropriately account for excess capacity.
Clarington does have, in the context of the Development Charges, excess
capacity in some services, most notably in the services of library and indoor
recreation. The excess capacity in these services is "committed" excess capacity
and at the time of creating the capacity (i.e. building the Bowmanville Library and
the South Courtice Arena) the Council of the day expressed the intent to recover
the eligible costs through future development charges.
An example of the treatment of excess capacity may provide some clarification.
Page 4 of Table 1 of Appendix B.3, Page 71, of the 2008 Amendment Study
displays the treatment of excess capacity for indoor recreation services. The
following is a summary of the calculations:
1. Ten Year (1998-2007) Historic Service Level $1,516.27/capita
ADDENDUM TO REPORT FND-012-08
PAGE 8
2. Population in New Housing Units (2008-2014) 22,269 persons
3. DC Maximum Allowable Funding (#1 x #2) $33.8 million
4. Current (2007) Inventory Value $128.8 million
5. Inventory Value at Historic Service Level $121.3 million
6. Excess Capacity (#4 - #5) $7.5 million
7. Maximum Allowable New Facilities (#3 - #6) $26.3 million
As shown above, there is indoor recreation excess capacity of $7.5 million. The
excess capacity relates to the South Courtice Arena and the Bowmanville Indoor
Recreation Facility. This is committed excess capacity and as permitted under
the Development Charge Act, the Municipality is recovering for this growth-
related cost under the calculations in the Amendment Study. The maximum
allowable, net of excess capacity, for the period 2008-2014, is $26.3 million and
the Municipality is permitted to recovery this level of monies for the provision of
indoor recreation facilities.
The 2008 Amendment Background Study provides for the recovery of $33.8
million in indoor recreation growth-related costs which includes a recovery of
committed excess capacity and for future growth-related capital expenditures.
6.2.6 Library and Indoor Recreation Cash Flow Adjustment
The library and indoor recreation cash-flow analysis have been adjusted to reflect
anticipated slow-down in the residential building permits. Funding for growth-
related library and indoor infrastructure is largely fixed, as facilities are
constructed as debentures are issued. As such, aslow-down in growth will result
in negative fiscal impacts to the Municipality. This sensitivity analysis has
resulted in minor (approximately 8 per cent) increase in the library and indoor
recreation charge.
The IBI submission is questioning the rational and appropriateness of this
adjustment.
Response:
The slowdown in the recent building permit activity in Clarington supports the
concern that the level of development activity anticipated in the 2005 and 2008
Background Studies will not be achieved and the type of adjustment to the library
and indoor recreation is warranted. However given the short-term life of the by-
ADDENDUM TO REPORT FND-012-08
PAGE 9
law and in response to the submission, a sensitivity analysis has been
undertaken.
Adjusting the library and indoor recreation cash flows to the same basis as the
other residential cash flows results in a 2.81 % reduction in the residential rates
($425 per single detached unit) but has no impact on the non-residential rates. It
is recommended that this change be incorporated.
6.3 The net effect of the two changes recommended above is to reduce the overall
residential charge for a single family dwelling to $14,538 from the original
proposal of $15,102. This reduces the proposed increase from the original 52%
to a revised increase of 46%. A similar effect will occur to the other dwelling
types. As library and indoor recreation have no impact upon the non-residential
component, the effect of the interest rate change will reduce the Industrial charge
to $35.03 from the original calculated value of $35.29 or an increase of 53.5%
rather than 55%. The other non-residential charge (commercial and institutional)
will change to $61.97 rather than $63.18 or an increase of 49% rather than 52%.
These changes are reflected in detail in the revised by-law (Attachment A).
7.0 Conclusions and Recommendations
7.1 In light of current economic concerns, the short life span of this amendment, and
the concerns expressed at the public meeting, four changes have been
recommended in this addendum report. Firstly, the interest rate on cost of
borrowing has been reduced. Secondly, the library and indoor recreation cash
flows have been revised to reflect the same basis as the other components.
Thirdly, additional phase-in recommendations have been incorporated. Finally,
enhanced transitional provisions have been recommended. All of these items
are reflected in the attached by-law and the recommendations to this report, as
applicable.
Attachments:
Attachment "A" -Proposed By-Law
Attachment "B" -FND-012-08
Attachment "C" -Letter from Wilmot Creek
Attachment "D" -Letter from Valiant Property Management
Attachment "E" -Letter from Durham Region Homebuilder's Association
Attachment "F" - Letter from IBI Group
Attachment "G"- Letter from the Kaitlin Group
ADDENDUM TO REPORT FND-012-08
PAGE 10
Interested Parties:
Region of Durham
Finance Department
60 Bond Street
Oshawa, Ontario L1 H 8B6
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 F (905)623-4169
Attachment"A"
THE CORPORATION OF THE MUNICIPALTTY OF CLARINGTON
BY-LAW NO. 2008-XXX
Being a by-law to amend Municipality of Clarington
Development Charge By-law No. 2005-108, as amended by By-
law No. 2007-195 and By-law 2006-160.
WHEREAS Subsection 2(1) of the Development Chazges Act, S.O. 1997, c.27 (the
"Act") provides [ha[ [he council of a municipality may by by-law impose development chazges
against land to pay for increased capital costs required because of increased needs for services
arising from the development of the azea [o which the by-law applies;
AND WHEREAS the Council of The Corporation of the Municipality of Clarington
enacted By-law No. 2005-108 - Being a By-law to impose development charges against land in
The Municipality of Claring[on pursuant to [he Development Chazges Act, 1997 for The
Corporation of the Municipality of Clarington. By-law No 2005-108 was amended by By-law
No. 2006-160 and by By-law No. 2007-195;
AND WHEREAS Council has before it a Background Study entitled "Development
Chazges Amendment Study, Municipality of Clazing[on" dated May, 2008 (the "Study");
AND WHEREAS Section 19 of [he Act provides for the process for an amendment to a
development chazge by-law, including the requirement that a public meeting ("Public Meeting")
beheld before an amendment is passed;
AND WHEREAS Council gave notice to the public of the Public Meeting and held the
Public Meeting pursuant to sections 12 and 19 of the Acton June 2, 2008, prior to which [he
Study and the proposed amending by-law were made available [o [he public, and Council heazd
comments and representation from all persons who applied to be heazd and considered Report
FND-012-08 dated June 2, 2008 (the "Staff Report");
AND WHEREAS staff of the Municipality considered the public comments and
representations made at the Public Meeting and at the meeting of Council held on June 9, 2008
submitted to Council Addendum Report to Report FND-012-08 dated June 9, 2008;
AND WHEREAS at its meeting on June 9, 2008, by Resolution No. C-XX~-08 Council
approved the recommendations contained in Report FND-012-08 and the Addendum thereto;
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE
MUNICIl'ALITY OF CLARINGTON ENACTS AS FOLLOWS:
L THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
"I"attached Urere[o and replacing it with a new Schedule "1" in the form and with
the content of Schedule "1" attached to and forming part ofthis by-law.
2. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
" 2" attached thereto and replacing it with a new Schedule " 2" in the form and with
the content of Schedule " 2" attached to and forming part of this by-law.
3. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
" 3" attached thereto and replacing i[ with a new Schedule " 3" in the forth and with
the content of Schedule " 3" attached [o and forming part of this by-law,
a. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
"a" attached thereto and replacing it with a new Schedule "a" in the form and with
the content of Schedule "a" attached to and forming part ofthis by-law.
5. This by-law comes into force and is effective on July 1, 2008.
By-law read a first and second time this 9`° of June 2008.
By-Law read a third time and finally passed this 9's of June 2008.
Jim Abernethy, Mayor
Patti L. Barrie, Municipal Clerk
Page 2
SCHEDULE "1"
RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "1" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
PHASING SCHEDULE BY EFFECTIVE DATE
RESIDENTIAL DEVELOPMENT CHARGES PER UNIT
July 1, 2008 January 1, 2009
Single and Semi-Detached $13,012 $14,538
Townhouse, Multiple and Row Units $11,353 $12,662
Apartments
Large $8,907 $9,989
Small $5,651 $6,331
SCHEDULE"2"
NON-RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "2" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
PHASING SCHEDULE BY EFFECTIVE DATE
NON-RESIDENTIAL DEVELOPMENT CHARGES PER
SQUARE METRE OF GROSS FLOOR AREA
July 1, 2008 January 1, 2009 July 1, 2009 July 1, 2010
Non-Residential (excluding Industrial) $48.35 $55.16 $61.97 $61.97
Industrial $26.89 $26.89 $30.96 $35.03
SCHEDULE"3"
ALLOCATION OF RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE"3" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
ALLOCATION OF RESIDENTIAL DEVELOPMENT CHARGES
Allocation
General Government 2.67%
Library Service 5.65%
Fire Protection Services 5.65%
Indoor Recreation 31.26%
Park Development and Related Facilities 9.92%
Operations (Buildings, Equipment and Fleet) 4.63%
Parking 0.36%
Transit n/a
Roads and Related 39.86%
Total Development Charge 100.00%
SCHEDULE "4"
ALLOCATION OF NON-RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "4" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
ALLOCATION OF NON-RESIDENTIAL DEVELOPMENT CHARGES
Allocation
Non-Residential
(excluding Industrial
industrial
General Government 3.03% 5.37%
Library Service n/a n/a
Fire Protection Services 6.42% 11.36%
Indoor Recreation n/a n/a
Park Development and Related Facilities n/a n/a
Operations (Buildings, Equipment and Fleet) 5.25% 9.28%
Parking 0.40% 0.71%
Transit n/a n/a
Roads and Related 84.90% 73.28%
Total Development Charge 100.00% 100.00%
ATTACHMENT "B"
~`~"lI~l~OII
Leading the Way
REPORT
FINANCE DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: MONDAY, JUNE 2, 2008 Resolution #:
Report #: FND-012-OS File #: By-law #:
Subject: DEVELOPMENT CHARGES AMENDMENT STUDY AND BY-LAW 20D8
Recommendations:
It is respectfully recommended the General Purpose and Administration Committee
recommend to Council the fallowing:
THAT the Development Charges Amendment Study, May 2008, prepared by
Hemson Consulting Ltd. he approved;
2. THAT the Development Charges quantum for Residential charges be approved
as follows, effective July 1, 2008, subject to annual indexing:
Residential Single and Semi $15,102
Townhouse and Row $13,153
Large Apartment $14,377
Small Apartment $ 6,577
3. THAT the Development Charge quantum for both Non-Residential -Industrial
and Non-Residential -Excluding Industrial charges be phased-in for all units, as
follows:
Non-Residential -Industrial July 1, 2008 $26.98
(per sq. m.) July 1, 2009 $31.14
July 1, 2010 $35.29
Non-Residential -Excluding July 1, 2008 $52.36
Industrial (per sq. m.) July 1, 2009 $63.18
REPORT FND-072-08
PAGE 2
4. THAT Council in approving the Amendment Study expresses its intent to ensure
that the increase in the need for services attributable to the anticipated
development will be met and that any future excess capacity identified in the
Study will be paid for by development charges or other suitable charges to
protect the public interest;
5. THAT Council has reviewed the changes made to the draft By-Law and after
having considered the changes, Council determined that there is not a need for
an additional public meeting;
6. THAT for completed applications as determined by the Chief Building Official
received on or before June 30, 2008, where the development charges will be
paid by June 30, 2008, that the applicable development charges be calculated
based on By-Law 2005-108, prior to the amendment proposed as attached to this
report;
7. THAT the attached By-Law (Attachment "A"), inclusive of any amendments made
by Council at the meeting of June 9, 2008, be recommended to Council for
approval to amend By-Law 2005-108; and
8. THAT the Region of Durham and recorded interested parties be provided a copy
of this report and be notified of Council's decision.
Submitted by: Reviewed b~.._.,` ~~- ~/mot
ancy T or, B. ., .A., Franklin Wu,
Director~f Finance/Treasurer. Chief Administrative Officer.
NT/hjl
REPORT FND-012-08
PAGE 3
BACKGROUND AND INFORMATION:
1.0 The 2005 Development Charges
1.1 On June 27ih• 2005, Council adopted the existing development charges with the
approval of report FND-007-05 and the accompanying By-Law 2005-108. This
By-Law, by statute expires after five years or June 30, 2010.
1.2 On March 315`, 2008, Report FND-007-OS pertaining to Fiscal Impact Analysis of
New Development was approved. During the course of this study, it was
determined that the Municipality's current development charges rates da not
adequately fund the growth related costs eligible for recovery through
development charges. Report FND-024-07 was approved December 10, 2007 to
authorize an interim review and amendment to the 2005 Development Charges
By-Law.
1.3 The legislation only allows calculation of a charge based on the historical
average service level of the past 10 years. The legislation does not permit the
use of development charges to increase the service levels in any category. If
the allowable permitted calculated charge under the legislation is not used, the
shortfall is transferred to the tax base and the historic average is eroded, such
that in future less development charges can be recoverable.
2.0 The 2008 Development Charges Amendment Study
2.1 Staff from all Departments and the Library worked diligently, as a Steering
Committee with Craig Binning of Hemson Consulting Ltd., to bring fornard the
amendment study May 2008. The result of the analysis was to produce a revised
development charge that reflects the costs of services required to support the
projected new development to 2014. The executive summary is attached
(Attachment "B"), with the full study circulated under separate cover on May 15,
2008.
2.2 The amendment study introduction provides an overview of the areas of focus
in this report. The focus of the study was limited to adjusting the development
charge rates to reflect the increased cost of servicing growth in Clarington.
3.0 Non-Residential Charge
3.1 In reviewing the non-residential development charges within the lakeshore area
municipalities of Durham Region, all lower tier municipalities have a commercial
and industrial development charge. The Region of Durham is currently in
process to update their rates and is proposing atwo-year phasing to the full rate
by July 1, 2010.
REPORT FND-072-08
PAGE 4
3.2 The cities of Pickering and Oshawa both have a standard charge for all non-
residential. Ajax and Whitby have separated industrial at a different rate than
the other non-residential components. This is the approach previously
undertaken in Clarington also.
3.3 Clarington's non-residential rate for Industrial is curcently at $22.82 per square
metre and the maximum permissible under the Amendment Study is $35.29 per
square metre or a 55% increase. The value for all other non-residential is
currently $44.54 per square metre moving to $63.18 per square metre or a 52%
increase.
3.4 Council has expressed thrcugh the Corporate Strategic Business Plan, 2007-
2010, aclear initiative to promote and attract non-residential activities to
Clarington. The Amendment Study, May 2008, is determined based on the
substantially increased costs for providing the capital program required to
accommodate growth. However, due to the significant effect this may have on
Council's priority to attract the non-residential sector, it is proposed that a
phasing mechanism be employed.
3.5 Due to the greater price/cost sensitiv'~ty surrounding attracting industrial growth
as compared to other non-residential (i.e. commercial and institutional), a
different phasing mechanism is recommended. It is recommended that the
industrial component be phased into the full races over three increments
whereby the full charge would be effective July 1, 2010. For other non-
residential development, the full charge would be effective by July 1, 2009.
This is reflected in Schedule 2 to the proposed By-Law.
4.0 Residential Charge
4.1 The residential charge being recommended is an increase of 52% over the
current charge.
5.0 Taz Impact
5.1 The existing taxpayer picks up any shortfall for the cost of growth related
services which is not collected through the development charge. The
Amendment Study has fully documented the shares of the capital program that
will not be funded from development charges. This will be addressed through
the annual budget process as projects come forward.
6.0 Meeting with Developers
6.1 Staff and the Municipality's consultant met with the development community on
May 22"d to provide an overview of the amendment study, the methodology
applied in the development charge calculation and to provide an opportunity for
questions to be answered. The meeting was setup over and above the
requirements of the Development Charges Act and in addition to the scheduled
public meeting for June 2, 2008.
REPORT FND-012-08 PAGE 5
7.0 Exemption Where Permits Applied For
7.1 The effective date of change in the quantum is recommended as Juiy 1, 2008.
It is recommended that building permit applications that have been submitted to
the Chief Building Official on or before June 30 and are complete will not be
subject to the new amendment to the By-Law. The increase in the charge is
imposed at the time of issue of the building permit and so a specific resolution
has been added to this report.
Attachments:
Attachment "A" -Proposed By-Law
Attachment "B" -Development Charges Amendment Study - Executive Summary
Interested Parties:
Region of Durham
Finance Department
60 Bond Street
Oshawa, Ontario L1H 8B6
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 F {905)623-4169
Attachment "A"
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
BY-LAW N0.2008-XXX
Being a by-law to amend Municipality of Clarington
Development Charge By-law No. 2005-k08, as amended by By-
law No. 2007-195 and By-law 2006-160.
WHEREAS Subsection 2(I) of [he Development Chazges Act, S.O. 1997, c.27 (the
"Act")provides that the council of a municipality may by by-law impose development charges
against land to pay for increased capital costs required because of increased needs for services
arising from the development of the area to wMch the by-law applies;
AND WHEREAS the Council of The Corporation of the Municipality of Clarington
enacted By-law No. 2005-108 - Heing a By-law to impose developmrnt charges against land in
The Municipality of Clarington pursuant to the Development Charges Act, 1997 for The
Corporation of the Municipality of Claring[on. By-law No 2005-108 was amended by By-law
No. 2006-160 and by By-law No. 2007-195;
AND WHEREAS Council has before it a Background Study entitled "Development
Charges Amendment Study, Municipality of Claringtan" dated May, 2008 (the "Study");
AND WHEREAS Section 19 of the Act provides for the process for an amendment to a
developmrnt charge by-law, including the requirement that a public meeting ("Public Meeting's
beheld before an amendment is passed;
AND WHEREAS Council gave notice to the public of the Public Meetiug and held the
Public Mceting pursuant to sections 12 and 19 of the Acton June 2, 2008, prior to which the
Study and the proposed amending by-law were made available to Ote public, and Council heard
comments and representation from all persons who applied to be heard attd considered Report
FND-012-08 dated June 2, 2008 (the "StaH'Report'~;
AND WHEREAS staff of the Municipality considered the public cammmts and
representations made at the Public Meeting at the meeting of Council held on June 9, 2008 and
submitted to Council Addendum Report to Report FND-Olt-O8 dated June 2, 2008;
AND WHEREAS at its meeting on June 9, 2008, by Resolution No. C-XXX-08 Council
approved the recommendations contained in Repoli FND-012-DS and the Addendum thereto;
NO W THEREFORE THE COUNCIL OF THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON ENACTS AS FOLLOWS:
1. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
"l" attached thereto and replacing it with a new Schedule "1" in the form and with
the content of Schedule "1"attached to and forming part of this by-law.
2. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
'7" attached thereto and replacing it with a new Schedule `7" in tht form and with
the content of Schedule "2" attached to and fomting part of thin by-taw.
3. THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
" 3" attached thereto and replacing it with a new Schedule " 3" in the form and with
the content of Schedule " 3" attached to and forming part ofthis by-law.
4. THAT By-law No.2005-108,as amended, is further amended by deleting Schedule
"4" attached thereto and replacing it with a new Schedule "4" in fhe fotm and with
the content of Schedule "4" attached to and fomting part of this by-law.
5. This 6y-law comes into force and is effective on July 1, 2008.
By-law read a first and second time this 9'" of June 2008.
By-Law read a thins time and finally passed this 9`" of June 2008.
Jim Abernethy, Mayor
Patti L. Barrie, Municipal Clerk
Pagc 2
SCHEDULE "1"
RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "1" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
RESIDENTIAL DEVELOPMENT CHARGES PER UNIT
Single and Semi-Detached $15,102
Townhouse, Multiple and Row Units $13,153
Apartments
Large $10,377
Small $8,577
SCHEDULE"2"
NON-RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE"2" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
PHASING SCHEDULE BY EFFECTIVE DATE
NON-RESIDENTIAL DEVELOPMENT CHARGES PER
SQUARE METRE OF GROSS FLOOR AREA
July 1, 2008 July 1, 2009 July 1, 2010
Non-Residential (excluding Industrial) $52.36 $63.18 $63.18
Industrial $26.98 $31.14 $35.29
SCHEDULE"3"
ALLOCATION OF RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE"3" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2008-XXX
ALLOCATION OF RESIDENTIAL DEVELOPMENT CHARGES
Allocation
General Government 2.57%
Library Service 5.89%
Fire Protection Services 5.44%
Indoor Recreation 32.70%
Park Development and Related Facilities 9.50%
Operations (Buildings, Equipment and Fleet) 4.43%
Parking 0.35%
Transit n/a
Roads and Related 39.12%
Total Development Charge 100%
SCHEDULE "4"
ALLOCATION OF NON-RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "4" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2D08-XXX
ALLOCATION OF NON-RESIDENTIAL DEVELOPMENT CHARGES
Allocation
Non-Residential
{excluding Industrial
industrial
General Government 2.96% 5.30%
Library Service n!a n/a
Fire Protection Services 6.28°~ 11.25%
Indoor Recreation n/a Na
Park Development and Related Facilities n/a Na
Operations (Buildings, Equipment and Fleet) 5.11% 9.15%
Parking 0.40% 0.71%
Transit n/a n!a
Roads and Related 85.25% 73.59%
Total Development Charge 10D% iD0°k
Attachment "S"
DEVELOPMENT CHARGES
AMENDMENT STUDY
Municipality of Clarington
HEMSONConsulting Ltd
May 2008
EXECUTIVE SUMMARY
Hemson Consulting Ltd. was retained by the Municipality of Clarington to complete a
Development Charges Amendment Study. This Amendment Study provides the basis
and background [o update the Municipality's development charges to accurately
reflect the servicing needs and fully recover the increasing costs related to servicing
growth in Clarington.
A. BACKGROUND AND INTRODUCTION
• In February 2008, a Study of the Fiscal Impact Analysis of New Development
in Clarington was completed. The Study examined the effects of allowing
several large scale residential proposals [o proceed earlier than was anticipated
under the Municipality's 2005 Development Charges Background Study.
• The results of the Fiscal Impact Analysis show that the Municipality's current
development charge rates do not adequately fund the growth-related costs
eligible for recovery through development charges. The most significant
funding shortages are with respect to the provision of roads and related
infrastructure.
• A key recommendation of the Fiscal Impact Analysis was that current
development charge rates be reviewed immediately and that new rates be
established to more fully recover the cost of servicing growth in the
Municipality. Following this recommendation, this 2008 Development
Charges Amendment Study was initiated in February 2008.
• The Amendment Study provides the basis for amending Clarington's current
development charges by-law, By-law No. 2005-108, as permitted under section
19 of the Development Charges Act (DCA).
• The focus of the Amendment Study is limited to adjusting the development
charge rates to reflect the increased cost of servicing growth in Clarington.
HEMSON
• The growth forecast for the Amendment Study is consistent with the growth
forecast of the 2005 Development Charges Background Study and has been
adjusted to account for growth that has occurred since the completion of that
Study and data released from the 2006 Census.
• The end date of the planning periods in the Amendment Study remains
consistent with the 2005 Development Charges Background Study. The
proposed planning periods for this Amendment Study are aseven-year period
from 1008 to 2014 for the general services and 2008 to 2031 for the engineered
services. Historic service levels are based on the ten-year historical period from
1998 to 2007.
• This study calculates new development charges for the Municipality of
Clarington in compliance with the provisions of the DCA.
• The Municipality needs to continue implementing development chazges to
fund capital projects related to growth throughout Clarington so that
development continues to be serviced in a fiscally responsible manner. The
calculated changes to the development charges rates are required in order to
reflect the revised costs associated with the infrastructure requirements.
• This report identifies the growth-related net capital costs which are
attributable to development that is forecast to occur in the Municipality.
These costs are apportioned to types of development (residential, non-
residential) in a manner that reflects the increase in the need for each service
attributable to each type of development. This report therefore presents
developmenr charges for each type of development.
B. ELIGI8LE SERVICES ARE INCLUDED IN THE ANALYSIS
• The following Municipal services have been included in the development
charges analysis:
^ Public Librazy
^ Emergency Services
• Indoor Recreation
HEMSON
• Engineering -Park Development and Facilities
• Operations
^ Parking
• General Government
^ Roads and Related (including storm drainage, sidewalks, street lights,
streetscapes, intersection and level crossings, etc.)
C. THE MUNICIPALITY HAS AN EXTENSIVE GROWTH-RELATED CAPITAL
PROGRAM FOR THE PROVISION OF ELIGIBLE SERVICES
General Services 2008 - 2014
• Municipal staff, in collaboration with Hemson Consulting, has developed a
growth-related capital program setting out projects that are required to service
the anticipated growth. The growth-related capital programs are based on a
seven-year planning period of 2008 to 2014.
• The gross cost of the Municipality's growth-related capital program for general
services amounts to $93.3 million and provides for a wide range of
infrastructure expansions. A government grant of $2.2 million for the public
library has been identified, and thus the net cost of the growth-related capital
program is $91.1 million. Of the $91.1 million, approximately $62.2 million
has been identified as eligible for recovery through development charges over
the 2008 - 2014 planning period.
HEMSON
IV
• The following is a summary of the growth-related capital program for the
general services:
Service Ca ital Forecast
~ Gross 3ullaldles/
Cast Raeovarlss
Sooo sooD
Nat
Cast
sgoo DC
Recovanbb
2006.2014
saoo
1.00 TOTAL • PUBLIC LIBRARY 510,485.0 52,244A 58,220.8 $5,331.3
1.1 Buildings, Lantl 8 Furnishings $9,865.0 $2,244.4 $7,620.6
1.2 Material Acquisitions $600.D $0.0 $600.0
2.00 TOTAL-EMERGENCY SERVICES 511,872.0 50.0 511,872.0 57,076.9
2.1 Buildings, Land 8 Furnishings $10,280.0 $0.0 $10,260.0
z.z venidea a1,5oD.o so.o st5oo.a
2.3 Firefighter Equipment 5112.0 $D.0 5112.0
3.00 TOTAL •INDOOR RECREATION 541,089.0 ;0.0 $41,069.0 530,388.9
3.1 Buildings, Land, Fumishings 8 Equipment $41,069.0 $0.0 $41,069.0
4.OD TOTAL • ENGINEERING -PARK DEVELOPMENT AND FACILiI'lES ;17,090.0 50.0 517,090.0 ;9,927.1
4.1 Park Development, Facilities 8 Equipment $17,090.D $0.0 $17,090.0
5.00 TOTAL -OPERATIONS 56,619.4 50.0 58,619.4 ;5,774.0
5.1 Buildings. Land 8 Equipment $5,179.5 50.0 $5,179.5
5.2 MuniGpal Fteet 53,438.9 50.0 $3,439.9
6.00 70TA1. • PARKING 5818.1 50.0 5518.1 5432.9
6.1 New Parking Spaces $518.1 $D.0 $518.1
7.00 TOTAL-GENERAL GOVERNMENT 53,680.0 ;0.0 53.680.0 53,312.0
7.1 Gmwth Studies 53,680.0 50.0 $3,860.0
TOTAL-7 YEAR GENERAL SERVICES 593,313.5 52,244A 591,089.1 582,243.2
• Details regazding the capital programs for each of the general services aze
provided in Appendix B of this report.
HEMSON
V
Engineered Services 2008 - 2031
• The growth-related capital program for roads and related services is based on a
build-out planning period of 2008 to 2031.
• 1"he Municipality's growth-related capital program for roads and related
services amounts to a gross cost of $153.1 million and provides for roads
construction, storm drainage, sidewalk, street lights, streetscapes and other
related works. No government grants have been identified, and thus the net
cost of the growth-related capital program remains at $153.1 million. Of the
$153.1 million, approximately $133.6 million has been identified as eligible for
rewvery through development charges.
• The following is a summary of the growth-related capital program for the roads
and related services:
Ca ital Forecast DC
Gross Subsidies! Net Rewverebls
Service Cost Recoveries Cost 2006-2014
5000 $000 $000 5000
1.00 TOTAL -ROADS AND RELATED 5153,058.4 50.0 5153,0584 8'133,593.0
1,1 Roads 3 Related Proiecta $150,961.8 $0.0 $150.961.8
1.2 Ottier Road Related Prgeds $2,096.6 $0.0 $2,096.6
TOTAL • ENGINEERED SERVICES 5153,058.4 50.0 5153,058.4 $133 593.0
• Details regarding the capital programs for the roads and related services aze
provided in Appendix C of this report.
HEMSON
VI
D. DEVELOPMENT CHARGES RATES CALCULATED WITH FULL REFERENCE TO
THE DCA
• Development charges rates have been established under the parameters and
limitations of the DCA. This study provides the rationale and basis for the
calculated rates.
• A Municipality-wide uniform cost approach is used to calculate development
charges for the eligible services. This results in uniform residential and non-
residential charges throughout the Municipality.
• The calculated chazges are the maximum charges the Municipality may adopt.
Lower charges can be approved; however this will require a reduction in the
capital plan and reduced service levels or financing from other sources, most
likely through property tax increases.
• It should be noted that the capital programs put forward for Operations and
Parking have not fully utilized the maximum allowable funding envelope.
• The fully calculated residential chazges aze recommended to vary by unit type,
reflecting the difference in occupancy patterns expected in various unit types
and the associated differences in demand that would be placed on Municipal
services.
• The fully calculated non-residential charges are recommended to be applied on
a Municipal-wide basis. This study has differentiated anon-residential charge
for the roads and related component, remaining consistent with the currently
imposed non-residential charges. The charge is differentiated between
industrial and all other non-residential land uses (commercial, institutional).
HEMSON
vii
• Based on the Municipality of Clarington's growth forecast and growth-related
capital programs, new residential development charges rates have been
calculated. The following is a summary of the calculated residential
development charges by unit type:
Calculated
Char
e Char e6 Unit e 1
g
SERVICE Alter Rows 3
Cashflow SingleaS Other Larga Small
Per Ca ita ~ Semis Multi les artments A artmanfa
PUBLIC LIBRARY §287 $890 $775 $611 $387
EMERGENCY SERVICES $Z65 $822 $716 $564 $358
INDOOR RECREATION $1,593 $4,938 $4,301 $3,393 $2,151
ENGINEERING-PARK $463 $1,435 $1,250 $986 $625
DEYELOPMENTAND
FACILITIES
OPERATIONS $216 $670 $683 $460 $292
PARKING §17 $53 $46 $36 $23
GENERAL GOVERNMENT $125 $388 $338 $266 $169
SUB-TOTAL GENERAL 52,966 $9,195 $8,008 $8,318 $4,004
SERVICES
MUNICIPALITY-WIDE $1,906 $5,908 §5,145 $4
059 $2
573
ENGINEERING SERVICES , ,
SUB-TOTAL ENGINEERING $1,906 $5,908 $5,145 $4,059 §2,573
SERVICES
TOTAL RESIDENTIAL $4,872 $15,102 §13,153 §10,377 $8,577
CHARGE PER UNIT
(1) Based on Persona Par Unit O(; 3.1 D 2.70 2.73 1.35
HEMSON
viii
• Based on the ivlunicipality of Clarington's growth forecast and growth-related
capital programs, new non-residential development charges rates have been
calculated. The fallowing is a summary of the calculated non-residential
development charges:.
Commercial 8 I nd ualrial
Institutional
SERVICE Affar Cashflow After CaahBow
Par Square Metre Par Square Metre
PUBLIC LIBRARY $0.00 $0.00
EMERGENCY SERVICES $3.97 $3.97
INDOOR RECREATION $0.00 $0.00
ENGINEERING -PARK DEVELOPMENT AND FACILITIES $0.00 $0.00
OPERATIONS $3.23 $3.23
PARKING $0.25 $0.25
GENERAL GOVERNMENT $1.67 $1.67
SUH-TOTAL GENERAL SERVICES $9.32 $9.32
MUNICIPALITY-WIDE ENGINEERING SERVICES $53.86 $25.97
SUB-TOTAL ENGINEERING SERVICES $53.66 $25.97
TOTAL NON-RESIDENTU\L CHARGE PER SO.M 563.'16 $3529
HEMSON
ix
E. NEWLY CALCULATED RATES ARE 50% HIGHER THAN CURRENT RATES
• The fully calculated Municipality-wide residential charge fora single~semi-
detached unit, $15,102, represents an increase of 52% over the Municipality's
current charge, $9,961.
• The $63.18 per square metre of gross floor area represents a 52% increase over
the Municipality's current non-residential commercial and institutional charge
of $41.54 per square metre. The newly calculated non-residential industrial
charge is $35.29 per square metre, which is a 55% increase over the current
charge of $22.82 per square metre of gross floor azea.
• The scale of these increases is consistent with the experience of many
municipalities in Southern Ontario as the development charge inflation index
has outpaced inflation and resulted in rapid increases in construction costs.
• The calculated development chazges rates are increasing in the Municipality of
Clarington largely as a result of significant increases in the costs of
constructing municipal infrasttucture.
F. THIS AMENDMENT IS NOT PROPOSING ANY CHANGES TO DEVELOPMENT
CHARGE POLICIES AND PRACTICES
• The scope of this amendment is limited to a review of the cost of servicing
growth in Clarington.
• The proposed amending by-law does not alter any of the terms of the by-law
and all existing rules, exemptions and other provisions will remain unchanged.
• The expiry date of the by-law, June 30, 2010, is not altered by the proposed
amendment,
HEMSON
~: ~ ~;
#Gn
#~
1
®in'
WILMOT
CREEK
27 May 2008
Via Mail & Fax: 905-623-4169
Ms. Nancy Taylor
Director of Finance
THE MUNICH'ALITY OF CLARINGTON
40 Temperance Street
Bowmanville, Ontario L1C 3A6
Re: Development Charges
Dear Nancy:
Total # of Pages: (1 )
First, we would like to thank you for including us in the Developers' Workshop for the development
charges.
Our comment is related to a matter that was brought up at the meeting by another builder. We presently
have 12-14 sales that we are committed to and these sales had anticipated a cost reflecting the existing
development charge.
If possible, we would like agreements entered into prior to July 1, 2008 or even June 1, 2008 to be
`'grand-fathered" and be required to pay the existing development charge. As a fallback position, if
building permits have been applied for prior to July 1, 2008, then the development charge at the time of
application be applied and not the new rate.
We recognize the difficulty that the Municipality faces in providing the services for new residents and
paying for those services. We are, however, faced with a similar problem in that we are being asked to
bear a cost on homes that we have already entered into an agreement with the purchasers on.
We would appreciate the Municipality's undertaking and co-operation in this regard.
Yours truly,
RIDGE PINE PARK INC.
_, ~
David W. Rice
DWR:fc/F,wnmo~„M~~a~mg~o~~g°~[ieelhouse Drive, Unit 1, Newcastle, Ontario L1B 1B9
Toronto Direct (416) 369-0000 Administration (905) 697-5805 Sales (905) 697-5806 Fax (905) 097-2501
ATTACHMENT "C"
~4L~l~~
JuN o z zoos ~J
MONICIPA~ITY OF CLARING70N
fINgNCE
www.anewbe~inning.ca
05-30-'08 13;09 FROM-PAN Group/Halloway
May 29, 2008
Mayor7im Abernathy
Members of Clarington Councii
40 Temperance Street
Clarington, Ontario
L1C 3A6
905-579-
ATTACHMENT"D"
IiUIT,DII~IG COR YOtJ S1A'CE 1922
Re: CCartnglon Commereirtt Development Clberge-Increase of SZ%
I respectfully request you reconsider this extraordinary jump in the non-residential charge.
In our negotiations with prospective tenants we had expected the usual 6-~% construction cost index
increase for January T", 2009 not ten. times that much. Our current and future commercial tenants
simply cannot afford [o pay these proposed fee increases, because their business is slowing down.
Your timing could not be worse in this current economic cycle. Currently four of our five Shopping
Centres across Durham Region have empty units for rent, with a combined square footage in excess of
36,600 sq. ft, vacant. Townline and Claringtoa Centre account for over 25,000 sq. ft. of this total.
The amounts of revenue Clarington will receive, may at first be close to your expectations. Tlowever,
after the cumnt deals are fiaali2ed, T can only mothbalt future developments. Commercial tertts are on a
rapid decline because of so much retail being built in Durham Region and because business in Ontario is
slacking off generally.
I respectfully request Claiington Council consider as increase of 15% as of July 1`~ and quarterly
thereafter of 12% for the next year (as a phase-in). 1 firmly believe increases in mane,geabie proportions
will earn Clarington more than huge increases at one fell swoop which will curtail retail business.
Yours true ly~~~
~~
Robert Tfiatm
President
RFl:kd
_.___....._.---q •----rx---_.-...__..__ ----~_. .__._._.._
17/Non uon Road, 20 Moor. Oshawa, Ontario t.1G 3S2
7e1: 905.579-161.6
Fax:905-579.947?.
E-rnaif: velianlprpporlyy~rat8rs.rAm
Durham
Region ATTACHMENT "E"
Home Builders'
Association
May 30, 2008
King Street Postal Outlet
P.O. Box 26064
206 King Street East,
Oshawa, Ontario L1 H 1 CO
Tel. (905) 579-8080
Fax (905) 579-8080
Mayor Jim Abernathy
Members of Clarington Council
Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
LIC 3A6
Re: Proposed Development Charge By-Law 2008 -July Is`
The Durham Region Home Builders Association is continuing its review and analysis of
the proposed development charges by-law. While we cannot provide comment
specifically on the quantum adjustments at this time, we can offer the following for
consideration by the General Purpose and Administration Committee.
DRHBA suggests that Staff and Council consider implementing aPhase-In option for
50% of the proposed increase ($2,570) effective July 1S`. The remaining 50% be
implemented Jan 1st, 2009. This would coincide with the annual indexing as specified in
your current D.C. By-Law.
In addition, DRHBA is recommending Staff and Council consider implementing a
Transition provision as follows. All complete Building permit applications,.
corresponding fees and documentation meeting the submission requirements set by the
Chief Building Official, that are dated and received prior to July 1St and that are processed
on or before August IS`, be subject to the Development Charge rates in effect at that time.
Finally, DRHB supports and recommends a graduated phase-in of the Non-Residential
increase of $21.64 per sq. m or (+52%). Increases of this magnitude without aphase-in
would cause a considerable drop in retail business.
We appreciate the open dialogue and information exchange with staff to date and look
forward to additional discussions prior to By-Law implementation.
Sincerely,
Wayne Clarke
Chair of Legislative Affairs Committee
DRHBA
www.drhba.com
/~C ffacstC /eClolL
ATTACHMENT "F"
IBI
CROUP
June 2, 2008
Ms. Nancy Taylor
Director of Finance(Treasurer
The Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Dear Ms. Taylor:
Proposed 2008 Clarington DC Sy-law Amendment
I was asked by Council to put in writing my comments at the June 2, 2008 public meeting. IBI Group
represents Smooth Run Developments and Brookfield Homes (Ontario) Limited with respect to their North
Village project in Newcastle.
As noted, some of these issues were raised at the DC workshop and the others are new points that we
discovered subsequent to the workshop.
Clarington should utilize for the calculation of the charge (cash flow adjustment) a financing rate for
any negative balances based on its current cost of borrowing which we believe is closer to 5°/a to
5.5% rather than the 6.5% used in the background study.
2. As indicated on the attached table, with respect to the historical level of service for roads, there is
signifcant cost increases when comparing the 2008 DC Background Study to the 2005 Background
Study. While we acknowledge that costs have increased since 2005, some of these cost increases
seem to be particularly high and we would ask for clarification on the cost increases for the roads.
As we noted, it may be that the cost increase for the 5 lane urban arterial may have been a typo in
the 2005 study but perhaps you could clarify this.
As we indicated at the presentation to Council, while the calculated maximum allowable for roads is
greater than the proposed road program, these costs may then have used to generate the road
program. This should be reviewed in terms of the road capital program included in the Background
Study.
3. As we noted at the workshop, the new historical level for the Courtice arena is now $300/sq. ft.
which would place the total cost of the arena at over $23 million (77,000 sq. ft. x $300 per sq ft.)
plus the cost of land, furnishing and equipment which is more than 2x what appears to be the
original cost of the arena ($10.1 million) as shown on Page 72 of the background study. You
suggested at the workshop this may be because the total cost of the arena is not as indicated.
Perhaps you could clarify this and provide some supporting documentation for the cost of the
Courtice arena.
4. As we pointed out, Hemson seems to have changed their approach from 2005 study and is now
using the gross population in new units for the 7 year period (22,269 population) whereas in the
2005 study and in previous background studies provided by Hemson they have always used net
population growth to calculate the maximum allowable amount. As we indicated this has a
230 Richmond Street West, 5th Floor, Toronto, Ontario, Canada MSV 7V6 (416) 596-1930, FAX (416) 596-0644
IBI is a group of companies providing professional services and is affiliated with IBI Group Architects.
Nla. Nancy Taylor -2 - June 2, 2008
signifcant impact particularly for the soft services. We would appreciate an explanation as to why
this is done and the justification for this new approach which would seem to disregard capacity
freed up by decreasing population in existing units.
5. From our reading both the 2005 or 2008 background study, excess capacity does not appear to
have been taken into account (where the latest year inventory is above the 10 year historical level),
Hemson has typically subtracted that excess amount as a excess capacity adjustment. Because
this does not appear to be the case in either the 2005 and 2008 study, some rationale for this
approach would be appreciated.
6. Finally, we note that for that the cashflow adjustment, the population in new units in the case of
indoor recreation and public libraries seems to be adjusted downward by 10%. We are not sure
why this was done as it serves to impact the required cashflow adjustment upward. Please provide
an explanation as to why this was done.
We will suggest as a result of some or all of the above comments the DC quantum should be adjusted
downward.
We do very much appreciate the cooperation shown by you, the rest of Clarington staff and your
consultants.
Yours truly,
IBI GROUP
J
lC~"'~~
Randy M. Grimes
Director
RMG/dd
attch.
cc: Patti Barrie, Clerk
Peter Schut
Bruce Fischer
Cynthia Bird
Thomas Albani
Reg Webster
Bryce Jordan
Roslyn Houser
Rob Howe
Craig Binning
Kelvin Whalen
Paula Tenuta
Ja10W9t22 Correo-ExlemallPTUaylor-Garington200B-W-02.tloc@OO&08-031DD
Lanes
2
2
2
3
4
2
3
4
5
Table A
Municipality of Clarington
Comparison of Road Costs
ROADS
Value
er Km Change
In 2005 DC In 2008 DC
Rural Collector $56Q,000 $67Q,000 20%
Semi-Urban Collector $880,000 $1,730,000 97%
Urban Collector $1,190,000 $2,500,000 110%
Urban Collector $1,380,OD0 $2,660,000 93%
Urban Collector $1,560,000 $2,89Q,ODD 85%
Semi-Urban Arterial $1,130,000 $1,340,000 l9%
Urban Arterial $I,SOQ000 $2,800,000 87%
Urban Arterial $1,690,000 $3,030,000 79%
Urban Arterial $560,000 $3,450,000 516%
PCSn newcastle_comparison_20D7-OS-29
I V I
GROUP
Page 1
6/3/2008
JUN-84-08 11:52At7 FROtI-KAITLIN GROUP
ATTACHMENT"G"
7Fe ~titCtn Group Ltd. - - - -
1029 McNicoll Avrnme
Scerbor°ugh,0etari° M1W3W6
Tcleppona (416) 4957050 Fax (41 t7 495.8620
June 3, 2008 hepllwww.keidingroup.c°m
e-mail: info®kaiuiagroup.com
Mayor James Abernethy ~~~~j j~~~
The Municipality of Clarington ~~,11
40 Temperance Street
Bowmanville, Ontario ~ JUN O 4 2008
L1C 3A6
MUNICI?AiITY OF CIARINGTON
Dear Mayor Abemethy FINANCE
Re: Staff ReportFND-012-OS
Proposed Development Charges By-Law
Further to my presentation at the public meeting for the proposed amendment to tho
Municipality's Development Charges by-law, I offer the following comments for Council's
consideration;
The background report, prepared by J3emson Consulting, and released May 12, 2008
indicates a potential maximum charge increase of approximately 52°/a from the current
rates for various residential housing forms. These current rates were originally
established when the current by-law was enacted in July 2005. Staft'report FND-012-08
suggests that the new rates, wide their full increase, would came into effect for any
building permits issued after July 1, 2008.
The magnitude of this increase, coming only partway through the lifetime of the current
by-law, coupled with similar increases being concurrently introduced at the Regional
level, cause great concern to ourselves and other builders in the Municipaliiy.
Clarington's principal atu~action to new home buyers, in addition to its quality of life,
stems from the relative affordability and choice of housing accommodation. In this
regard, there is greater sensitivity to price increases in Clarington than hr many other
municipalities shunted in closer proximity to Toronto. In other words, the effect of price
increases on housing demand tends to be more acute in Clariagton than most other GTA
municipalities.
- Purthermaro, in consideration of other regional factors including employment
uncertainties and increased energy and fuel costs, the Municipality should exercise
extreme caution in consideration of any aetioas that could contribute fur[her dis-
incentives to the health and affordability of its housing stock.
Applying the full value of the charge immediately, presents an unfair and unreasonable
hardship upon local builders who have already entered into binding Purchase and Sale
agreements, but who may not be in a position to obtain their building permit by July 1,
2008. The nature of the business is such that financial institutioas often require pre-sale
levels to be achieved, prior to project funding being made available. This means that a
builder often needs to stet marketing wall in advance of building permit issuance.
../2
UUN-04-03 11:53AL1 FROM-KAITLIN GROUP
_2.
i-056 P.003/003 F-167
- Onco entered into, those purchase and sale agreements fix the final retail price -the
increased development charges are not assignable to the purchaser -nor should they be.
In fairness, and particulazly since the Municipality has chosen to amend their by-law well
before its current term should have ended, it behooves Council to entertain aphase-in of
the charge to allow the increases to gradually absorb into the market pricing.
Jn consideration of the above, it is our suhraission that Council should consider aphase-
in of the new cha[ge as follows;
0 1/3 of the increase effective July 1, 2008
o a further 1/3 of the increase effective January 1, 2009 and
o the final 1/3 of the increase effective July 1, 2009.
- A further benefit of this approach is that should subsequent review and analysis of the
background study, as has been suggested by other parties ,result in the need to refine the
charge quantum, such adjustments could be made coincident with the milestone dates
shove,
I appreciate the opportunity to offer these comments to Council and would be pleased to discuss
thetn further, or elaborate on the rationale applied, if so requested.
I trust that upon reflection of these points, that Council will recognize the important role of the
housing industry and the economic impact that it has within the Municipality.
Yours very truly'
Kelvin Whalen, P. Eng„
Vice-President, Land Development
Cc: Councillor Foster
Councillor Hooper
Councillor Novak
Councillor Robinson
Councillor Trim
Councillor Woo /
Ms. Nancy Taylor/
IIILD Ontario