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Energizing Ontario
REPORT
FINANCE DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: MONDAY APRIL 20T", 2009
Resolution #: ~- O~'U/
Report #: ADDENDUM TO FND-007-09 File #: By-law #: O - ~J~3
Subject: DEVELOPMENT CHARGES AMENDMENT AND BY-LAW
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report Addendum to FND-007-09 be received;
2. -THAT Report FND-007-09 be lifted from the table;
3. THAT the phase-in component of the residential development charges on
Schedule "1" of By-law No. 2005-108 be deferred from January 1, 2009 to July 1,
2010;
4. THAT the phase-in component of the non-residential (excluding industrial)
development charges on Schedule "2" of By-law No. 2005-108 be deferred from
January 1, 2009 to July 1, 2010;
5. THAT the phase-in component of the industrial development charges on
Schedule "2" of By-law No. 2005-108 be deferred from July 1, 2009 to July 1,
2010;
6. THAT there is no need to alter or amend the Development Charges Amendment
Study, May 2008, prepared by Hemson Consulting Ltd;
7. THAT the attached By-law to amend the Development Charges By-law 2005-108
as amended (Attachment "A"), be recommended to Council for approval and
enactment;
REPORT NO.: ADDENDUM FND-007-09
PAGE 2
8. THAT any proponents submitting further requests to amend or alter By-Law
2005-108 be advised of actions taken in this report; and
9. 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 ~~`---' .~.J Lt_
ranklin Wu,
Chief Administrative Officer.
NT/hjl
REPORT NO.: ADDENDUM FND-007-09
PAGE 3
BACKGROUND:
1.0 At the General Purpose and Administration Committee meeting on Monday,
March 30, 2009, a statutory public meeting was held to consider Report FND-
007-09. The purpose of the report and public meeting was to consider arr
amendment to the Municipality of Clarington's development charges by-law
2005-108, as amended to defer the final component of the phase-in increase
from January 1, 2009 to July 1, 2009.
1.1 A municipality must hold a public meeting on any amendment, having provided
three weeks notice of the meeting, and has to make the background study and
proposed by-law amendment available two weeks prior to the meeting. As
mentioned above, the public meeting was March 30, 2009 and was advertised
commencing the week of March 9th, 2009. The applicable documents were
available at the Clerk's Department commencing on March 11th, 2009.
1.2 The amendment proposed is not altering the amount, type and location of
development orgrowth-related capital costs that form the basis of the charge
determined in the Development Charges Amendment Study and therefore the
Study itself does not require an amendment. This document and FND-007-09
serves as the background study required under Section 10 of the DCA, 1997.
CONSULTATION:
2.0 At the public meeting, there were several delegations and a written submission
(Attachment "B") was received. All submissions requested that the extension of
the phase-in to July 1, 2009 be extended to the final expiry of the current by-law
2005-108, that being July 1, 2010. This was requested in light of the current
economic environment facing all sectors of the development/building community.
The position put forth was that a new Background Study is required to be
undertaken commencing the fall of 2009 in order for a replacement by-law to be
in place when the current by-law expires June 30, 2010. During this process, a
full review of all factors would be undertaken and the new by-law would reflect
those factors. Concern was also expressed with respect to comparative charges
in other jurisdictions.
STAFF COMMENTS AND REVIEW:
3.0 As a result of the public meeting on Monday March 30th, 2009, report
FND-007-09 (Attachment "C") was tabled to April 20th, 2009 to allow time to
consider the requests made.
3.1 As Council is aware, the current amendment to the Development Charges By-law
2005-108 as amended, is under appeal to the Ontario Municipal Board by
several developers as well as BILD. This does make consideration of
concessions favourable to the development and building industry somewhat
REPORT NO.: ADDENDUM FND-007-09
PAGE 4
difficult as the outcome of the OMB appeal is unknown at this time. The items
under appeal to the OMB are not part of this proposed amendment so if the
outcome is unfavourable to the Municipality, it would be in addition to decisions
made by Council as part of this proposed amendment.
3.2 With respect to comparable charges in otherjurisdictions, please see the
attached chart (Attachment "D"). It is important to keep in mind that Clarington's
geographic composition has always created unique servicing challenges that
result in a higher charge in order to provide services to several distinct
communities. Typically municipalities with one major urban community have
lower charges due to more condensed servicing opportunities.
3.3 That being said, there is no doubt about the current economic impact upon the
development and building industry in Clarington. The number of development
charges units paid for to date in 2009 remains low. This will have an impact both
upon future projects that can be undertaken due to the lack of funds as well as
upon the debt repayment requirements that are funded from development
charges.
3.4 Some sensitivity analysis has been undertaken based upon the impact of the.
deferral of the residential phase in increase. The final component of the phase in
equates to $1,703 for single and semi-detached homes. Every one hundred
units processed between now and July 1, 2010 would translate to lost revenue of
$170,300. If the number of units remains very low, the dollar impact would not
be significant. If the number of units starts to rebound, the dollar impact would
escalate. No sensitivity analysis has been undertaken on the non-residential
side due to the highly volatile nature of these sectors, but it is worthy of note that
these sectors may be more severely affected by economic downturns and take
longer to recover.
3.5 In the recent provincial budget, the projections indicated some recovery in the
economic conditions starting late 2009 and into 2010. "Growth is expected to
resume during the second half of 2009 and strengthen over the next few years,
with real GDP growth rates for planning purposes of 2.3% in 2010 and 3.3% in
2011." "Housing activity is expected to recover in 2010 as confidence rebounds,
incomes improve and households take advantage of low interest rates."
RECOMMENDATIONS:
4.0 Ultimately, there is a common concern to both the Municipality and the
developmenUbuilding community around the lack of activity in new construction
in Clarington. While the deferral of the phase-in increase is not expected to
create any type of surge of activity, it may be less of a temporary disincentive if
the phase-in is frozen. As a result, staff are prepared to recommend that the
phase-in components be deferred until the new by-law is put in place for July 1,
REPORT NO.: ADDENDUM FND-007-09 PAGE 5
2010, particularly in light of current economic conditions expected to remain for
the balance of 2009.
4.1 It is not recommended that the January 1, 2010 indexing provisions be deferred.
While this index has traditionally been in the Municipality's favour, in early 2009
the index was actually in a negative position (and therefore favourable to
developers and builders). It is currently not possible to predict what the index will
be for January 1, 2010 but it is fair to allow the indexing to fall where it may and
either party will bear the impact.
4.2 Council should be advised that there are currently additional efforts being
undertaken by the Durham Homebuilders and individual developers and builders
across the Region of Durham and likely elsewhere in the GTA to gain additional
concessions in the current economic climate. Due to both the ongoing appeal
and the concessions undertaken in this report, it would be the position of staff
that this is already a significant consideration given by Council and no further
action should be taken due to the longer term implications. Any proponents
submitting further requests would be advised of actions already taken.
4.3 It is important to note that due to the proposed deferral of the phase-in
component, it is extremely likely that the new background study to be undertaken
in the fall of 2009 would ultimately result in an increased in the charge for the
proposed new by-law for July, 2010.
Attachments:
Attachment "A" - By-law to amend By-law 2005-108
Attachment "B" -letter from Holloway Holdings Limited
Attachment "C" -copy of FND-007-09
Attachment "D" -Development Charges for York, Peel, Halton, Durham and
Northumberland
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 F (905)623-4169
SCHEDULE"1"
RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "1"TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2009-XXX
RESIDENTIAL DEVELOPMENT CHARGES PER UNIT
SCHEDULE BY EFFECTIVE DATE
July 1, 2008 January 1, 2009 July 1, 2010
(11.6% Index Only) `(Phase-In)
Single and Semi-Detached $13,012 $14,521 $16,224
Townhouse, Multiple and Row Units $11,353 $12,670 $14,131
Apartments
Large $8,907 $9,940 $11,148
Small $5,651 $6,307 $7,065
does not include January 1, 2010 indexing as information not yet available.
SCHEDULE"2"
NON-RESIDENTIAL DEVELOPMENT CHARGES
SCHEDULE "2" TO BY-LAW NO. 2005-108, AS AMENDED
AND AS FURTHER AMENDED BY BY-LAW 2009-XXX
NON-RESIDENTIAL DEVELOPMENT CHARGES PER
SQUARE METRE OF GROSS FLOOR AREA
SCHEDULE BY EFFECTIVE DATE
July 1, 2008 January 1, 2009 July 1, 2010 July 1, 2011
(11.6% Index Only) (Phase-In Only)* (Phase-In Only)`
Nan-Residential (excluding Industrial) $48.35 $53.96 $61.56 $69.16
Industrial $26.89 $30.00 $34.55 $39.09
Does not include January 1, 2010 or January 1, 2011 indexing as information not yet available.
Attachment "A"
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
BY-LAW NO. 2009-XXX
Being a by-law to amend Municipality of Clarington
Development Charge By-law No. 2005-108, as amended by
By-law No. 2008-104, 2007-195 and By-law 2006-160.
WHEREAS Subsection 2(1) of the Development Chazges Act, 5.0. 1997, c27 (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 azea to which the by-law applies;
AND WHEREAS the Council of The Corporation of [he Municipality of Clarington
enacted By-law No. 2005-108 - Being a By-law to impose development charges against land in
The Municipality of Clarington pursuant to the Development Charges Act, 1997 for The
Corporation of the Municipality of Clarington. By-law No 2005-108 was amended by By-law
No. 2006-160, by By-law No. 2007-195 and by By-law 2008-104;
AND WHEREAS Counci] has before i[ the Background Study entitled "Development
Charges Amendment Study, Municipality of Clazington" dated May, 2008 and report FND-007-
09 and Addendum to Report FND-007-09 (the "Study");
AND WHEREAS Section 19 of the Ac[ provides for the process for an amendment [o a
development chazge by-law, including the requirement that a public meeting ("Public Meeting's
beheld before an amendment is passed;
AND WHEREAS Counci] gave notice to the public of the Public Meeting and held the
Public Meeting pursuant [o sections 12 and 19 of the Act on March 30, 2009, prior to which the
Study and the proposed amending by-law were made available to the public, and Council heard
comments and representation from all persons who applied to be heazd and considered Report
FND-007-09 dated Mazch 30, 2009 (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 April 27, 2009
and submitted to Council Addendum Report to Report FND-007-09 dated April 20, 2009;
AND WHEREAS at its meeting on Apri12Q, 2009, by Resolution No. C-XXX-09
Council approved the recommendations contained in Report FND-007-09 and the Addendum
thereto;
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON ENACTS AS FOLLOWS:
L THAT By-law No.2005-108, as amended, is further amended by deleting Schedule
"1" and " 2" attached thereto and replacing it with a new Schedule "1" and "2" in the
form and with the content of Schedule "1" and " 2" attached to and forming part of
this by-law.
2. This by-law comes into force and is effective on July 1, 2009.
By-law read a first and second time this 27`h day of April 2009.
By-Law read a third time and finally passed this 27`h day of Apri12009.
Jim Abernethy, Mayor
Patti L. Barrie, Municipal Clerk
.>
03-27-'89 14:14 FROM-PAN Group/Halloway
905-579-9472
T-!
Attachment "B"
HALLOWAY HOLDINGS LIMITED
BUILDIN(:~ 1?Ok YO1.7 SINCL 1J22
March 27, 2009
Mayor Jim Abernathy.
Membets of Clarington Council
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Re: DevedopmentChargeAmendmentanrlBy-I,~wforProposerCNon-Residential
Phase-In Increases
Section 20 of By-Law 2005-18, a By-Law to impose development charges against land in
the Municipality of Clarington, lists ten public and other buildings that are exempt from
development charges. They are as follows;
1. Hospitals
2. Municipal/& or Region owned buildings
3. Places of Worship
4. Board of Education owned buildings
5. Colleges of Applied Arts
6. Universities
7. Clarington Science park & Energy Park
8. Registered Charity Organizations
9. Conversion of land or buildings within designated revitalization areas
10. Professional office of licensed Medical Practioners
Two additional By-Laws (2006-160 exempts Hotels) and (2007-108 allows fora 50%
discount for Major Office Buildings that are Leed Certified).
This places an added fiinancial burden on retail/commercial and industrial Site Plan
Applications to cover the proposed Non-Residential increases found in Report FND-007-
09.
As stated, in previous correspondence (May 29, 2008) our current and future commercial
tenants could not afford to pay the proposed fees increases. At that time our Townline
and Clarington Centres currently had over 25,000 sq. ft. of vacant retail space, today that
total exceeds 29,600 sq. ft. How this current economic cycle has effected Clarington is
evident from a Planning Services Report (PSD-015-09 dated February 2, 2009) titled
"Annual Report on Site Plan Activities 2008".
------------._.. .._----._......----F- ....... ........__... _..._.. ._.... _. .._._.....__... .
177 NUnquon Load, 20' F Eoor, Oshawa, Ontario 1.tG 3S'l.
T01: 905.5'79.162
Pax 905-579-94'72
03-27-'89 14:14
FHOM-PAN Group/Halloway
_2_
905-579-9472
T-549 P902l002 F-854
Paragraph 2.2 states Commercial and Tndustrial land used applications accounted for only
17% each of all site plans received in 2008. However, in 2007 45% ware Commercial
and 23%Tndustrial. Further more paragraph 3.1, states °`Site plan activity in 2008 has
deviated from recent trends as growth in the commercial sector has slowed down in
comparison to previous years".
T respectfully request Clarington Council consider a freeze of indexing/inereases of Non-
Residential T~evelopment Charges for the duration of TIC By-Law #2005-108.
Xours truly,
Vlr~~a~'yn/e C' larke
Property lvlanager
ItH:kd
Cc: Nancy Taylor (Treasurer)
Patti Barrie (Town Clerk)
Attachment "C"
~I
6nerglsing OntaNo
REPORT
FINANCE DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: MONDAY MARCH 30T", 2009 Resolution #:
Report #: FND-007-09 File #: By-law #:
Subject: DEVELOPMENT CHARGES AMENDMENT AND BY-LAW
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report FND-007-09 be received and approved;
2. THAT the phase-in component of the residential development charges on
Schedule "1° of the By-law No. 2005-108 be deferred from January 1, 2009 to
July 1,2009;
3. THAT the phase-in wmponent of the non-residential (excluding industrial)
development charges on Schedule "2° of the By-law No. 2005-108 be deferred
from January 1, 2009 to July 1, 2009;
4. THAT there is no need to alter or amend the Development Charges Amendment
Study, May 2008, prepared by Hemson Consulting Ltd.;
5. THAT the attached By-law to amend the Development Charges By-law 2005-108
as amended (Attachment #A), with any amendments recommended by the
General Purpose and Administrative Committee be recommended to Council for
approval and enactment; and
6. 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:
......, , ---r--. .., ......,
Director f FinancelTreasurer
Reviewed
Franklin Wu,
Chief Administrative Officer.
NTILG/hjl
REPORT NO.: FND-007.09
BACKGROUND:
PAGE 2
1.0 At the Council meeting of December 8, 2008, the following Notice of Motion was
approved by Council Resolution #C-583-08.
WHEREAS the Municipality of Cla~ington's Development Charges By-Law No.
2005-108, as amended by By-Law No. 2008-104 and By-Law 2007-195 and By-
Law 2006-160, provides for annual indexing to next take place on January 1,
2009;
WHEREAS By-Law 2005-108 as amended, provides for a phasing schedule
whereby the final component of the phase-in schedule approved June 9, 2008 is
effective on January 1, 2009; and
WHEREAS Council is concerned overthe combined impact of both the indexing
and the. phase-in resulting in a 25 % increase in development charges quantum
during a time of economic uncertainty;
NOW THEREFORE BE IT RESOLVED that staff be directed to:
prepare a draft amendment to By-Law 2008-108 to defer the final component
of the phase-in increase from January 1, 2009 to July 1, 2009, and to hold the
necessary public meeting so that Council can consider the amendment as
early as possible in 2009; and
2. not increase the existing charge on January 1, 2009 for the phase-in
increase, but rather pending consideration by Council of the amendmenrt to
the By-Law, just increase it on that date by the indexing component of By-Law
2008-108 as is standard practice in all municipalities.
2.0 DEVELOPMENT CHARGES BY-LAW AMENDMENT PROCESS:
2.1 The Development Charges Act, 1997, allows a municipality to amend an existing
development charges by-law. Section 19 of the Acf sets out the requirements
related to this procedure:
19. (1}Sections 10 to 18 apply, with necessary modifications, to an
amendment to a development charges by-law other than an amendment
by, or pursuant to an order of, the Ontario Municipal Board. [emphasis
added}
19. (2} In an appeak of an amendment to a development charges by-law, the
Ontario Municipal Board may exercise its powers only in relation to the
amendment.
REPORT NO.: FND-007-09
PAGE 3
2.2 To amend a development charges by-aw a municipality must go through the
same public process associated with enacting a development charges by-law. It
needs to complete a background study outlining the purpose of the amendment
and the rationale for the amendment. This document serves as the background
study required under section 10 of the Act.
2.3 A municipality must hold a public meeting on the amendment, having provided
three weeks notice of the meeting, and has to make the background study and
proposed by-law amendment available two weeks prior to the meeting. The
public meeting is March 30, 2009 and was advertised commencing the week of
March 9"', 2009. The applicable documents were available at the Clerk's
Department commencing on March 11"', 2009.
2.A Section 19(2} of the DCA is important because it allows for an amendment to an
existing by-law to be passed without exposing the unaltered portions of the by-
law toappeal. Only the amendment to the development charges by-law is
subject to appeal and consideration by the OMB.
3.0 BACKGROUND STUDY REQUIREMENTS:
3.1 Section 10(1) of the DCA, 1997, sets out the requirement for a municipality to
complete a development charge background study prior to the passage of a
development charge by-law or amendment. Subsection 10(2} identifies what is to
be included in the development charge background study. These legislative
requirements are summarized as follows:
s.10(2}(a) -estimate the amount, type and location of development
to which the devebpment charge [amendment] is to apply;
s.10(2)(b) -establish the eligible growth-related costs and services (as
determine under paragraphs 2 to 8 of subsection 5(1) of the DCA, 1997) to
which the development charge by-law [amendment] would relate;
s.10(2)(c) -examine, for each service to which the development
charge by-law [amendment] relates, the bng term capital and operating costs far
the capital infrastructure required.
3.2 The amendment proposed is not altering the amount, type and location of
development orgrowth-related capital costs that form the basis of the charge
determined in the Development Charges Amendment Study, so s.10(2)(a},(b)
and (c) are not relevant. The proposed amendment therefore does not require
an amendment to the 2008 Deveopment Charges Amendment Study and this
document serves as the background study required under Section 10 of the Act.
REPORT NO.: FND-007-09
PAGE 4
4.0 PROPOSED AMENDMENT:
4.1 The proposed amendment to defer the phase-in component increase from
January 1, 2009 to July 1, 2009 was done to lessen the financial burden on
residential and non-residential (exduding Industrial} construction or additions in
the first six months of 2009.
4.2 The Municipality is permitted through its Development Charges By-law to index
its municipal development charges an an annual basis effective January 15r each
year in accordance with the Statistics Canada Quarterly, Construction Price
Statistics, catalogue number 62-007 based on the 12 month period most recently
available.
4.3 The indexing percent based on the third quarter of 2008 per Statistics Canada
Quarterly, Construction Statistics catalogue number 62-007 was 11.6°~ which
was to be calcxilated on January 1, 2009 development charges.
4.4 Also effective on January 1, 2009 was the phase-in component on the residentia!
and non-residential {exduding Industrial} development charges so the combined
impact would be approximately a 25% increase on both types of development
charges.
4.5 Council was concerned with the high percentage increased during this time of
economic uncertainties so the January 1, 2009 phase in component on the
residential and non-residential {excluding Industrial} development charges has
been delayed to July 1, 2009.
4.6 In order to implement this proposed amendment to defer the phase-in increase
from January 1, 2009 to July 1, 2009, Schedule "1"-Residential Deveiopment
Charges and Schedule "2" -Non-Residential Development Charges of By-law
No. 2005-108 must be amended.
5.0 CONCLUSION:
5.1 Per DCA, 1997, the Development Charges By-law expires every 5 years which
necessitates that the Muniapal By-law No. 2005-108 expires on June 30, 2010.
5.2 As staff will commence a full Development Charges Update Review this fall, it is
recommended that an amendment to the 2008 Development Charges
Amendment Study is not required and that this report fulfills the requirement for a
background study.
REPORT NO.: FND-007-09
Attachment:
Attachment "A" - By-law to amend By-iaw 2005-108
Interested Parties:
Region of Durham
PAGE 5
CORPORATION OF THE MUNICIPALfTY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (90523-3379F (905}623-4169
Attachment "D"
Development Charge Per Single Detached Dwelling in
York, Peel, Halton, Durham and Northumberland Regions
April 1, 2009
Municipality Lower Tierl'I
5 Upper Tier
$ Total
$
Region of York
Vaughan izl $12,505 $23,752
$36,257
Richmond Hill iZ~ $10,784 $23,752 $34,536
Markham lzi $15,540 $23,752 $39,292
Aurora $11,658 $23,752 $35,410
Newmarket $7,981 $23,752 $31,733
Whitchurch-Stouffville $10,573 $23,752 $34,325
King (King City) $15,803 $23,752 $39,555
Georgina $4,370 $23,752
$28,122
East Gwillimbury (Queensville) $5,611 $23,752 $29,363
Region of Peel
Brampton $21,941 $18,125
$40,066
Mississauga ~3f $13,700 $18,125 $31,824
Caledon $19,180 $18,125 $37,305
Region of Halton
Oakville $14,102 $25,824
$39,926
Burlington $8,702 $25,824 $34,526
Milton $10,371 $25,824
$36,195
Halton Hills $13,960 $25,824 $39,784
Region of Durham
Ajax $11,631 $18,486 $30,117
Clarington $14,521 $18,486 $33,007
Whitby $10,208 $18,486 $28,694
Oshawa ~a~ $8,108 $18,486 $26,594
Pickering (4) $9,981 $18,486 $28,467
Scugogi4~ $11,905 $18,486 $30,391
Brocktul $10,757 $18,486 $29,243
Uxbridge $10,785 $18,486 $29,271
Northumberland
Port Hope 14) $16,040 - $16,040
Cobourg $19,706 - $19,706
Toronto - $12,366 $12,366
1. All lower tier municipalities except Vaughan, Markham Ihardi, & Halton Hills based on 2004 DC by-laws atlJustetl for indexing
2. Special Area Charges Excluded
3. Mississauga Stormwater Charge of $64,740 per net hecTare included assuming 35 units per ha
4. Expires summer 2009
Source: Hemson Consulting basetl on municipal data and municipal staff survey
HEMSON