Development Charges Update

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The most recent Council meeting included a Public Meeting to review a report authored by Gary Scandlan of Watson and Associates outlining an update to the development charges levied by the township on new development or lands subject to redevelopment. 

Scandlan provides assistance to the municipality for development policies as well as issues such as annexation implications.  This Update Study was required to allow the township to recover past expenditures related to growth studies that had been omitted in the establishment of the current 2015 Development Charges by-law by allowing Council to consider a revision to the existing Development Charge by-law which will be considered next month.

Development charges are paid by developers and home builders and are reflected in the selling price to buyers to ensure that people who purchase new homes are paying for the costs of new supporting infrastructure.  The intention is to prevent existing ratepayers from bearing the cost of new development, so growth “pays for itself”.  Municipalities establish their own development charge schedules based on current educational levies as well as local servicing costs following a process outlined in the Development Charge Act of Ontario.  The municipal bylaws that establish these charges must be supported by a current background study, which outlines the estimated amount, type and location of development within the municipality, and the related calculations of how the new development will affect municipal services.

By-laws establishing these formulae must be revised at least every five years to ensure they reflect current cost realities, and revisions are preceded by mandatory public meetings.  The township’s current development charge by-law came into effect in June 2015 and includes an indexing feature, so that rates rise each January in step with changes in Statistics Canada Construction Price Statistics.  This indexing has resulted in an 8.2% increase in 2018 over the original rates established in 2015.

Provincial legislation also regulates how revenue from these charges can be used.  Funds received through development charges pay for increased capital costs related to infrastructure required to service more homes and businesses as they move into the municipality.   For example, development charges for the new Towerhill development on Fallis Line include an allocation to contribute to the construction of new water and wastewater plant to which the new homes will connect.   Costs eligible for recovery also include capital costs that are within the development, such as internal roads and sidewalks supporting a new subdivision, but also improvements outside the area where increased use will result from its creation.  The revenue may also be directed to soft services like new municipal recreation centres and libraries.

Specific infrastructure expenditures required for a new development also form part of the development charge.  For the Towerhill development, capital improvements to be absorbed by its developer include road improvements along County Road 10 such as the addition of left turn lanes and eventually signal lights, as traffic flows rise along that corridor.

Development charge calculations for all new building permits include allocations for township-wide services including roads, fire and police protection, recreation services, library services and administrative studies related to development.

Incorporating the proposed adjustment for the excluded studies and indexing, municipal development charges will be $10,672 under the revised by-law for single and semi-detached dwellings across the township in 2018.  Development in the Millbrook area including Towerhill attracts an additional $8,415 for water and waste-water services, bringing the total development fee for a single or semi-detached dwelling to $19,086.  In addition to the municipal component, each residential permit is subject to a Peterborough County levy of $7,780 and an educational levy of $1,738.

Should the revised calculation be approved, Millbrook development charges totally $28,604 will rank 5th out of 13 surrounding municipal areas, with Clarington at the top charging $47,090 and Douro-Dummer at the low end of the scale with a charge of $13,518 in 2018. KG

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