Loading...
HomeMy WebLinkAboutFND-007-09 AddendumUNFINISHED BUSINESS 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