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HomeMy WebLinkAboutFIN-10-092 - Development Charges By-law Amendment - Parking REPORT REPORT TO: Councillor B. Vrbanovic, Chair, and Members of the Finance and Corporate Services Committee DATE OF MEETING: June 14, 2010 SUBMITTED BY: Dan Chapman, General Manager of Financial Services and City Treasurer PREPARED BY: Dan Chapman WARD(S) INVOLVED: All DATE OF REPORT: May 27, 2010 REPORT NO.: FIN 10-092 SUBJECT: DEVELOPMENT CHARGES BY-LAW AMENDMENT (PARKING) RECOMMENDATION: THAT Report FIN 10-092 (the Development Charges Parking Amendment Background Study) dated May 27, 2010 and prepared in accordance with Section 10 of the Development Charges Act, 1997, be adopted; AND FURTHER THAT the proposed Development Charge By-law Amendment be approved in the form attached to Report FIN 10-092 BACKGROUND: Kitchener Council passed By-Law 2009-091 on June 22, 2009 to establish development charges for the City of Kitchener. The By-Law was based on a Development Charge Background Study (the original Background Study) in accordance with section 10 of the Development Charges Act, 1997 (the Act). An amendment to the By-Law is being proposed to reduce the charge for parking services. Kitchener Council will hold a public meeting on June 14, 2010 as required under the Act to allow the public an opportunity to review and provide comments on the Development Charges Parking Amendment Background Study (the amendment Background Study) and related By-Law amendment. REPORT: By-Law Amendment Process The Act allows the City to amend its existing Development Charges By-Law. Section 19 of the Act sets out the requirements related to this procedure. To amend the By-Law, the City must go through the same process associated with enacting a Development Charges By-Law. í ó ï First, the City needs to complete a background study outlining the purpose of the amendment and the rationale for the amendment. The background study must include: 1. Estimates of the anticipated amount, type and location of development for which the parking development charge can be imposed. 2. Development charge calculations for the parking service to which the development charge by-law amendment relates. 3. An examination of the long term capital and operating costs for capital infrastructure required for the parking service. The original Background Study, together with this report, serve as the amendment Background Study required under the Act. Second, the City has to hold a public meeting on the amendment, having provided three weeks’ notice of the meeting, and has to have made the amendment Background Study and proposed By-Law amendment available two weeks prior to the meeting. The Act allows for an amendment to be passed without exposing the unaltered portions of the By-Law to appeal. Therefore, only the amended section of the by-law is subject to appeal and consideration by the Ontario Municipal Board. Attached is a copy of the proposed Development Charge By-Law amendment. Purpose and Rationale for Amendment The original Background Study employed an average valuation of parking spaces that overvalued surface parking spaces and undervalued spaces in structured lots. Upon further analysis, the effect of using an average valuation was to overvalue the City’s total inventory of parking spaces. This resulted in a development charge for parking that was too high. The purpose of the amendment is to reduce the development charge for parking services to reflect the real value of the City’s inventory of parking capital assets. Recalculation of Parking Development Charge The parking development charge amendment calculations have been undertaken in accordance with section 5 of the Act. The growth forecast, including assumptions made about future occupancy of new housing units, used in the original Background Study has been maintained. The calculations are presented in a series of tables: Table 1 presents the data, including new capital asset value for parking spaces, used to used to determine the ten year historic service level and the calculation of the “maximum allowable” funding envelope for parking over the ten year period 2009-2018. Table 2 displays the growth-related capital program for the service as well as the calculation of the unadjusted development charge rates. í ó î Table 3 displays the cashflow analysis and the final development charge per capita. The resulting recalculated development charges for parking, including how they compare to the current charges, are as follows: Residential (per unit) Unit Type New Charge Old Charge Single or semi-detached $643.22$1,072.67 Townhouse or street townhouse $443.77$740.97 Multiple or duplex $364.50$607.86 Lodging House $192.95$321.77 Non-Residential (per sq.m.) Unit Type New Charge Old Charge All Non-Residential $4.89$8.15 All rates have been deflated by 5% as per section 21 of By-Law 2009-091. Subject to Council’s approval, the revised charge will come into effect on June 16, 2010. FINANCIAL IMPLICATIONS: A portion of the parking growth-related capital program will require funding from non- development charge sources. Of the $52.5 million net capital cost of the program to 2018, about $2.5 million will need to be financed from non-development charge sources over the next ten years. This includes about $1.2 million in respect of the mandatory ten per cent discount required by the Act for “soft” services and about $1.3 million for non-growth shares of projects relating to capital replacement. An additional $38.7 million share of the capital program relates to growth beyond 2018. This $38.7 million may be eligible for development charge funding in future development charge by- laws. However, interim financing of these costs may be required. Additional operating costs arising out of the parking growth-related capital program are anticipated to be recovered through future parking rate increases. COMMUNICATIONS: The Development Charges Parking Amendment Background Study was presented to the Waterloo Region Homebuilders Association (WRHBA) Liaison Committee at a meeting on May 28, 2010. In addition, notice of the June 14, 2010 public meeting was published in the Waterloo Region Record on May 22, 2010. ACKNOWLEDGED BY: Dan Chapman, General Manager of Financial Services and City Treasurer í ó í í ó ì í ó ë í ó ê í ó é í ó è í ó ç í ó ïð