County Development Charges Policy Revamp

Last month, Peterborough County Director of Finance Trena DeBruijn presented the summary of activity for the Development Charges (DC) revenue and expenses for 2020.  This is a mandatory report submitted to the Ministry of Municipal Affairs and Housing as required by the Development Charges Act.

Development charges are one-time fees imposed by municipalities on land developers, home builders and institutional developers when they build or develop new land.  They are designed to offset the increased pressure on municipal resources stemming from the influx of new residents and occupants of new buildings.  These charges fund infrastructure outside the development area itself.  Roads, water pipes and other infrastructure within the boundaries of developments are paid in full by the developer.  DC funds can be used to pay for services considered “hard’ such as roads, water and waste water facilities or “soft” services such as parks, libraries or recreation facilities.  For municipalities in Peterborough County, a portion of this revenue collected from growth within their borders is directed to the County.

Not all municipalities have developed policies to charge these fees.  Some have not seen the need due to a lack of opportunity to apply them because development activity in their neighbourhoods has been neglible.  This is not the case for Cavan Monaghan.  In 2019, the township directed $687,829 in development charge revenue to the County.  In 2020, the township directed another $933,911 to the County, representing 37.9% of the total DC revenue it received that year.  The calculation of the County share of DC revenue is mandated by the province.

The DC Report outlines in detail the capital expenditures that were funded by this revenue. They all relate to transportation infrastructure in roads or bridges across the County.  The DC funds allocated to each project are calculated on the net spend after first deducting other funding sources such as grants received or carry forward funds from prior years.  A total of $15,829,698 was spent on DC eligible projects in 2020, of which $3,219,795 was funded by DC revenues.  Of this amount, $168,368 funded County-wide expenditures such as culverts and contributions to studies.  From the remaining $3,051,427 spent on specific road and bridge projects, only $4,719 were directed to items within Cavan-Monaghan, the equivalent of slightly more than one fifteenth of one percent (0.15%) of DC revenues they generated for the County over the same period.

The distribution of DC-funded capital projects has been an area of concern for township officials for many years, and was the subject of two town hall meetings last year.  At the time, The Mayor and Deputy Mayor explained that they were willing to “take their turn” for infrastructure spending, understanding there is a broader picture to consider, but were seeking evidence of support to offset some of the pressure created by growth the township is currently experiencing.  New development may increase the tax base, but it also increases both capital and operating expenditures.    Our officials continue to press for a more transparent and balanced allocation of development charge spending at the County level- a request that has been heard if not yet addressed.

Historically, development has taken the form of small subdivisions and random severances, which were spread out across the rural countryside.  Changes to provincial policy has shifted development to the creation of larger, higher density neighbourhoods abutting established villages and hamlets.  The shift is motivated by a desire to protect farmland, create more efficient neighbourhoods and protect water resources, among others.  On the other hand, these large developments transform their host communities.  Careful infrastructure spending can mitigate the transportation issues they create.

A full study is currently underway to develop a new DC policy for Peterborough County. It provides an opportunity to establish guidelines that balance funding priorities necessitated by growth with the major transportation upgrades required by existing infrastructure.  It coincides with an update on the Transportation Master Plan where large infrastructure projects get in line for funding.  Both of these efforts will have a significant impact on capital spending in the County for many years to come.  Getting them right will do a great service to taxpayers. KG

The report is listed as 10b in the April 19th County Council meeting agenda found at  KG

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