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HomeMy WebLinkAboutPD-69-93 THE DN: DEVT-CH.COU OF THE TOWN OF NEWCASTLE PUBLIC MEETING Monday, April 19, 1993 File# Res. # Meeting: Council Date: # #: PD-69-93 File #: PLN 20.1 Subject: AMENDMENT TO DEVELOPMENT CHARGE BY-LAW DEVELOPMENT CHARGE POLICY REPORT INDEXING CRITERIA CONSTRUCTION COST INDEX/BUILDING COST INDEX TOWN OF NEWCASTLE Recommendations: It is respectfully recommended to Council the following: 1. THAT Report PD-69-93 be received; 2. THAT Council direct staff to bring forth an amending by-law to the Development Charge By-law 92-105 for May 31, 1993 Council meeting in compliance with the notice requirement of the Development Charge Act to: a) change the Construction Cost Index to Building Cost Index; and b) maintain the current development charge quantum as indexed last in October, 1992 to October 31, 1994. 3 . THAT notwithstanding the requirement for the indexing by the end of April, 1993, Staff implementing the said indexing schedule; and next scheduled shall withhold 4. THAT a copy of Staff Report PD-69-93 and the decision of council be forwarded to the Urban Development Institute, the Toronto Home Builders Association and the Durham Home Builders Association. 1. BACKGROUND: 1.1 Council, at its March 8, 1993 meeting, endorsed a resolution which in part amended the lot development charge payment schedule as described in the Development Charge Policy Report for Plans of Subdivision. . . .2 RECYCLED PAPIEIl PAPER rlECVCLE: REPORT: PD-69-93 PAGE 2 1.2 Additionally the resolution endorsed the following: "That the Development Charge By-law be amended to change the indexing from the Construction Cost Index to the Building Cost Index and the amending by-law be brought forth for passage in accordance with the procedure and requirements as set out in the Development Charges Act." 2. APPLICABLE PROVISIONS OF THE DEVELOPMENT CHARGES ACT: 2.1 The Development Charges Act provides through section (7) the necessary mechanism by which a council that has passed a Development Charge By-law the opportunity to amend said by-law. 2.2 Similar to the procedures followed in passing a Development Charge By-law, council is required to hold at least one (1) public meeting prior to any amending by-law being considered for approval. The public meeting is to be held no earlier than twenty (20) days after the requirements for the giving of notice has been complied with. 2.3 Staff would confirm that notice of the public meeting was placed in the local newspapers serving the Town within the prescribed time frame required in the Development Charges Act. 3. STAFF COMMENTS: In addition to the proposed indexing change from Construction Cost Index to Building Cost Index, this Report will also address the issues of freezing the development charge indexing on a temporary basis. 3.1 3.1.1 Chanqe from construction Cost Index to Buildinq Cost Index As noted within staff Report PD-41-93, C. N. Watson and Associates Ltd, in one of its 11 informational newsletters", noted that several municipalities had contacted them to inquire as to which indexing option - The Construction Cost Index (CCI) or The Building Cost Index (BCI) would be . . . 3 REPORT: PD-69-93 PAGE 3 considered to be the most appropriate for use by local municipality in indexing a development charge. 3.1.2 In reviewing the basis for the two indexes, c. N. Watson and Associates, concluded th~t the BCI may be more suitable for Development Charge Indexing purposes. It was considered generallY more consistent with requirements of municipal projects included in the development charge calculations. BASED ON SINGLE FAMILY UNIT IN COURTICE CONSTRUCTION COST INDEX BUILDING COST INDEX March, 1992 March, 1992 $4,797.00 $4,797.00 october, 1992 october, 1992 +2.98% ($143.00) -1. 24% (-$60.00) $4,940.00 $4,737.00 April, 1993 April, 1993 +3.43% ($169.00) +7.15% ($339.00) $5,109.00 $5,076.00 using the example of a following chart would construction Cost Index single family unit in courtice, provide a comparison between and the Building cost Index. the the 3.1.3 3.1.4 Based on the consultant'S suggestion, staff concurred that an amendment to the Development Charge By-law should be made to change the indexing to the Building Cost Index. 3.2 FREEZING OF INDEX 3.2.1 The Durham Home Builders Association has requested council to freeze the Development Charge indexing, presumablY to assist the housing industry in this tough economic time. staff would note for council's information that the Region of Durham has . . .4 REPORT: PD-69-93 PAGE 4 3.2.2 3.2.3 recently reacted to Development Institute freeze of indexing of a similar request from the Urban (U.D.I.) and has imposed a temporary the Regional charges. The Durham Home Builders Association requested that the development charge quantum of $4,797.00 as contained in By-law 92-105 be frozen for one year. Staff noted that the development charge quantum was last indexed in October, 1992 to bring the amount to $4,940. and are of the opinion that any discussion on the issue of freezing of indexing should be based on $4,940. and not on $4,797. To consider using $4,797. as a base for freezing the index would, in effect, suggest a roll back of levy and refund of charges collected since the last indexing in October, 1992, a position that staff cannot recommend Council to accept. The development charge payments made after October, 1992, were paid in compliance with the terms and provisions of their respective subdivision agreements, as well as being in compliance with the Town's Development Charges By-law. Therefore, no refund or credit should be considered for the difference in the development charge amount resulting from the Town's contemplation of freezing the indexing or changing the indexing from the Construction Cost Index to the Building Cost Index. The Durham Home Builder Association previously requested the Town to freeze the index for one year. This would effectively delay indexing to April, 1994. Since staff is suggesting $4,940. be used as a base for the purpose of freezing the index, we would have no objection if the freezing period be extended another six (6) months to end on October 31, 1994. Since freezing of the index was not originally contemplated in the public notice, a second public notice will be required and staff will bring forth an amending by-law at the council REPORT: PD-69-93 PAGE 5 meeting of May 31, 1993 to address the recommendations as contained in this Report. 4. CONCLUSION: 4.1 Staff feel that by maintaining the current development charge quantum until October 31, 1994, is a very generous gesture by the municipality as a precedent has been set by Durham Region. However, staff cannot agree with the latest position of the Home Builders Association, copy of which is attached for the information and deliberation by Council. Respectfully submitted, Recommended for presentation to the Committee lA-ill\J Wu, M.C.I.P. Director of Planning and Development Lawrence E. K Chief Adminis Officer LDT*FW*jip 15 April 1993 *Attach. V"tI.LOii;)v ~"".U' U "fLU UUU Ui,",":' \...oU.;,'It ":>UJ.Hnrt.~ \.:1:1..:> ...... l'n II \"':1.':> 1 Ln l4J UO:! Oshawa. Durham Home Builders' Association '~1EnWiEID) APR 13 1993 TOWM Of MEWCASl1.E PLANNING DEP^RTMENT P.O. Box 704 Oshawa. Ontar 0 l1H 7M9 1416\579.8080 1993'.04-07 Mayor Hamre The :\1un i ci pa 1 i ty of the Town of Newcast 1 e 40 Temperance Street Bowmanvi1le~ Ontario LIC 3A6 Dear ~ayor Hamre: With reference to recent conversations with Mr. F. Wu, Director of Planning, and yourself, and in recognizing the important modifications Council ha,s approved to the Development Charges By-Law as they relate to the timing of the payment and indexing of the levy~ the Oshawa/Durham Homebuilders' Association have developed and ratified a proposal for your consideration. The Oshawa/Durham Homebui1ders' Association requests that the Development Charge as at November 1992 ($4,940.00 per single family dwelling unit) be fi>:ed at that rate until April 1995. Further~ we ask that the index applied in April of 1995 be the lower of either the Construction Cost Index or the Building Cost Index if (at Council's discretion) an increase needs to be applied at all at thClt time, and that werEl an increase deemed necessary it would be calculated using the then applicable indElxing data and appl ied to the existing base levy amount ($4,940.,,00 per single fam'ly dwell ing unit). In other words, no historical or cumulativf! calculation wou~d be applied to the base levy amount in April 1995. YOUl' Worship, members of Council ~ and staff have expressed an empa~hy for the abYRmal market conditions evident in the building/development industry over the past two years. We hppe you will view our proposal as an opportunity tl~ make a tangible impact on improving the new home market, not just for builders but for new home bUYI~rs a 1 so. Cou~ci1ls acceptance of this proposal would, of course, preclude a1Y further require- men't to proceed at the C.M.B. We thank you for your consideration in this matter, and request that you contact the undersigned with any Questions or comments you may have. We look forward to a response at your earliest convenience. cc: - Mr. F. Wu, Director of Planning The Corporation of the Town of Newcastle - Mr. F. Veltri, President, O.D.H.B.A. - Mr. D. Horton, Executive Director Ontario Homebuilders' Association RA/sb THE CORPORATION OF THE TOWN OF NEWCASTLE NOTiCE OF PUBLIC MEETING DEVELOPMENT CHA'RGE PROPOSALc . The Town of Newcastle is consideringpassingariamendment to the' Development Charge By-law 92-105' pursuant to the Development Charges Act, 1989. Town Council will be holding a pUblic meeting, in accordance with Section 4.ofthe Dev.eloP111eht Charges Act, 1989, to enable the public to understand ~ger)eralJy , , '. '.' "," '::, ,} the amendment to the development charge by-law. AII'members I' , of the public are invited to attend the meeting which wi,1I be held on: ,:i Monday, April 19, ,1993 ' 9:30 a.m. Council Chambers Municipal Admlnlstratloh Centre 40 Temperance Street Bowmanvllle, Ontario Members of the public will be given an qppartunity at the meeting to make representations regarding the proposed amendment to the development charges. In addition, written sUbmissions may be forwarded to the Town Clerk,' 40" Temperance Street, Bowmanville, Ontario L1C 3A6 no later than 4:30 p.m., April 19, 1993. Written submissions received by the Clerk will be'available for public viewing during business hours at the Clerk's department at the above address. Submissions received in writing and those expressed at th~ puqlic meeting will be considered in preparation of the final report(s) and implementing by-law. ' The purpose and effect of the proposed amendment to the Development Charge By-law No. 92-105 is as follows:', ' i) to change the indexing factor from the Engineering News Record Construction Cost Index (CCI) to the, Engineering News Record Building Cost Index (Bel). Requests for information should bel directed to the Planning Department, L. Taylor, Manager, Development Review Branch. : . ^7 ewcastre ~, ONTARIO Date of Publication: March 24, 1993 Patti L. Barrie, A.M.C,r'. Town Clerk