Development Charges update required before September
by Sandy Lindsay
January 26, 2016
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Saugeen Shores is re-visiting the issue of Development Charges (DC) as part of a required 2016 update.
The Development Charges Act was enacted in 1997 to "allow a municipality the opportunity to recover costs for services attributable to growth. These services include the installation of water as well as sanitary and storm sewer services and the construction of roads, hospitals and other facilities."
In Saugeen Shores, DCs were first implemented in 2008 (Read Here) at which time Mayor Smith said that, "Development charges will have some moderating affect but, at some point, Council will be faced with raising tax rates significantly to ensure that capital projects are completed or may say, 'we are deferring certain projects'."
The municipality currently has two town-wide DC By-laws - one for engineered services and the other for general services. With the 2016 update, it is proposed that the two be consolidated into one By-law. The first By-law expires in September of this year.
Craig Binning of Hemson Consulting Ltd., the company tasked with completing the study to update the B-law, outlined the process and steps that will be required to ensure the study and By-law are completed prior to expiry of the existing By-Law in September.
"The common term used for DCs," said Binning, "is 'growth pays for growth'. "
The underlying principle is so that existing taxpayers don't have to shoulder the financial burden of development and the services that that entails.
Under a new amendment (DCA), there are services that are now eligible to be included in development charges, such as waste collection and treatment. In addition, within the Asset Management Plan (AMP) required by municipalities, assets must demonstrate that they are 'financially sustainable' over their full lifecycle.
Also, there is now a longer consultation period of 60 days prior to the passage of a DC By-law.
Although the Town has previously calculated DCs on a town-wide basis, under the new DCA, it now has to consider some as 'area specific' charges for services.
In Saugeen Shores, as with most muncipalities, the majority of DCs go toward 'engineered services' which include water, wastewater and roads.
When it comes to actual charges, Saugeen Shores is in the middle for both residential and commercial when compared to surrounding communities.
For a single dwelling residential unit, Blue Mountains is at the top of the list at more than $37,000 while South Huron is at the bottom with just over $3,000 per unit. In the middle, Saugeen Shores currently sits at $14,700 while Owen Sound is over $11,000 and Kincardine is $7,500. [Green arrow indicates Saugeen Shores]
As with residential, commercial development in Saugeen Shores is again almost in the middle at $45/sq.ft compared to $172/sq.ft. in Blue Mountain and $33/sq. ft. in Kincardine. Of the 14 municipalities in the comparison only three have opted out of DCs for commercial. [Green arrow indicates Saugeen Shores]
Hemson Consulting will now spend time with Saugeen Shores staff to review and study the implications of the new DCA and finalize the development charges By-law before its expiry in September.
"At this point in time, we can't say if the DCs will go up or down," said Binnining. "We do know of instances where they have gone down. We also have to have discussions with developers, although they weren't happy in 2011 with the increase that was approved then."
Throughout the upcoming months, there will be preliminary draft rates and policies presented to Council (April) along with a stakeholder consultation and release of the background study followed by a Public Consultation in May with passage of the By-law expected in August, 2016.
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Tuesday, January 26, 2016