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3. tHE NEW DEVELOPMENT CHARGE BY-LAW - APPROACH AND TIMETABLE NOUVEAU RÈGLEMENT MUNICIPAL SUR LES REDEVANCES
D’EXPLOITATION – DÉMARCHE ET CALENDRIER |
Committee RecommendationS
That
Council approve:
1.a) The general principles
underlying the Development Charges Review Study ass outlined in Appendix Document 1 and
detailed in this report. ; and
2. T
b) the
timetable for the Development Charges Study as outlined in Document Appendix 12 and detailed in
this report be received for information.
Recommandations
du comité
Que le Conseil approuve :
1. les principes généraux qui
sous-tendent l’étude sur les redevances d’exploitation, énoncés au
document 1 et décrits en détail dans le présent rapport.
2. le calendrier de réalisation de
l’étude sur les redevances d’exploitation, présenté au document 2 et décrit en
détail dans le présent rapport.
Documentation
1. Development Services Department
General Manager's report dated 14 October 2003 (ACS2003-DEV-POL-0053).
2. Extract of Draft Minutes, 21 October 2003.
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels et du
développement économique
and Council / et au Conseil
1421
October 2003 / le 2114 octobre 2003
Submitted by/Soumis par : Ned Lathrop, General
Manager/Directeur général,
Development Services/Services d'aménagement
Contact Person/Personne
ressource : Dennis Jacobs, Director / Directeur
Planning, Environment and Infrastructure
Policy/Politique d'urbanisme, d'environnement et d'infrastructure
(613) 580-2424 x25521, dennis.jacobs@ottawa.ca
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SUBJECT: |
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OBJET : |
NOUVEAU RÈGLEMENT MUNICIPAL SUR
LES REDEVANCES D’EXPLOITATION – DÉMARCHE ET CALENDRIER |
REPORT RECOMMENDATIONS
That the Corporate Services
and Economic Development Committee recommend Council approve:
1.a) the general principles underlying the
Development Charges Review Study ass outlined in Appendix Document 1 and
detailed in this report. ; and
2. T
b) the
timetable for the Development Charges Study as outlined in Document Appendix 12 and detailed in
this report be received for information.
RECOMMENDATIONS DU RAPPORT
Que le Comité des services organisationnels et du
développement économique recommande au Conseil d’approuver :
1.
les principes généraux qui
sous-tendent l’étude sur les redevances d’exploitation, énoncés au
document 1 et décrits en détail dans le présent rapport.
2.
le calendrier de réalisation de
l’étude sur les redevances d’exploitation, présenté au document 2 et décrit en
détail dans le présent rapport.
BACKGROUND
The Development Charges Act, 1997 came into force and effect on March 1, 1998. According to the Act, when municipalities adopt a development charge bylaw, it must be supported by a Background Report that estimates the amount, type and location of development; includes a calculation for each municipal service included in the development charge (e.g. growth/non-growth split, residential/non-residential split, capacity in existing systems), and an examination, for each service, of the long-term capital and operating costs for the capital infrastructure required and other information that is deemed relevant. Under this legislation, the former Region and former municipalities (except for Ottawa and Vanier) formulated development charge by-laws which came into force mid 1999. The Development Charges Act, 1997 also states that municipalities must update and complete a new background study to determine development charges within a 5-year period of the existing development charge by-law initiation date. Therefore, the City of Ottawa must pass a new development charge by-law(s) by the end of July, 2004. In addition, the amalgamation of the City of Ottawa and recent levels of development have required a reassessment of short and long term growth related capital expenditures. The Ottawa 20/20 Growth Management Strategy has provided a framework for this reassessment and the adoption of the City’s new Official Plan and related Transportation and Infrastructure Master Plans have established a new vision for determining capital priorities.
DISCUSSION
1. ) General Principles
It is important for the Development Charges Review Study to proceed with certain principles established by Council early in the process so that this direction can frame the way in which the new bylaw or bylaws are prepared. The following is a discussion of these general principles.
a1) Capital
costs for growth must be self supporting.
The main principle outlined in the City’s Long Range Financial Plan is that growth must pay for itself to the extent allowed by legislation and not be subsidized from the tax base. This refers only to the growth portion of projects. Where new construction or improvements to existing facilities are caused by growth pressures but also serve existing development, this non-growth portion of the project must be funded by tax/rate related revenue. Council must consider limiting growth where the growth/non-growth components are not affordable.
The
City will collect development charges for all growth-related major
infrastructure items and all growth-related local infrastructure will be
provided and paid for directly by developers. This breakdown between local and
major projects will be different than that found in the previous development
charge by-laws prior to amalgamation.
This was done to reduce the overall number of projects by including only
those that serve a wider area and to facilitate the development process.
Given that the
new development charge bylaw must be adopted prior to August 3, 2003 or the
City will lose the authority to collect any charges, phasing in
of the charges in a new bylaw will not be considered.
b2) Implement Ottawa 20/20 Directions.
The structure of the development charge bylaw(s) will provide an implementation tool for the Ottawa 20/20 principles such as the encouragement of compact development, use of existing infrastructure, encouragement of mixed use development, and concentration of rural growth in villages.
c3) Build on the methodolgy from previous
bylaws.
In 1999, new development
charge bylaws were adopted by the Region and all former municipalities in
response to the Development Charges Act, 1997.
Considerable work and discussion with the stakeholder community took
place at that time. The process and
methodology followed by the former Region in preparing its development charge
background report and bylaw has provided a good foundation for this update. The harmonization of both what were formerly
upper and lower tier services from a variety of municipalities does necessitate
a review of service levels. Upon adoption of new City of Ottawa engineering
standards, any adjustments will be
incorporated into project calculations. Therefore, the approach for this
development charge review is to continue what has been both established and
found acceptable practice by the stakeholder community and to focus change upon
those elements for which there is a compelling reason to move in a new
direction. In these instances, best
practice from other municipalities will be investigated as part of the change
process.
d4) Pursue
a rate structure that reflects the servicing characteristics and geography of
Ottawa.
i) Implement city-wide charges for those
service areas that are appropriately funded by all new development .
Some growth-related services provide benefit throughout the Ottawa service area. These often provide benefit to the entire Ottawa area from a single location (sewage treatment) or the growth-related benefit cannot be assigned to a specific geographic location (tranist). Other examples are: city-wide parks, water purification, major road network, major recreation facilities (e.g. a new Sportsplex). The growth component of these facilities should be cost-shared at the same rate in one part of the city as another.
ii) Implement specific large area rates for
services that can be assigned to general geographic distribution areas.
Wherever possible and reasonable, charges should be amalgamated to a higher geographic area to spread the cost over the area of development being served; to reduce administrative error and cost; to increase stakeholder community understanding; to avoid penalizing deveopment unnecessarily for particular geographic features; and to maintain some consistency between charges for growth-related municipal services and taxing and user fee practices.
With fewer area-specific charges, the City is better able to determine its servicing priorities; to use funding more flexibly within service accounts; to better respond to factors impacting municipal decisions; and to be more strategic in its service provision. Monies collected for services in relation to development charges cannot be used for another purpose. Therefore care must be taken in the definition of areas. If areas are defined too finely, it may remove users of the service from the requirement to pay (those locating outside of the defined area). For example, with a recreation facility, if the area of users is too narrowly defined, future users from other growth areas would not be required to pay even though they are users of the facility. Narrowly-defined areas can lead to a reduction in flexibility for the municipality as monies collected can only be spent for the specific services in the specific area. In addition, it would reduce the city's ability to determine its servicing priorities. In effect, individual developers would determine the priority of the infrastructure that gets built. With the definition of specific areas at an appropriate level, these concerns can be greatly mitigated.
Therefore, to implement the
general direction of the Official Plan and to reflect principles of equity, most
services should be assessed with a
large area approach. For this study, it
is proposed that two scenarios be prepared for most services. These would include one scenario based upon
four areas: inside the Greenbelt,
outside the Greenbelt (combining East, South and West), rural and Kanata West.
A second scenario would be based on six areas: inside the Greenbelt, four areas
outside the Greenbelt - East, South, West, Kanata West and rural. Services that can be geographically-referenced
to support a large area-specific charge structure include: roads, sewers,
watermains, fire stations, police stations, most parkland development, branch
libraries, most recreational services below a city-wide level.
The Official Plan and
exisitng by-laws provide that particular portions of the city are not within
the service area for some municipal services.
As a result, people outside of the defined areas have not shared in the
cost of providing such services. This
is applicable to sanitary sewer and water services and this practice would be
continued.
iii) Implement specific
area rates for services that clearly benefit only a definable client group
Some growth-related
servicing projects are required solely for the benefit of a localized and
definable service area, for example, the construction of a storm water
management pond that provides a service to specific lands not previously
serviced. Such costs can be segregated
and allocated to specific benefiting areas.
This practice would be continued where a clear case can be made that it
is the most equitable practice.
e5) Discontinue non-statutory exemptions that
are not considered to warrant a tax-based subsidy.
Development charges can only
be based upon expected costs of defined growth-related municipal services. Where charges for categories of uses are
exempted or reduced, other categories of uses cannot be asked to make up the
difference. Some other means of funding
the services (other than grants and subsidies which are subtracted prior to assessing
a development charge) must be found.
The approach with regard to existing exemptions from the 1999 bylaws is
that, although legislated exemptions must continue, non-statutory exemptions
and/or reductions will be discontinued unless they carry out one or more of the
directions of the Ottawa 20/20 Plan and
they are considered sufficiently desirable (e.g. non-profit housing) to warrant
a tax-based subsidy.
f6) Continue to use the Infrastructure
Development Charges Price Index
In March 2003, Council
adopted a Statistics Canada Infrastructure Development Charges Price Index to
replace the use of the Statistics Canada Construction Price Index that is
legislated by the Development Charges Act, 1997. The new index was considered
to better reflect the growth-related costs for Ottawa. It would seem reasonable to continue to use
this index with the new bylaw.
2. ab) Timetable
for the Development Charges Review Study
Work
related to the new Development Charges Review Study has commenced. The project is
lead by
Development Services and a team from Corporate Services and involves the
efforts of most departments. Consulting services have also been retained for
specific areas of work. A Steering
Committee has been established for the project, consisting of managers and
directors from many areas of the Corporation.
This Committee is intended to ensure that there is corporate-wide
understanding and concurrence with the developmeng charges review process and timelines
and to review and approve of documents as they are prepared for Senior
Management, Committee and Council consideration. A Stakeholders' Group has been
formed to provide input into the process and feedback at key stages of the
review. A milestone work plan and
timetable for the Development Charges Review is attached in AppendixDocument 21 for information.
The critical points in the Review include: the timing of the adoption of the new bylaw, the formal public consultation process that will take place in the spring of 2004 and the preparation of the information for the public consultation process. Departments are currently preparing a list of projects that will be required to meet the needs of the population, household, employment and GFA projections for the next 10 years and, for hard infrastructure, for the lifespan of the Official Plan or build-out.
CONSULTATION
Before passing a
development charge by-law, Council is required to hold at least one public
meeting to review the draft Development Charges Background Report, Council report
and Development Charges Bylaw. The timelines of the Development Charges Review
Study work plan foresees this meeting to be held at the Corporate Services and
Economic Development Committee at the end of April 2004.. A minimum of 20 days notice of the meeting(s)
is required and the proposed by-law and background study are to be made
available to the public at least two weeks prior to the meeting.
Public notice
may be given by publication in a newspaper with sufficiently general
circulation.
Any person who
attends a meeting may make representations relating to the proposed
by-law. If a proposed by-law is changed
following a meeting, Council shall determine whether a further meeting is
necessary. Such a determination is
final and not subject to review by a court or the Ontario Municipal Board
Prior to the formal public consultation, a Development Charges Stakeholders’ Group has been established. The Stakeholders’ Group is comprised of interested representatives of the residential and non-residential development community, OCHBA and BOMA, citizen groups and the Greater Ottawa Chamber of Commerce. The Stakeholders’ Group is intended to provide an informal forum for input, liaison and feedback at key stages of the preparation of the Development Charges bylaw. Input into the general principles outlined in this report was solicited at the first meeting of the Stakeholders’ Group. The Group will be informed of the direction of Council with regard to these general principles.
FINANCIAL IMPLICATIONS
N/A
SUPPORTING DOCUMENTATION
Documentttachment 21 – Development Charges
Review Study Timeline of Work Plan
DISPOSITION
City staff to carry out the direction of Council with regards to the preparation of the Development Charges Review Study.
Document
1
DEVELOPMENT CHARGES PRINCIPLES Document 1
Development
Charges Review Study general principles
1) Capital costs for growth
must be self-supporting.
2) Implement Ottawa 20/20
Directions.
3) Build on the methodology
from previous bylaws.
4) Pursue
a rate structure that reflects the servicing characteristics and geography
of Ottawa.
4 - i) Implement
city-wide charges for those service areas that are appropriately funded by all
new development.
4 - ii) Implement
specific large area rates for services that can be assigned to general
geographic distribution areas.
4 - iii) Implement
specific area rates for services that clearly benefit only a definable client
group.
5) Discontinue
non-statutory exemptions that are not considered to warrant a tax-based
subsidy.
6) Continue to use the
Infrastructure Development Charges Price Index.
DEVELOPMENT CHARGES REVIEW STUDY
TIMELINE OF WORK PLAN Document 21
