Transcript Document

Sunshine Coast Regional District
Development Cost Charges
July 3, 2014 Infrastructure Services Committee
Bob Twerdoff
Background
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Opus DaytonKnight hired to prepare a Comprehensive
Regional Water Plan
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Plan was adopted by the Infrastructure Services Committee
in June 2013
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Opus DaytonKnight prepared a corresponding Business
Plan and Rates Development report which was adopted in
December 2013
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Remaining work is the preparation of a revised DCC Bylaw
to incorporate recommendations in these reports
How do local governments pay for
new infrastructure?
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Negotiate Development Agreements during rezoning
process
Require Servicing Agreements for frontage improvements
during subdivision or building permit process
Assess DCCs
Apply for grants, use Gas Tax Revenue
Use property tax revenue
Use contribution to capital in water user rates
What are DCCs?
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Used to pay for capital projects needed to support growth –
only projects which support growth are included
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Based on the ‘user pay’ principle
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Operations and maintenance and projects only benefiting
existing customers are not included
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Not just another tax – DCCs based on need, not on
comparisons to other local governments
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Development Cost Charge Best Practices Guide
Why are DCCs important?
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Used to fund infrastructure associated with growth
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Facilitates development by providing a method to fund
capital works
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DCCs allow development to proceed by sharing the burden
and pooling revenues (statutory reserves)
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Large infrastructure projects cannot be funded by a single
developer (e.g. Chapman Water Treatment Plant)
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Without adequate DCCs taxpayers pay for future needs or
infrastructure projects are deferred
How do existing rate payers
contribute?
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Parcel taxes
Utility rates – contribution towards capital
Rate payer’s portion of DCC projects ~ 37%
Municipal Assist Factor – 1%
Do DCCs affect housing
affordability?
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Housing prices based on market values – not costs
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Increased costs (DCCs, building materials, financing, etc.)
can impact Developer’s profit margin or willingness to pay
high raw land costs
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Draft bylaw provides incentive to build smaller units and
mixed use projects – townhouse and apartment DCCs
based on $/square metre rather than per unit consistent
with the Regional Sustainability Plan
When were DCCs last reviewed?
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First comprehensive review of DCCs since 1997 (17 years)
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Significant time between DCC reviews usually creates large
spikes in DCC rates
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Recommend review every 5 years, ideally minor reviews
with each Capital Plan – provides stability in the real estate
market
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First time the District has published list of DCC projects
and provided detail on how DCCs were derived – useful
communication tool
What are existing DCCs?
Land Use
Unit
Water
Residential
Lot
$1,650 to $3,000
Non-Residential
Building Unit
$1,650 to $3,000
What are the objectives of DCC
Review?
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Update DCC capital projects list to ensure future growth
needs can be met
Consider increases in construction costs
Review growth projections to ensure appropriate amount of
DCCs are collected
Ensure consistency with OCPs and Financial Plan
Combine three DCC Bylaws
Incentive to construct more sustainable smaller units
Clarify exemptions and DCC credits/rebates
Why prepare a DCC Background
Report?
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Provide SCRD Board, developers and residents with
information used to prepare DCC rates and how they are
calculated – important part of a transparent process
Supports Ministry of Community Services and Rural
Development approval process – required prior to bylaw
adoption
Used as a communication tool
Provides opportunity for constructive feedback
Used by staff when assessing DCCs
What are the proposed changes?
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Administrative
» Added definitions
» Changed how DCCs are assessed to reflect current
practices
» Separate multi-family rates based on unit size
» Credit for existing serviced lots
» Exemptions are clarified
» Added a 6 month grace period
Projects
» Incorporate recommendations in Comprehensive
Regional Water Plan
Rates
» Reflect current capital needs and associated growth
projections
What type of projects are DCC
projects?
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Only infrastructure needed to support growth
Projects which benefit existing customers are charged a
portion (37%)
Projects which benefit a single land owner are avoided
Infrastructure renewal, operating and maintenance costs
are not included
Infrastructure upgrades which do not benefit growth are
not included
What are the Major DCC Projects?
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Chapman Water Treatment Expansion
Transmission main upgrades
Fire protection upgrades
Distribution main upgrades
Intensive demand management programs
How are DCCs Calculated?
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Total DCC project costs
» Minus portion assigned to existing residents (37%)
» Minus existing DCC reserves (~ $800,000)
» Minus Municipal Assist Factor (1%)
Divide by growth
Capital $
---------Growth
What are the proposed DCC rates?
Regional
Eastbourne
Egmont/Cove Cay
Single Family/lot
$3,632
$5,951
$5,684
Townhouse/sq.m.
Apartment/sq.m.
$20.10
$30.42
$32.93
$49.84
$31.45
$47.60
Congregate Care/bed
$1,525
$2,499
$2,387
Commercial/sq.m.
$10.90
$17.85
$17.05
Industrial/sq.m.
$10.90
$17.85
$17.05
Institutional/sq.m.
$10.90
$17.85
$17.05
How does it compare to existing
rates?
Proposed
Regional DCCs
Existing DCCs
% Increase
since 1997
Single Family/lot
$3,632
$1,650 to $3,000
1.13% to 4.75%
Townhouse/sq.m.
Apartment/sq.m.
$20.10
$30.42
$1,650 to $3,000
$1,650 to $3,000
0% to 3.60%
(1.20%) to 2.30%
Congregate Care/bed
$1,525
$1,650 to $3,000
(3.90%) to (0.50%)
Commercial/sq.m.
$10.90
$3.30 to $6.00
3.50% to 7.30%
Industrial/sq.m.
$10.90
$3.30 to $6.00
3.50% to 7.30%
Institutional/sq.m.
$10.90
$3.30 to $6.00
3.50% to 7.30%
How can the impact be reduced?
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Short Term
» Grace Period – 6 months following bylaw adoption
» Apply for building permits before new DCCs come into
effect
» Incentive to construct multi-family units as rates are
proportionately lower
Long Term
» Lower raw land costs
What are the impacts of lower (old)
rates?
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Deferred infrastructure projects – Chapman Water
Treatment Plant at capacity
Greater share paid by existing rate payers
Developments postponed due to lack of capacity
Strong reliance on grant funding
DCC reserves not keeping up with costs/needs
What are the next steps?
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Modify draft DCC Background Report, if necessary
Commence public consultation
» Place draft report on website
» Initiate Engagement Plan: July 10 through September 12
Questions/Comments