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Non-DiscountedRoads and Related <br />ServicesSanitary Servicing <br />Watermains <br />Storm/Watercourse <br />Intensification Allowance <br />Engineering Studies <br />Public Works <br />Fire <br />Asummary of the DC Reserve Fund by Category of Service is found in Table A. <br />Determination of Development Charges: <br />A Development Charges Background Study is required to be completed when updating a <br />Development Charges by-law. The by-law is then valid for a period of up to 5 years. The Act <br />stipulates that the DC rates may be indexed, effective January 1 of each year that the by-law <br />remains in effect. As such, the City of Kitchener indexes the DC rates based on the non- <br />residential construction price index, as provided by Statistics Canada.The 2017 DC rates are <br />set out in Table B. <br />Revenue <br />DC collections in 2017 total $8.2M, a large decrease from the 2016 collections of $16.9M. Of <br />the total revenue, $7.4M was attributable to residential development and $0.8M was for non- <br />residential development. <br />During 2017, the City sold an additional 25% of its capacity at the Shirley Drive Pumping <br />Station. A portion of this payment (6.25%, representing a quarter of the 25% additional <br />capacity sold) was allocated to the DC reserve, and is noted as Other Revenue. <br />Expenses <br />Net DC expenses to December 31, 2017 total $10.9M. Detailed lists are included in the DC <br />Reserve Fund Transactions in Tables C, D and E. Since 2004, different rates have been <br />charged for the Central Neighbourhoods as compared to the Suburban Areas of the City (as <br />defined in the DC by-law). Related revenues and expenses broken down by service are <br />shown for both of these areas in Table E. <br />Expenses are allocated to either the Central Neighbourhood or the Suburban Area based on <br />whether the service is considered to be city wide, or related only to a specific area. If a <br />service is considered city wide, the expense is allocated based on estimated population growth <br />in each area as provided in the background study. <br />Reserve Fund Balances <br />The DC Reserve Fund at December 31, 2017 was in a deficit position of $5.6M compared to a <br />$3.4Mdeficit at the end of 2016. It is important to note that although the reserve fund is in a <br />deficit, the current financial position is stronger than what was anticipated in the 2014 DC <br />background study due in large part to the strong level of new construction in the community <br />IF3 - 2 <br />