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HomeMy WebLinkAboutCSD-11-155 - Kitchener Growth Management Plan (KGMP) - UpdateStaff Re vet ~ITCH~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca REPORT TO: Planning & Strategic Initiatives Committee DATE OF MEETING: November 7, 2011 SUBMITTED BY: Alain Pinard, Director of Planning PREPARED BY: Alain Pinard, Director of Planning (519-741-2319) Brandon Sloan, Manager of Long Range & Policy Planning (519-741-2648) WARD(S) INVOLVED: All DATE OF REPORT: November 1, 2011 REPORT NO.: CSD-11-155 SUBJECT: Kitchener Growth Management Plan Fall 2011-Fall 2013+ UPDATE RECOMMENDATION: That the Kitchener Growth Management Plan Fall 2011-Fall 2013+, as attached to Community Services Department report CSD-11-134, be approved subject to the following revisions: a) That the pumping station symbol be removed from Parcel #90; and, b) That the priority assignment be revised for the lands at the northeast and southeast corners of Bleams Road and Fischer Hallman Road that include Parcels 122, 123, and 125 from Priority C to Priority B with the following condition: That the affected landowners provide for sanitary servicing arrangements that do not require the extension of a trunk sewer, do not negatively impact natural heritage features, and that still achieve the urban form and design objectives of the Rosenberg Secondary Plan, to the satisfaction of the City and any other impacted agency; and further, That staff be directed to report back in the fall of 2012 with a status update on the Development Charge Reserve Fund as well as the timing and the scope of work for updating the Development Charges By-law and associated processes. BACKGROUND: This report provides supplementary information and an updated recommendation to Report CSD 11-134 that was presented at the October 17t", 2011 meeting of the Planning & Strategic Initiatives (PSI) Committee. 2-1 Staff Re vet ~ITCH~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca REPORT: The Kitchener Growth Management Plan (KGMP) Fall 2011-Fall 2013 was presented and discussed at the October 17t" PSI Committee meeting. The item was deferred to allow additional opportunity to review and consider the information presented at the Committee meeting. In the week following the meeting, Planning and Engineering staff met with the landowners that appeared in delegation to request a Priority B instead of Priority C assignment. The information gathered at these meetings was shared and reviewed with Finance staff, and other members of the internal working group were consulted where appropriate prior to the preparation of this report. The report that follows provides additional information and commentary on items raised at the October 17t", 2011 PSI Committee meeting or the landowners meetings of the following week. Pumping Station Symbol in Parcel #90 This symbol can be removed from the mapping as it has now been clarified that only one future pumping station (located near Parcel #97) is required for this portion of Doon South. This information is outlined in the Doon South Wastewater Servicing Facility Environmental Assessment (2009). Bleams Road/Fischer Hallman Road Parcels New information was submitted to indicate that it may be possible to service these lands for sanitary sewage through the Huron Business Park instead of relying on the extension of the Middle Strasburg Trunk Sanitary Sewer. Additional analysis and review is required to confirm the technical feasibility, grading implications, environmental impacts and urban form/design considerations. Engineering has indicated that this could be considered over the coming 2-year timeframe and, as a result, the lands could be considered as a Priority B conditional upon not requiring the extension of major infrastructure and subject to the approval of the engineering solution by all applicable agencies. The benefit of this potential option, if feasible, is that it would advance land for development that would generate development charges revenue without needing new major infrastructure that is paid for from the development charge reserve. 12 Parcel #30 -Huron South Community The owner of this parcel appeared in delegation requesting that a portion of this property be assigned a Priority A instead of a Priority B because it could be serviced by gravity into an existing sanitary collection system instead on relying on the extension of the South Strasburg Sanitary Sewer. Engineering has confirmed that a portion of Parcel #30 can be serviced for sanitary sewage by gravity into an existing collection system and that the details would be resolved during the development approval process. As such the Priority B assignment remains appropriate. The lands are not "ready to go", however, the Priority B assignment poses no impediment to completing the development approvals, including building permits. 2- 2 Staff Re vet ~ITCH~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca Requests for Priority C instead of Priority 8 Planning and Engineering staff met with the delegations who requested Priority B instead of Priority C for their lands. The subject properties are located in two clusters, one in Doon South Phase 2, and the other in the northern portion of the Rosenberg Community. Each delegation clarified and supplemented the submissions made on October 17th. Some of the points raised include: • All wanted a Priority B assignment because it would allow them to discuss and/or proceed with a Development Charges Credit Refund Agreement for new infrastructure. • Commitment to proceed with a Credit Refund Agreement varied. All wanted the option of being able to proceed with an agreement within two years, but only one landowner was fully committed to construct the infrastructure immediately or in the very near future. • At least two landowners identified site development issues and approvals that would take approximately 18 months to sort out before being in a position to service their lands. • One landowner representative mentioned that it does not make economic sense to enter into a Credit Refund Agreement until a parcel of land has been draft approved (for subdivision). It is noted that the parcels in the Rosenberg cluster do not have draft approval. • All expressed concern with the shortfall in the development charge reserve fund outlined in Report FCS-11-171 and encouraged the City to explore remedies. Some landowners offered several suggestions such as reopening the current development charges by-law, reconsidering downtown exemptions, and changing when development charges are collected during the approval process. These suggestions require more time to study. • As a result of concern with the development charge reserve, all expressed concern at the City's ability to credit and/or refund development charges in a timely fashion. Some landowners even commented that they would not enter into an agreement where the timing of repayment is dependent upon projected revenues (repayment date uncertain). It is noted that Kitchener's template agreement and policy do not guarantee firm repayment dates but commit to refund only if the respective portion of the reserve has a positive balance as of the specified repayment dates. • Only two landowners expressed a clear interest into making contributions toward community infrastructure, acknowledging that it takes more than engineering infrastructure in order to develop a complete community. • Landowners from both clusters correctly noted that the sanitary sewer infrastructure for their respective areas (Pumping Station and Forcemain for Doon South Phase 2 and Middle Strasburg Trunk Sanitary Sewer extension for part of Rosenberg) was projected to take place before 2019 in previous Capital Forecasts. • All noted that development of the lands will generate revenue through development charges, property taxes and user fees. • Several comments on how and why some greenfield land is "tied up" and not immediately available for development. • Several comments on the anticipated increase in demand for greenfield land in Kitchener due to a rapidly diminishing supply in Cambridge and the City of Waterloo. • Several comments on how certain lands are inter-related and that they should be assigned the same priority status. • One landowner commented that a Priority C assignment is a competitive disadvantage relative to Priority B properties, even if the servicing situations are different. The same landowner also mentioned that a Priority C assignment makes it more difficult to market property, especially the commercial parcels. 2-3 Staff Re vet ~ITCH~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca • One landowner commented that two years (interval between KGMP updates) is a long time to wait to have a conversation about a Credit Refund Agreement. • One landowner commented that builders have contributed to the development charge reserve fund in the past in other areas of the city so it is not unreasonable to expect to draw from the fund now. The staff response to these comments is as follows: A Priority C assignment poses no impediment to completing development approvals. The only real advantage with a Priority B instead of a Priority C is the eligibility (not guarantee) of being able to enter into a Credit Refund Agreement. As noted above, commitment to proceed with an Agreement varied and most of the affected landowners wanted to see changes to the credit refund process and/or a more positive development charge reserve before committing to a Credit Refund Agreement. As a result it is recommended that staff report back in one year with an update on the status of the development charge reserve by which time it will have had the opportunity to review some of the suggestions that were made regarding Kitchener's development charges process. There is an important distinction between Priority B and C properties in this edition of the KGMP. Priority B properties either do not require any major engineering infrastructure or the required engineering infrastructure is scheduled for the near future in the Capital Forecast. All Priority C properties require engineering infrastructure that is scheduled for 2017 - 2019. There are sufficient Priority A and B properties to generate typical development charges revenues in the next two years and by avoiding the expenditures required for Priority C properties, there is a reasonable chance that the development charge reserve balance will improve. Staff agree with the comment that inter-related lands should be assigned the same priority status. In the context of this edition of the KGMP, this means that the Rosenberg cluster noted above should be treated as a single entity for prioritization, as should the Doon South cluster. It also means that co-operation between landowners within an individual cluster is likely to be needed in order to finalize a Credit Refund agreement. While there is no indication that this cannot be achieved, it does reduce the likelihood of finalizing agreements for these areas in the next two years, especially where commitment levels vary and where there is concern with the development charge reserve. It is a common misconception that development charges pay for future services. While this may have been partially true in the past, it is not the reality in Kitchener now or for the foreseeable future. Going forward, development charges will generally pay for services that are already in place that facilitated past developments. By deferring expenditures on Priority C properties, the City of Kitchener would be addressing past commitments before taking on more commitments and increasing the deficit. Landowners correctly identified the revenues that would be generated by opening up their respective lands for development. Much less information was presented on the costs. There are both capital and operating costs to new development. Both of the aforementioned clusters require infrastructure and community amenities that cost more than the development charges revenue that will be generated by any one development in 2-4 Staff Re vet ~ITCHI~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca its entirety or from combined portions of developments over for a period of several years. Opening up these areas now would increase the deficit in the development charge reserve fund. More infrastructure would have to be paid down from a revenue base that is not expected to grow substantially. Simply registering several additional lots will not have a positive impact on the development charge reserve fund. Development charges are currently collected at the time of building permit and there is no reason to expect that the Kitchener market can absorb substantially more than recent past performance, which is consistently in the range of 1,200 - 1,500 new residential units per year. New development also increases operating costs that include such things as snow ploughing, parks maintenance and the staffing of fire halls and community centres. New assessment revenue does help offset those costs, however there are inefficiencies if growth is too spread out geographically. The rate of growth of the residential assessment base is expected to remain relatively constant (1,200 - 1,800 new residential units per year) and that revenue will go a lot further if delivering new services to a few new areas instead of many more new areas. A detailed cost-revenue analysis would be helpful in quantifying the impacts of different growth options. However, the city currently does not have the in-house resources to conduct such an analysis. In addition to impacting operating costs, growing in too many new areas at once increases the gap of time between the installation of hard services and the construction of community amenities (parks, libraries and community centres). In other words, it will take longer to achieve complete community status after people start moving in, and community concern about delays in constructing community amenities is one of the major reasons why the City of Kitchener initiated changes to its growth management program in 2007. Finally, advancing all of the Priority C lands to Priority B status would not be sustainable unless some Priority A and B lands were demoted in status or put on hold. Collectively, the lands recommended for Priority B and C account for approximately 15 years of development land (50- 80% of remaining greenfield supply). By allowing all of these lands to be serviced and processed for planning/development approvals in this edition of the KGMP would mean that we would be attempting to prepare 15 years of land in two years. The recommended KGMP already enables somewhere in the range of 7,500-10,000 new dwelling units on Priority A and B lands that will require staff resources to bring on stream (development/planning approvals, legal/financial agreements, etc.). ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: This project directly supports the community priority of `Development', specifically Strategic Directions #1 and 3. FINANCIAL IMPLICATIONS: A significant part of the consideration of this report deals with financial implications. Changes to the KGMP may impact the timing and/or financial implications of infrastructure and non- infrastructure projects that are in the Capital Budget Forecast and funded through development charges. The City portion of the development charges collected with new development is attributable to many different components (not just sanitary sewer infrastructure). There is not a 2-5 Staff Re vet ~ITCH~I~TE~ CommunrtyServicesDepar~men~ www.kitchenerca detailed revenue-expenditure breakdown for each growth area (development charges are generally not area specific in Kitchener). The addition of more lands/priorities would add to the already significant number of projects underway or planned in the next two years and affect resource availability. Ultimately, this could result in the addition of more roads to plough, parks to maintain, operation staff to hire and equipment to acquire sooner than perhaps expected or the ability to handle/fund. Further, it is increasingly questionable whether the City portion of the property tax generated from some of the new residential areas would be adequate to sustain the maintenance and life-cycle replacement costs. The impacts on operating budgets are always an issue during the annual budget cycle. This may be part of a larger funding shortfall issue for municipalities. COMMUNITY ENGAGEMENT: Additional meetings were held with landowner representatives seeking a Priority B instead of Priority C. CONCLUSION: In summary, the recommended approach of this edition of the KGMP is to focus city resources on preparing land for development in areas that do not require major new infrastructure or where the required engineering infrastructure is scheduled for the near future in the Capital Forecast. This is consistent with one of the most well known growth management principles, which is to make use of existing infrastructure first. There is sufficient land assigned Priority A and B to maintain or exceed growth levels of recent years. This growth combined with less new expenditure will have a positive impact on the development charge reserve fund. Several stakeholders expressed concern with the shortfall in the development charge reserve fund and encouraged the City to explore remedies. As a result it is recommended that staff report back in one year on a variety of matters related to development charges. REVIEWED BY: Grant Murphy, Director of Engineering Ryan Hagey, Manager/Interim Director of Financial Planning ACKNOWLEDGED BY: Jeff Willmer, Deputy CAO Community Services Department 2-6