Development charges back on the agenda at MV Council

At the Madawaska Valley Council meeting held on Feb.19 2019, a recommendation was made by both the Acting Treasurer and the CAO/Clerk that Council revisit the issue of raising revenue by bringing back development charges. Councillor Mark Willmer supported the recommendation, referring to his previous experience with development charges in other councils and municipalities. Following discussion, a Resolution was passed directing “the CAO/Clerk to bring an informational presentation outlining options and use of development charges and review different models for Council’s information.”

Almost two years later that Resolution was finally implemented at the meeting held on Feb.2, 2021 when a presentation was made to Council by Brian Whitehead, Principal/Planning Services at JP2G Consultants Inc. who are based in Pembroke. He commenced by summarizing the purpose of development charges; namely, “to pay for increased capital cost required because of the increased need for services arising from development.” The justification for this is that “existing taxpayers should not have to pay for the capital cost of growth” whereas “new taxpayers should not have to contribute more than their fair share of the capital cost of municipal services for new growth.” The relevant legislation first requires a background study to determine the eligible development charges that may be collected in order to recover the growth-related net capital costs of services over a ten year period.

Whitehead identified the eligible services as being:

  • General Government
  • Fire Protection
  • Transportation (Roads)
  • Recreation
  • Library

to which could be added Special Service Areas:

  • Sewer Service Areas
  • Water Service Areas

He also identified what options were available to Council in setting the charge rates. CAO Klatt asked him what the cost of a background study would likely be and was told that they vary depending on what was included but could be up to $30,000 if they included water and wastewater services. He pointed out the study is good for five years and the municipality can recover its cost through future development charges; for example, at the building permit stage. Willmer asked him at what point can you tell that the study will pay for itself. Whitehead’s response was that a municipality has limited sources of revenue and that this is just one. His advice was that in the current environment he thinks it is worth doing.

Councillor Carl Bromwich, who is on record as opposing development charges, asked Whitehead, “Have you experienced any public meetings where there is a bit of a backlash against Council for suggesting these charges?” Whitehead said no, and also that it was very rare for a development charge By-Law to be appealed because the charge is levied at the building permit stage. He said typically the charges amount to approximately $3,800 to $4,000. This prompted Bromwich to note, “Is this on top of a building permit charge of, say, $1,500 — you’d add that on? It doesn’t really sound like a welcoming statement for people trying to build in your township. We’re trying to build a bigger tax base.”

Whitehead answered by pointing out that it gets incorporated into construction costs.

Bromwich persisted that it would compound pushback about the services people feel they deserve for the money they pay. “There’s gotta be a hard sell there.”

Whitehead countered, “I have never seen development charges slow development down. It hasn’t slowed Petawawa down. The places that charge the most seem to have the most growth as well.”

At the conclusion of the presentation, Klatt thanked Whitehead for providing his orientation for staff and Council and said that the next step will come from staff meeting to see if there is a report they can bring forward to Council to see if there is a wish to proceed.

photo CanIndia News

4 Comments

  1. Barbara Cardwell

    I agree with Dan – this should have been a slam-dunk. Development fees are a pittance in the overall cost of building, and help the township cover the costs of providing future services.

  2. Dan Olshen

    Kudos to Brian Whitehead from JP2G Engineering for presenting such a compelling argument on “Capital Development Charges”. Thumbs down to the Captain of the rudderless ship, i.e., Mayor Love and the buffoonery of Councilor Carl Bromwich. This should have been a “slam dunk” decision spearheaded by the Mayor.
    As Councilor Willmer so adroitly pointed out: “Greenfield Municipal Expansion” is subsidized by levies incorporated into development charges in all visionary municipal jurisdictions such as in the County domain in the developments in the northern segment of Arnprior or as Whitehead noted in the Town of Petawawa. The current residential tax base is not sufficient to cover the costs of the many ancillary services associated with new residencies such as the residual 5 main components and most financially significant being the awfully expensive capital cost expansion for special services like storm water, sewer, water services. waste disposal etc. For example, maintaining the bearings on turbines and the filtering for chlorination in the water services are onerous enough for the residents to support but try adding new Toshiba turbines or larger Honeywell chlorinators and filters to accommodate new residencies and businesses and the costs of these attributes rise linearly or in significant multiples. Does Mr. Bromwich think that the addition of a new nuclear reactor to provide a larger generating capacity in Pickering is absorbed solely by the residents in Oshawa, Whitby, Bowmanville, Port Perry.
    One could write a tome on the justification for incorporating or at least defraying some of the capital costs associated with “Greenfield developments”. However, they are so aptly summarized by the Whitehead counter to Bromowich . “I have never seen development charges slow development down. It has not slowed Petawawa down. The places that charge the most seem to have the most growth as well.”
    Hopefully, we have the wisdom of sober-minded and forward-thinking councilors like Willmer, Shulist and Peplinski to endorse the obvious and to enhance the sustained growth and prudent fiscality of the MV.

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