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HomeMy WebLinkAboutCSD-17-102 - Performance Securities Policy Review - Deferred to January 8, 2018REPORT TO: Planning & Strategic Initiatives Committee DATE OF MEETING: December 4, 2017 SUBMITTED BY: Alain Pinard, Director of Planning, 519-741-2200 ext. 7319 PREPARED BY: Michael Palmer, Urban Designer, Planning,519-741-2200 ext. 7326 WARD(S) INVOLVED: All DATE OF REPORT: November 14, 2017 REPORT NO.: CSD-17-102 SUBJECT: Performance Securities Policy Review ______________________________________________________________________ RECOMMENDATION: Thatthe revised Council Policy I-1080- Performance Securities, asprovided in Appendix A of CSD-17-102, be approved. BACKGROUND: -1080) provides direction on taking performance securities (usually as a letter of credit) to ensure that sites are developed per their approved site plan. As part of site plan approval and condominium registration, Sections 41 and Section 51 of the Planning Act give a municipality the authority to enter into development agreements which typically include performance securities for the purpose of ensuring the completion of the site works outlined in the agreement. The purpose of this report is to update the Performance Securities Policy which was last updated in 2008, providing clarity to the policy and creating efficiencies for both the City and builder as summarized it this staff report. REPORT: The review of the Performance Securities Policy evaluated how to effectively address the following: Large-scale and multi-year construction projects; The alternative calculation for performance securities; How performance securities should address other aspects of site plan approval (such as elevations); Commitments to completing site works associated with condominium registration;and, Other minor revisions to update the policy to address efficiencies and current practices. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. 4 - 1 One of the primary reasons for this policy update is to better address large-scale and more complex developments which are becoming more common since the last update. Staff has found that the current policy is geared to one-building projects rather than multi-building developments that are constructed over several years. The updated policy supports a process for releasing site securities that is reasonable and efficient for the development industry while . Appendix A to this report includes the updated policy. Key changes to the policy include: Allowance for the performance security to be applied to future phases under separate site plan approvals (affecting large, multi-stage projects); Inclusion of Section 51 of the Planning Act to recognize holding of securities for the condominium registration process for site works not completed prior to registration; Clarification that performance securities collected may be applied to any portion of the outstanding site works and not just the itemized list of site works used for the calculation; Deletion of the alternative security calculation which is outdated and ineffective; and, Addition of the French language school boards to the list of exempt organizations from providing performance securities. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: through the delivery of core service. FINANCIAL IMPLICATIONS: There are no financial implications associated with this recommendation. COMMUNITY ENGAGEMENT: Over the course of a year and a half the building industry has been involved with providing feedback on the drafts of the updated policy. Through the Waterloo Region Home Builders Association (WRHBA) Liaison Committee, staff was able to address concerns and answer questions to move forward with the proposed policy. INFORM Distribution of draft policy to both the WRHBA Liaison Committee and the Grand Valley Construction Association. CONSULT Feedback was received mainly through the WRHBA Liaison Committee COLLABORATE Through recommendations and requests made by the industry, staff modified the original draft policy. A key topic for the building industry was that no additional financial costs should be incurred. This policy does not affect the amount of financial securities held by the City. CONCLUSION: The updated Performance Securities Policy provides additional clarity and efficiency to the policy for both staff and the development industry. No additional financial implications are proposed to either the City or the building industry. Components should, in fact, save applicants 4 - 2 time and money for larger projects in cases when a letter of credit is transferred between phases (if permissible by the financial institution) that are under separate site plan applications. Planning Staff recommend approval of the policy as outlined in the Recommendation section of this report. REVIEWED BY: Janine Oosterveld, Manager, Site Development & Customer Service Della Ross, Manager, Development Review ACKNOWLEDGED BY: Michael May, Deputy CAO (Community Services) Appendices: Proposed Performance Securities Policy 4 - 3 Appendix A COUNCIL POLICY RESOLUTION DATE: MARCH 1,1999 POLICY NUMBER:I-1080 amended: NOVEMBER 9,2000 amended: May 5,2008 DRAFT changes: November 14, 2017 POLICY TYPE: LAND USEPLANNING SUBJECT: PERFORMANCESECURITIES POLICY CONTENT: 1.That for development proposals approved under Section 41 and Section 51 of thePlanning Act the City may require the owner to provide performance securities prior to Site Plan approval and condominium registration in a form andamount satisfactory to the City Solicitor and the Manager of Site Development and Customer Service (or Alternate). Theperformance securities shall be held as security for the completion ofrequired site development works. 2.Performance Securities Calculation and Release a)The amount of performance security shall be based on a cost estimate of site development works completed to the satisfaction of the Manager of Site Development and Customer Service. b)The amount of the performance security shall be 50% of the total cost of all site development works except if the development is part of a proposed draft plan of condominium, in which case 100% of the total cost of all outstanding site development works is required prior to registration. c)After satisfactory completion of 50% of the value of site development works, the amount of security held by the City may be reduced upon acceptance of partial site certification, satisfactory inspection by the City, and inaccordance with the cost estimate. Note: partial releases do not confer final acceptance of site works and are at the discretion of the City. d)The performance security may not be reduced below 50% of the 4 - 4 total amount secured or $250,000, whichever is the lesser, until the City has received all required Site Development Works Notification Forms, received full certifications for all site works, and the City is in complete agreement with the certifications. e)While the cost estimate is based on a specific list of site development works, the site shall be constructed in full accordance with all approved plans and drawings, and the Section 41 or Section 51Agreement. Items reflected therein, but not specifically included in the cost estimate, are deemed to be required prior to the release of the performance security. The performance security may be applied to their completion in accordance with 2.f). f)The performance security is provided to ensure that the project is completed according to the approved plans and drawings, and in the timeframe described in the Site Plan Approval and/or Section 41 or Section 51 Agreement. The itemized cost estimate is for calculation purposes only. The total amount of the performance security may be used to complete any site plan deficiencies at the discretion of the Manager of Site Development and Customer Service. g)After satisfactory completion, full certifications for all site works, and the Citycomplete agreement with the certifications of all site development works, the totalamount of security held by the City shall be released. 3 & 4 \[relating to alternative security calculation - deleted\] 3.Phased Developments a)A performance security may be carried over to a consecutive phase if the subsequent phase requires a separate Site Plan Approval. A cost estimate of all site development works, in accordance with 2(a), is required for each phase to confirm that the performance security amount is adequate. b)The transfer of a performance security in part or whole to a subsequent phase may only occur after the original site development works have been completed in accordance with 2(c) and (d) under written direction by the property owner, to the satisfaction of the Manager of Site Development and Customer Services and City Solicitor. 4 - 5 4.Construction Supervision a)The property owner is required to retain the services of the project consultant team to provide construction supervision and inspections in accordance with Site Plan Approval and/or the Section 41 or Section 51 agreement. The project consultant team will ensure site development works are completed in accordance with approved plans and reports. b)The City may, at its discretion, inspect the work at any time and report any deficiencies to the consultant. 5.Performance securities shall not apply to the City or any local board thereof, theRegional Municipality of Waterloo or any local board thereof, theKitchener- Wilmot Hydro Inc., the Waterloo Region District School Board,the Waterloo Catholic District School Board,Conseil Scolaire de District Catholique Centre- Sud,Conseil Scolaire Viamonde , or the Federal or ProvincialGovernment or any crown agency thereof, or hospitals as defined in thePublic Hospitals Act, R.S.O. 1990. However, the applicable inspections and certifications would be necessary to deem the site complete in accordance with the approved plans. 4 - 6