It could soon become more expensive for residential and commercial developers aiming their projects for Tiny.
Council this week received a consultants’ report, which proposed that residential development charges be increased to $19,000 compared to the current $17,000 and that commercial charges be hiked to $9 per sq. ft., instead of the current $7 per sq. ft. fee.
Development charges are in place to recover capital costs associated with residential and non-residential growth in the municipality, Watson & Associates Economists Ltd. manager Nancy Neale said during an hour-long presentation to council.
Development charges are partially based on the cost of infrastructure required for growth, she said. For residential, it results in charges for different types of units while for non-residential, it takes into account actual square footage for industrial/commercial/institutional type development, added Neale.
Coun. Cindy Hastings asked why the increase for retail and industrial development charges was so significant.
Neale said part of it was because of changes to legislation over the last few years.
“We take all growth-related net costs and split them between residential versus non-residential,” she said. “The growth forecast has impacted on those charges. The other thing that impacts is the amount of costs around transportation and fire. The increase in the roads component itself is significant both on the residential and non-residential side.”
Hastings agreed that the township wants to spend more to improve its roads.
“But are we being fair?” she asked. “Is it fair to put on new development when, as you've mentioned, the developers look after the local improvements (internal roads, sewers, sidewalks)?”
Neale said that’s partially because the municipality has put together a much larger spending program than what it had in the past for roads.
“It's been identified by staff as a need,” she added. “The more traffic you have, the roads are not sustaining at the service level right now and it needs to be increased at a higher level. That's what we're trying to capture. It's based on the capital program itself over a 20-year period.”
Coun. Tony Mintoff said he was gobsmacked by the increase in the transportation services as it related to development charges. The new calculated charges for this section have gone up to $5,089 from $393 for a single dwelling and $3.75 per sq. ft. from $0.36 previously.
“We're not a growth municipality where all of a sudden we've got all sorts of development and have much more traffic,” he said. “We're looking at a 1,200% increase and it just boggles my mind that we would make that quantum leap given we're a low-development municipality.”
Mintoff said he was also confused about the fire protection services section.
“We've dropped that by 50% and I'm not sure what the rationale was for that,” he said, referring to the new fee of $643 from $1,184 for single residences and to $0.51 per sq. ft. from $0.84 previously for non-residential.
Neale said that was because the fire capital program included expansions of the vehicle base, as well as a training facility, and some additional equipment in the form of a new truck.
“The current program still has the expansion to the base,” she said. “But one of the significant changes has been to reduce the vehicle from an aerial truck to a tanker truck. It's quite a bit different in cost.”
Hastings then asked about how the development charges would affect redevelopment in the area?
“It allows you to expand your existing home without paying development charges,” said Neale. “If you were knocking down a cottage and building a row of townhouses, there would be incremental service charge increases. If all you're doing is knocking down one house and replacing it with one house, there's no incremental increase. And you don't even have to knock it down, you could just expand.”
As well, she said, a municipality can practise discretionary exemptions for specific types or classes of development.
“If you wanted to give industrial 50% exemption of a charge, you have the ability to do that through a policy,” said Neale, adding a caution, “Anytime the calculated charge is reduced or exempted, those are costs you are no longer going to be recovering from growth and when you go to fund capital projects, you're going to have to fund those through taxes or other avenues.”
At the end, Deputy Mayor Steffen Walma simplified the matters for those watching.
“The more we invest in something, the more development charges we can charge and the less we invest, the less development charges we charge,” he said.
Council received the presentation for information and directed staff to hold a public meeting as part of the next committee of the whole meeting to be held Nov. 30. The meeting can be viewed via the township's YouTube channel.
Mehreen Shahid, Local Journalism Initiative Reporter, OrilliaMatters.com