HomeMy WebLinkAboutWD-67-92 THE CORPORATION OF THE TOWN OF NEWCASTLE
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REPORT
Meeting: COUNCIL File#
Date: JULY 27, 1992 Res. #
Report#: - -7---9-2— .File #: _FJ 40. 07 By-Law#
Subject: DEVELOPMENT CHARGES UP-DATE
Recommendations:
It is respectfully recommended that Council approve the following:
1. THAT Report WD-67-92 be received for information;
2 . THAT the firm of C. N. Watson and Associates be engaged to
undertake a cash flow analysis based on the information
contained in the Development Charges Policy Report; and
3 . THAT funds of approximately $6,000 for the cash flow analysis
and review be approved and that such funds be provided from
the Development Charges Reserve Funds .
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REPORT
1.0 ATTACHMENTS
No. 1: West Bowmanville
No. 2: North-West and South-East Newcastle Village
No. 3: North-West Bowmanville
No. 4: North-East Bowmanville
No. 5: South-East Courtice
No. 6: North-East Courtice
2.0 BACKGROUND
2 . 1 In compliance with the Development Charges Act, 1989, Council
passed Development Charges By-law No. 92-105 on March 23,
1992 .
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1115 i51'Vl:li[UCfJ ICCYCICU Pl.PII
REPORT NO. : WD-67-92 PAGE 2
2 .2 As Council is aware, this By-law identifies the capital works
for municipal services which are forecasted to be required
over the next ten ( 10) years to accommodate the expected
growth during this period. In accordance with the Development
Charges Act, projects were identified, costs were estimated
and the benefits to new development and also existing
residents were defined in the Development Charges Policy
Report. The costs identified are to be financed through a
combination of development charges attributable to new
development and the general tax levy.
2 .3 Since the development charge by-law was passed, staff has
focused its attention on a more detailed examination of
attempting to priorize development areas that could
accommodate new growth to satisfy housing needs while, at the
same time, recognizing specific infrastructure costs by
development area and the Town's ability to finance its share
of the cost. This exercise has led to some preliminary
conclusions regarding how the Town should proceed in
considering and approving further subdivisions .
2 .4 At this time, it would appear that it would be most prudent
from the Town's perspective, from both planning and financial
points of view, to consider development approvals within the
context of development areas (to a certain extent sub-
drainage areas) such that development is more concentrated in
order to take advantage of economies of scale related to
infrastructure costs . In addition, staff is
considering aspects related to phasing certain capital works
(e.g. parks development) in order to accommodate need and, at
the same time, being cognizant of the Town's financial
capability.
2 .5 To date, the development costs attributable to various
portions of the Town's urban areas have been examined in a
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REPORT NO. : WD-67-92 PAGE 3
general sense in order to identify the relative cost of
development proceeding. This is addressed subsequently in
this report. The general conclusion, at this time, is that
the Town should not allow development to proceed within all
general development areas at the same time.
2 .6 In order to address this critical aspect in more detail, a
cash flow analysis will be required in order to assess the
potential tax impact on a more specific basis . Once this
exercise has been established, it would then be used on an on-
going basis to monitor development costs and proceeds over
the ten year period which the development charges by-law is
applicable. This exercise will enable the Town to address
cash flow related to development in a more efficient fashion.
3.0 REVIEW AND COMMENT
3. 1 Development Areas
The registered plans of subdivision under construction and
draft plans of subdivision for consideration before the Town
were identified and grouped into Development Areas .
The boundaries constituting the Development Areas were
established with regard to the following principles:
a) The draft plans currently before the Town for review.
b) The limit of the Town's infrastructure and the Capital
Works proposed in the Town's 1992 Budget and Four Year
Forecast.
c) The existing and proposed storm drainage watershed
boundaries .
d) The location of subdivisions where development agreements
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were executed with the Town and required external
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REPORT NO. : WD-67-92 PAGE 4
services which the Town is eventually responsible to
construct.
e) The location of subdivisions where development agreements
were executed with the Town that included provisions for
"Front Ending Agreements" for certain external or
oversized works .
f) The plans of subdivision or land severances which did not
geographically form part of a development area or located
within a serviced area were considered "Infilling" .
3 .2 Classification of Development Areas
The Town's financial resources preclude the Town from
servicing all of the Development Areas concurrently. The
following principles were used to assess and determine the
scheduling for the servicing of the development areas:
a) The sequential development of lands relative to the
existing Town infrastructure.
b) The compatibility of the Capital Works necessary to
service a development area, with the Town's 1992 Capital
Budget and Four Year Forecast.
c) The servicing of existing registered plans currently
under construction for which the Town has a financial
obligation to construct external works .
d) The servicing of plans of subdivision where development
agreements obligated the Town to process Front Ending
Agreements .
e) The Town's ability to front end the Tax Levy and
Development Charges share of the costs of the Capital
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REPORT NO. : WD-67-92 PAGE 5
Works necessary for a Development Area.
f) The timing of the construction of Capital Works and
timing of the construction of the residential units
having regard to the fluctuations and demands of the
housing market.
g) The magnitude of the development area (residential units)
relative to the costs of the Capital Works related to the
development area.
3.3 The Development Areas established are listed below:
Area Description Attachment No.
A West Bowmanville 1
B1 North-West Newcastle Village 2
B2 South-East Newcastle Village 2
C North-West Bowmanville 3
D North-East Bowmanville 4
El South-East Courtice 5
E2 North-East Courtice 6
Infilling (Various Locations)
3.4 Cash Flow Analysis
The Development Charges Policy Report established the
Development Charge quantum by unit type for the Development
Charge Levy based on information compiled through the C. N.
Watson and Associates ' study.
As indicated above, the next stage of the exercise is
necessary to identify, on a more precise basis, the priority
areas for developments . This will require that the projects
included in this study be analyzed through a cash flow
analysis in order to more clearly identify potential tax
impact. i
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REPORT NO. : WD-67-92 PAGE 6
C. N. Watson and Associates has developed a detailed cash flow
model which incorporates debenturing and present value cash
flow analysis . This model has been used by a number of other
municipalities for similar circumstances .
The C. N. Watson Report formed the basis of the Town of
Newcastle's Development Charges Policy Report. Therefore, it
is recommended that the same firm be engaged for purposes of
undertaking this work. Until the cash flow analysis has been
completed and presented to Council, Report WD-67-92 will be
used as a general guideline for purposes of considering
approval or registration of plans of subdivision.
Respectfully submitted,
'Walter A. Evans, P.Eng. , Ma ie Marano, H.B.Sc . , AMCT,
Director of Public Works Treasurer
.._..,a „%S\, A,
Franklin Wu, M.C. I .P. , Jdseph P.7 C r na, Dire for
Director of Planning Department of C6mmunity Services
and Development
Recommended for presentation
to the council ,
Lawrence E. Kot e f,
Chief Administ a i e Officer
WAE*MM*LEK*ph
July 23, 1992
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