HomeMy WebLinkAboutTR-36-00 Addendum
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THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting:
General Purpose and Administration Committee
File #:f!() c;.
Res.#/dfl- 3f,/-oo
Date:
July 3, 2000
Report #:
Addendum to TR-36-00 File #:
By-Law #:
Subject:
DEVELOPMENT CHARGES STUDY AND
BY-LAW 2000
Recommendations:
It is respectfully recommended the General Purpose and Administration Committee
recommend to Council the following:
1, THAT Report TR-36-00 be lifted from the table;
2, THAT recommendation #2 in Report TR-36-00 be revised to reflect a starting
date of August 1, 2000 with all other dates unchanged;
3. THAT the recommendations, as revised, in Report TR-36-00 be approved; and
4. THAT Schedule "A" (attached), be received for information.
Background:
1.0 At the General Purpose and Administration Committee meeting of June 19, 2000, the
Committee tabled Report TR-36-00, titled Development Charges Study and By-Law
2000.
2.0 Staff were directed to address, in writing, the concerns raised at the Public Meeting
held on June 19,2000. Craig Binning of CSB Inc., the municipality's consultant, has
responded to the issues raised at the public meeting, in Schedule "A" attached.
3.0 As the initial start date for the implementation of the charge was July 1, 2000, it is
necessary to amend the start date to August 1, 2000. The balance of the dates for
phasing-in of the charge remain unchanged.
Reviewed by:
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rie A. Marano, H.BSc"AMCT, CMO,
Treasurer.
Franklin Wu, M.C.I.P.,R.P.P"
Chief Administrative Officer.
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Attachment
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Schedule A TR-36-00
MUNICIPALITY OF CLARINGTON
DEVELOPMENT CHARGES STUDY
RESPONSE TO ISSUES RAISED AT JUNE 19, 2000 PUBLIC MEETING
Issue 1: The size of the Baseline Community Centre Park was listed as 1.7 ha in the 1999
Development Charges Background Study and the May 2000 Development Charges
Background Study identifies the same park as being 8.9 ha. Why the change?
Response:
As part of the review all of the background historical service level data was reviewed
and confirmed. As a result of this review a number of figures in the background
study were adjusted, In particular, adjustments were made to the land area
attributed to the various Indoor Recreation Buildings and Community Centres and
the amount of land attributed to parks adjacent or in proximity to these facilities,
With respect to the Baseline Community Centre the follOWing adjustment was made:
Allocation of Land Area at the Baseline Community Centre
Indoor Recreation Parkland Total
1999 DC 9.9 Ha 1. 7 Ha 11.6 Ha
Backaround Studv
2000 DC 1.0 Ha 8,9 Ha 9.9 Ha
Backaround Studv
Issue 2: The Longworth Park (Bowmanville) listed on Table 1 - Page 6 Appendix B.4 of the
May 2000 Development Charges Background (page 99) does not exist.
Response:
There is a developed park called Longworth that has been in existence since 1995.
This park is located in the Liberty Village Subdivision. The park abuts Maxwell Court
and Swindells Street.
The developers have made reference to another park, yet to be developed, that
some have referred to as "Longworth" park. This new park is distinct from the one
identified above and has not been included in the Development Charges Background
Study.
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Issue 3: The Library Service calculation on Table 3 of Appendix B,l (page 61) of the May
2000 Background Study does not appropriately account for the service level excess capacity
identified on Table 2 of Appendix B,l (page 58).
Response:
The excess capacity identified within the Library Service relates the Courtice Branch
(part of the Courtice Community Complex). The Courtice Branch has been deemed
to include committed excess capacity, The excess capacity was created to provide
service capacity for future growth. The allocated cost of the committed excess
capaCity is approximately $1.62 million and is comprised of building space and land.
As part of the review process the Library service sub-components of
Furniture/Equipment and Collection Materials were examined relative to service
levels and excess capacity, It was established that the existing Furniture/Equipment
and Collection Materials within the Courtice Branch are appropriately sized for the
existing service population and no excess capacity exists within these service sub-
components.
Issue 4: The analysis of the impact of the alternatives should have examined the tax
impact of implementing the fully calculated development charge rates,
Response:
Section 3.6 and Appendix D (Pg.156) of the May 2000 Background Study provides a
detailed examination of the impact to the Municipality of implementing the fully
calculated development charge rates, As discussed in the background study, the tax
impact of implementing the fully calculated development charge rates of $6,994 per
residential single detached unit and $20.40 per square metre of non-residential
space is approximately $10 million(discount contribution/operating & pre-built). This
is the net amount that the property tax levy will need to increase to fund the capital
program. Most of the increase will be offset by the associated increase in
assessment however there will be an upward pressure on tax rates.
The attached Schedule 1 displays the tax impact of the Steering Committee
recommend phase-in program and the phase-in alternative proposed by the Durham
Home Builders. These impacts are in addition to the impact of implementing the
fully calculated development charge rates.
As shown on the top-half of Schedule 1, the ten-year tax levy impact of
implementing the Steering Committee phase-in program, starting August 1, 2000, is
$2.5 million. On a ten-year timeframe, the average annual impact is $250,000,
which is equivalent to 1.54% of the 1999 Clarington property tax levy. Moving the
start date of the phase-in to January 1, 2001 increases the tax levy impact to $3.2
million ($320,000 per year) or an average annual impact of 1.97%,
Under the Durham Homebuilders scenario (phasing in the rates over 3 years,
starting January 1, 2001, with the increase in rates being limited two-thirds of the
calculated increase) is shown on the bottom half of Schedule 1. If the DC rates are
indexed annually, the ten-year tax impact of the phase-in program is $8.7 million or
$870,000 per average year. This would represent a 5.36% increase over the 1999
tax levy. If the DC rates are not indexed the impact is even more significant at
$13.9 million ($1.4 million per year) representing an annual property levy impact of
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8.57% over 1999 levels,
Issue 5: The Municipality has failed to provide information on the status of the
development charge reserve fund and the expenditure of development charge revenues.
Response:
The Municipality produces an annual report to Council on the continuity of the
Development Charge Reserve Fund, consistent with the requirements of the
Development Charges Act. The report has been produce every year since the
passage of the first Development Charges By-law in 1991. The 1999 DC Reserve
Fund Report was on the GPA Committee Meeting of June 19, 2000,
Issue 6: The ratepayers have not been invited to all of the Development Charge meetings.
Response:
The legislation requires that the Municipality hold one Public Meeting and that the
supporting Background Report and Draft By-law be available at least two weeks prior
to the meeting. The Municipality held this meeting, June 19, 2000, having -giving
notice of the meeting more than 3 weeks prior to the meeting, At the time that the
notice of the meeting was given the Background Study was available.
On May 9, 2000, prior to the statutory Public Meeting, the Development Charges
Staff Steering Committee and Consultant hosted an information session for members
of the Development Community_ As in the past, the Municipality has recognized that
the Development Community is a major stakeholder with respect to potential impact
of changes in Development Charge rates and policies and as such has endeavoured
to extend them additional time and opportunity to review the changes and provide
input to the process,
Issue 7: Does the Municipality provide through the Principals of Understanding special
treatment for the development covered by the Kaitlin Group / Port of Newcastle
development.
Response:
The Municipality is not treating this development different than any other
development within the Municipality, When Port of Newcastle development proceeds
the developer will pay the development charges enforce at the time that the building
permits are approved consistent with the provision of the Development Charges By-
law,
Issue 8: The Municipality should provide in the Development Charges By-law an exemption
or a reduced rate for "Adult Ufe Style" developments such as Wilmot Creek.
Response:
Consistent with the practice of most municipalities in the Province, Clarington's
ReSidential Development Charge rates are expressed on a unit base type (i.e. single
detached unit, apartment unit, etc) as opposed to the proposed land use (i,e, "Adult
Lifestyle") .
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Charges are calculated on a per person basis and then factored up based on the
typically occupancy of a unit type. For example, a charge of $2,120/ person is
calculated and the typical occupancy of a single family detached unit within the
municipality is 3.3 person yielding a per unit charge of approximately $7,000
(3.3*$2,120). The data used to establish the charge is obtained from Census data,
Census data is reported on a built form basis (unit types) rather than less
quantifiable residential land use definitions. The Clarington charges have been
established on average data (particular to Clarington) that incorporate a full range of
residential unit uses and family sizes, Isolating one proposed residential land use
(adult lifestyle) and providing it with a lower charge will skew the averaging principal
and result in an ultimate development charge revenue shortfall to the Municipality.
The difficulty with establishing charges on a proposed land use base within the
residential development category is that the municipality (and arguably the
developer) has little to no control over the future use of the units that are
constructed. A detached household unit maybe constructed and marketed to "empty
nested seniors" however there is little that can be done to place controls on the
occupancy of a privately owned household. It is very difficult to place workable and
enforceable definitions for these types of development proposals.
Some municipalities have provided lower rates for retirement units or special care
units. These special rates typically relate to the size of the unit (small units) and
usually are for multi-unit buildings or facilities. This is one of the reasons we have
introduced a small apartment rate in the new proposed by-law.
The Ontario Municipal Board recently (June 21, 2000) ruled in favour of a
municipality (Town of Lincoln) supporting a DCA by-law that did not provide a special
rate for "Adult Lifestyle" developers. We will proVide Council with additional
information on this decision as it becomes available,
Issue 9: Will the Municipality permit the pre-payment of Development Charges.
Response:
The DCA allows a municipality to collect development charges at a point earlier than
building permit issuance, At the Public Meeting, it was suggested by Staff, that if
Council were to consider this option, there should be a time-limit or sunset clause,
for example that a upon pre-payment of a Development Charge the associated
building permit(s) must be drawn within six months,
Subsequent to the Public Meeting staff discussed this issue with other surrounding
municipalities, and were cautioned against the policy in that it has created additional
administrative requirements. They indicated the pre-payment policy has
necessitated the implementation of an additional monitoring mechanism.
Issue 10: The Municipality should exempt non-residential development from the charges to
encourage this type of growth,
Response:
If the municipality continues to exempt non-residential development from the
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payment of development charges the loss of revenue will be approximately $6
million, These revenues can be broken down as follows: Commercial $2.0 million,
Industrial $2.8 million and Institution $1.2 million, If all or some of these uses are
exempt the loss in development charge revenue will need to be funded from property
taxes or other revenue sources.
Currently, the Municipality of Clarington is the only Durham municipality, with the
exception of Oshawa, that is not charging a non-residential development charge.
Prepared by;
Craig Binning
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Addendum TR-36.oo SCHEDULE 1
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MUNICIPALITY OF CLARINGTON
OEVELOPMENT CHARGES STUDY. MAY 2000
PHASE-IN SCENARIOS AS MODIFIED AT THE JUNE 19.2000 PUBLIC MEETING
0,
Phase-In Scenarios Considered by The Steering Committee
Phase-In Schedule. Rates As Of: Development Charge Revenue loss
1-Aug.OO 1-Jan..Q1 1-Jul-01 1-Jan-02 1.Jul-02 1-Jan-03 1-Jul-03 1-Jan-04 1-Jul-04 i-Jan-Q5 Ten Year Average Annual
Phsse../n Total Loss I % of 1999 (3)
Steering Committee Recommendation S_ 10 Full Rate]
Residential ($1 SOU) (1) $ 5,875 S 6,250 I 6,625 $ 6,994 $ 6.994 I 6,994 $ 6,994 $ 6,994 I 6,994 I 6,994 $ 1,342,000 I 134,200 0.83%
Non-Residential ($/sq,m,) (2) $ 4.08 nle I 8.16 nle I 12.24 n1e $ 16.32 nle $ 20.40 $ 20.40
Commercial I 396,780 $ 39,678 0.24%
[ Existing Rate $5,468 ] Industrial I 536,820 I 53,682 0.33%
Institutional $ 233,400 I 23 340 0.14%
Total Non-Res $ 1,167,000 I 116.700 0.72%
Tota' $ 2 509 000 $ 250.900 1.54%
2 start May 2000 Background Report Ph.aNn
Phase-In Programs on January 1, 2001 8ral1!
versus Aug 1, 2000 [@FuIlRiat.j
Residential ($I SDU) (1) $ 5,458 $ 5,815 I 6,250 I 6,625 $ 6,994 I 6,994 S 6,994 I 6,994 I 6,994 I 6,994 S 1,663,000 $ 166,300 1.02%
Non-Residential ($/sq.m,) (2) I $ 4,08 nle I 8.16 nle I 12,24 nle I 1632 nle $ 20,40
Commercial I 520,880 I 52,088 0,32%
Industrial I 704,720 I 70,472 0.43%
Institutional $ 306 400 I 30,640 0.19%
Total Non-Res $ 1,532,000 $ 153,200 0,94%
Total $ 3,195,000 $ 319,500 1.97%
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Phase-ln SC:narlo Proposed By the Developers. Reduce the Increase In the calculated DC Charges by one-third and phase-ln Resldentiall'1tes over 3 years and Non-Residential over 5 years with first Increase January 1, 2001
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1-Aug-00
1.Jan-01
Phase.ln
Starts
1-Aug-01
Phase-In Schedule - Rates As Of
1-Jan-02 1-Aug-02 1-Jan-03 1-Aug-03
1-Jan-04
1-Aug-04
1-Jan-05
Development Charge Revenue loss
Ten Year Average Annual
Total loss $ % of 1999 (3)
No Indexing of Rates
Residential ($f SOU) (1) $ 5,458 $ 5,604
Non-Residential ($Isq,m.) (2) $ $ 2.72
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$ 5,896
$ 5.44
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10 Full Ratej
$ 6,482 I 6,482 I 6,482 $ 6,482 $ 6,482 I 5.794,000 I 579,400 3.57%
S 8,16 nle S 10,88 nle S 13.60
Commercial S 993,000 I 99,300 0.61%
Industrial S 1,344,000 I 134,400 0,83%
Institutional I 584000 S 58,400 0.36%
Total Non-Res. I 2,921,000 $ 292,133 1.80%
Total $ 8,715.555 $ 871,555 5.36%
$ 6,482 $ 6,482 I 6,482 $ 6.482 S 6,482 S 10,650,000 I 1,065,000 6,55%
I 8.16 nle I 10,88 nle $ 13.60
Commercial I 1,112,000 I 111,200 0.68%
Industrial I 1,505,000 I 150,500 0.93%
Institutional I 654,0Cl0 I 65 400 0.40%
Total Non- es $ 3,271,000 I 292,133 2,01%
Total $13.921,000 $ 1,357,133 8.57%
With Annual Indexing of Rates
Residential ($I SDU) (1) $ 5.458 $ 5,604
Non-Residential ($Jsq.m.) (2) $ $ 2.72
!1I3ofincrellse$6,W+5458=1,53613]
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$ 5,896
$ 544
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Noles:
(1) Residential rate is the rate per single detached unit
(2) Non-Residentiai rate is the rate per square metre of new non-residential gross floor area
{3} Average Annual DC Revenue loss expressed as a percentage of the total 1999 property tax levy.
n/c '" no change in rate at the applicable date