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HomeMy WebLinkAboutFCS-14-088 - Development Charges By-lawStaff Report rTC.�r R finance and Corporate Services Department www.kitchener.ca REPORT TO: Committee of the Whole DATE OF MEETING: May 26, 2014 SUBMITTED BY: Ryan Hagey, Director of Financial Planning 519- 741 -2200 x 7353 PREPARED BY: Ryan Hagey, Director of Financial Planning 519- 741 -2200 x 7353 WARD(S) INVOLVED: All DATE OF REPORT: May 21, 2014 REPORT NO.: FCS -14 -088 SUBJECT: Development Charges Bylaw RECOMMENDATION: THAT the proposed Development Charges Bylaw in the form attached to report FCS -14 -088 be amended as outlined in Appendix B; THAT the amended Development Charges Bylaw be approved; THAT the industrial development charge rate be reduced by 50% as shown in Table 2 for the period of July 1, 2014 to March 1, 2019, provided the Region of Waterloo reduces their industrial development charge rate by 50 %; THAT an industrial development charge exemption reserve fund be created to fund the 50% reduction in the industrial development charge rate; AND FURTHER THAT staff be directed to hold no additional public meetings regarding the passage of the Development Charges Bylaw. BACKGROUND: Council has already considered development charges through the presentation of report FCS - 14 -054 (Development Charges Background Study and Bylaw). During discussion of this report at Special Planning & Strategic Initiatives Committee, staff were directed to provide follow up information on: • Comparative development charge rates for other municipalities Projects that were removed between initial preparation and final presentation • Process to be used for funding southwest recreation facilities sooner than shown in the background study • Potential ways to further incent industrial growth In addition to these four items, staff have met with industry stakeholders and are recommending some minor wording changes to specific clauses of the Development Charges Bylaw. 4. -1 The remainder of the report will address each of the development charge (DC) follow up items and the wording changes in the bylaw. REPORT: Comparative development charge rates for other municipalities The graph below shows how Kitchener's development charge rates compare with rates of other municipalities. For each municipality, the total municipal charge payable —upper and lower tier —is displayed. The current charges in the cities of Kitchener, Waterloo, and Cambridge are shown as well as the charges that would be payable in the cities if the City of Kitchener and Region of Waterloo adopted the maximum permissible charges set out in their recently released DC background studies. Based on the maximum permissible charges, Kitchener's residential suburban DC rate for singles and semis would be lower than most Greater Toronto Area cities and would be the lowest in the Region of Waterloo. $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $n ��C. bx0 � e° Residential DC for Singles & Semis ,,e k" � �a V ��p XN��� Wpperfier k,, lLower /Single Tier Proiects that were removed between initial preparation and final presentation While the background study was still in preparation, Council was provided with estimated capital costs. Upon further review by industry stakeholders and staff, some hard service projects were removed from the background study, while some other projects had costing revised based on additional information. The table below summarizes the hard service projects that were removed, primarily because the benefits of the projects were considered to accrue to development beyond the 2031 planning horizon. 4. -2 DC Project # Description Gross Cost SA5 Doon South Sewage Forcemain $8,800,000 SA12 Pioneer Drive Trunk Sewer $2,600,000 SA17 Victoria St. N. Sanitary Pumping Station Storage Facility (Manches $3,900,000 R3 Blair Creek Drive $3,700,000 W2 Blair Creek Drive Watermian $600,000 Process to be used for fundina southwest recreation facilities sooner than shown in the background study Included in report FCS -14 -054 was a table showing the projected timing of indoor recreation priorities. The priority is consistent with what was approved by Council as part of the Leisure Facilities Master Plan, but there was a request to investigate ways to advance some of the recreation facilities planned for southwest Kitchener. There are three funding options that should be considered and are detailed below. Option 1 — DC recovery from oversized facilities As has previously been noted to Council as part of the DC process, there are some large facilities included in the 2014 DC background study that were growth related, but not funded from DCs to the extent they could have been because of limits imposed by the regulatory calculation. These facilities include the Main Branch Library, the Kitchener Operations Facility, and two parking structures (Charles & Benton, Civic District). Funding sources other than DCs were used to fund these projects (e.g. taxes), but the DC costs will start to be recovered during the upcoming 2014 DC bylaw. As these DC costs are recovered throughout the term of the 2014 bylaw, DCs will pay back the other funding sources (e.g. taxes), which could potentially be a funding source for accelerating the timing of the southwest recreation facilities. Option 2 — Federal Gas Tax As part of the New Building Canada Plan announced earlier in 2014, the Government of Canada has reaffirmed the Gas Tax Fund (GTF) for the next 10 years. In addition to committing to the GTF on a long term basis, the Government of Canada has also committed to indexing the GTF going forward (beginning in 2016) and has increased the categories what GTF can be applied. Recreation is one of the new categories that has been made eligible for GTF and could potentially be a funding source for accelerating the timing of the southwest recreation facilities. Option 3 — New Building Canada Fund As part of the New Building Canada Plan announced earlier in 2014, the Government of Canada has created the New Building Canada Fund (NBCF) which provides funding to support infrastructure projects of national, regional and local significance that contribute to objectives related to economic growth, a clean environment and stronger communities. Unlike the Gas Tax Fund mentioned above, recreation is not an eligible category for the NBCF. NBCF is more focused on hard infrastructure components such as roads and sewers, which could also be used to provide the site servicing components of the southwest recreation facilities. The use of the funds for options 1 and 2 will be a significant component of the 2015 capital budget process. Staff will facilitate this discussion with Council who will be able to see all of the capital priorities (DC related as well as the non -DC related) competing for these funds. Option 3 is expected to be considered by Council in June, when staff bring forward a report recommending projects to be put forward to the NBCF. 4. -3 Potential ways to further incent industrial _-ggrowth Manufacturing remains an integral part of the regional economy, accounting for 56,000 jobs and 22% of the GDP in Waterloo Region. DCs are a significant part of the overall project costs to build a new manufacturing facility, and can adversely influence a Manufacturer's decision to locate or expand. As Manufacturers operate globally, competition is intense with other jurisdictions that are providing significant financial inducements at the municipal and provincial /state level. Many local Manufacturers are using up their excess operating capacity, so any beneficial changes to the DC bylaw will encourage them to expand their existing facilities or be more attractive to new Manufacturers locating in Kitchener. Each new manufacturing position creates a multiplier effect of five spinoff jobs, and for each new automotive manufacturing position up to nine spinoff jobs. It is estimated that the build out of Kitchener's existing industrial greenfield land would create an additional 2,200 direct manufacturing jobs and 11,000 spin off jobs. As part of report FCS -14 -054, Council approved updating the definition of an existing industrial building to reflect the gross floor area as it existed on June 1, 2014 (instead of January 1, 1999). This wording update is important, because existing industries are allowed to expand by 50% without paying additional DCs. In addition to this progressive wording change, Council asked staff to investigate other ways to further incent industrial growth and determine how this may be funded. City of Kitchener staff have been in contact with Region of Waterloo staff regarding DC rates for industrial development. It is the understanding of City staff that Regional staff are recommending a 50% exemption to the industrial DC rate (other non - residential development would pay the full non - residential DC rate). City staff recommend matching the Region's 50% industrial rate exemption on the City's industrial DC rate during the 2014 DC bylaw, which will significantly reduce the overall cost for new industrial development over the next five years. By matching the Region's proposal the exemption would be relatively easy to administer and, from the perspective of those paying the charge, easy to understand. The two graphs below show the industrial DC rates for a number of large municipalities including Kitchener. The first graph shows the rates if both the City of Kitchener and Region of Waterloo were to approve the maximum allowable charge as calculated in their recent background studies. If this were to happen, Kitchener's industrial DC rate would be higher than many of the comparator municipalities. The second graph shows the rates if both the City of Kitchener and Region of Waterloo were to approve a 50% reduction to the industrial DC. If this were to happen, Kitchener's industrial DC rate would be lower than many of the comparator municipalities. C�AI $25 Industrial DC Rate per Square Foot $20 $1',5 $To $5 $0 • $25 $20 $15 $10 $5 $0 W Upper Tier m Lower/Single Tier SOS HOC �� � C; C, d � �a ycP eye any ` e Cr W Upper ller u Lower/S ingle Tier 4. -5 G��` � $25 $20 $15 $10 $5 $0 W Upper Tier m Lower/Single Tier SOS HOC �� � C; C, d � �a ycP eye any ` e Cr W Upper ller u Lower/S ingle Tier 4. -5 Regarding funding, a discretionary exemption of this kind would need to be funded by non -DC sources (e.g. taxes or utility rates). Over the five -year term of this bylaw, the total expected cost of providing a 50% exemption (based on projected development) is $900,000. The actual timing /amount of any exemption is unknown as it will depend on actual development that qualifies for the exemption. The industrial exemption will be for services that are otherwise funded by the tax base as well as utility rates. The table below outlines the various funding components and their share of the exemption. Proportionate Share of Projected Industrial Exemption Costs As the timing /amount of any exemption is unknown, staff are recommending that a separate reserve fund be created to fund the 50% reduction to the industrial DC rate (Alternative 1 in the table below). This approach is different than the downtown exemption, as there is less concern about a potential "run" of industrial building permit applications immediately prior to the sunset of the reduction to the industrial DC rate. The table below outlines a number of possible funding solutions and identifies pros and cons for each alternative. Alternative 1 Rate %age Exemption Cost Taxes $ 39.28 72.5% $ 900,000 $ 653,000 Sanitary $ 10.56 19.5% $ 900,000 $175,000 Water $ 1.43 2.6% $ 900,000 $ 24,000 Stormwater $ 2.90 1 5.4% $ 900,000 $ 48,000 Total 1 $ 54.17 100.09/6 Alternative 2 1 $ 900,000 As the timing /amount of any exemption is unknown, staff are recommending that a separate reserve fund be created to fund the 50% reduction to the industrial DC rate (Alternative 1 in the table below). This approach is different than the downtown exemption, as there is less concern about a potential "run" of industrial building permit applications immediately prior to the sunset of the reduction to the industrial DC rate. The table below outlines a number of possible funding solutions and identifies pros and cons for each alternative. Alternative 1 Fund from a new Industrial DC Exemption Reserve Fund Summary Create a new reserve fund which has a set amount of funding transferred to it based on the projected funding requirement. Funding would come from capital close outs from both the tax base and utilities. Pros . Transparent - separate account will ensure the funds are used as intended • Funding split between tax base and utilities ensures that utilities also pay a portion of the exemption cost • No projected impact on the tax /utility rates • Annual reporting to Council as part of the reserve fund balance review • Easy to administer Cons . Capital closeouts used to fund this reserve fund would not be available to fund other capital priorities Alternative 2 Fund from tax/utility operating budgets Summary Budget for the annual estimated cost of providing this exemption as part of the tax supported and utility operating budgets. Actual costs are charged to these budgets as they are incurred. Pros . Funding split between tax base and utilities ensures that utilities also pay a portion of the exemption cost Cons . Increased impact on tax /utility rates • Funds would not carry over from year to year which would create surpluses in some years and deficits in others 4. -6 Alternative 3 Summary Fund through a notional tax increment For each industrial exemption, charge the costs to an account and then recoup those costs in the future from the additional property taxes generated by that industry Pros . Exemption costs are recouped from the specific industry that benefitted Cons • Significant timing delay between when the grant is approved and when the funds are collected • Does not allocate any of the costs to utility rates, even though a portion of the exemption is attributable to the utilities • Potentially difficult to administer • Reduces future assessment growth used to fund costs of service growth and other budget priorities Minor wording chances to specific clauses of the Development Charaes Bvlaw Throughout the development charge process, staff have been engaged in dialogue with industry stakeholders. As was noted in the previous development charge report (FCS -14 -054), staff had already incorporated industry stakeholder feedback into the proposed background study and bylaw. Since presentation of report FCS -14 -054 to Committee, staff have continued to engage industry stakeholders and as a result of this dialogue are proposing some minor wording changes to specific clauses in the Development Charges Bylaw. Unless noted in Appendix B, the bylaw is unchanged from the version that was provided to Committee with report FCS -14- 054. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Goal: Financial Management Strategic Direction: Reduce reliance on taxes Community Priority: Development Goal: An aligned strategy FINANCIAL IMPLICATIONS: The proposed DC rates, including the proposed 50% industrial exemption are shown in Tables 1 & 2. COMMUNITY ENGAGEMENT: Inform and Consult — This report has been posted publicly as part of the agenda to inform the public about the proposed development charge rates and bylaw. Staff have provided DC information to industry stakeholders, have responded to multiple questions from this group of stakeholders and have incorporated their feedback into the DC background study and bylaw. ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services) Attachments Appendix A — Tables 1 & 2 — Development Charge Rates (Residential and Non - Residential) Appendix B — Development Charges Bylaw Amendments Appendix C — Draft Development Charges Bylaw 4. -7 Table 1- Development Charge Rates (Residential) 4. -8 Residential Charge By Unit Type Singles & Semis Townhouses Multiples &Duplexes Lodging Houses Service Central Suburbs Central Suburbs Central Suburbs Central Suburbs Library $792 $792 $561 $561 $437 $437 $241 $241 Fire Protection $0 $150 $0 $106 $0 $83 $0 $46 Indoor Recreation $1,776 $1,776 $1,258 $1,258 $980 $980 $540 $540 Outdoor Recreation $1,126 $1,126 $798 $798 $621 $621 $342 $342 Public Works $0 $849 $0 $601 $0 $469 $0 $258 Parking $638 $638 $452 $452 $352 $352 $194 $194 Cemeteries $15 $15 $11 $11 $8 $8 $5 $5 Growth - Related Studies $119 $119 $85 $85 $66 $66 $36 $36 Subtotal General Services $4,466 $5,465 $3,165 $3,872 $2,464 $3,016 $1,358 $1,662 Sanitary Servicing $0 $1,463 $0 $1,036 $0 $807 $0 $445 Roads And Related $0 $2,984 $0 $2,113 $0 $1,647 $0 $907 Watermains $0 $212 $0 $150 $0 $117 $0 $65 Engineering Studies $0 $251 $0 $178 $0 $139 $0 $76 Intensification Allowance $1,014 $0 $718 $0 $560 $0 $308 $0 Storm /Watercourse $0 $143 $0 $102 $0 $79 $0 $44 Subtotal Engineered Services $1,014 $5,053 $718 $3,579 $560 $2,789 $308 $1,537 TOTAL CHARGE PER UNIT $5,480 $10,518 $3,883 $7,451 $3,024 $5,805 $1,666 $3,199 4. -8 Table 2 - Development Charge Rates (Non - Residential) 4. -9 Non - Industrial Charge Industrial Charge Service Central Suburbs Central Suburbs Library $0.00 $0.00 $0.00 $0.00 Fire Protection $0.00 $1.00 $0.00 $0.50 Indoor Recreation $0.00 $0.00 $0.00 $0.00 Outdoor Recreation $0.00 $0.00 $0.00 $0.00 Public Works $0.00 $6.25 $0.00 $3.13 Parking $5.76 $5.76 $2.88 $2.88 Cemeteries $0.00 $0.00 $0.00 $0.00 Growth - Related Studies $1.18 $1.18 $0.59 $0.59 Subtotal General Services $6.94 $14.19 $3.47 $7.10 Sanitary Servicing $0.00 $10.56 $0.00 $5.28 Roads And Related $0.00 $23.38 $0.00 $11.69 Watermains $0.00 $1.43 $0.00 $0.72 Engineering Studies $0.00 $1.71 $0.00 $0.86 Intensification Allowance $9.43 $0.00 $4.72 $0.00 Storm /Watercourse $0.00 $2.90 $0.00 $1.45 Subtotal Engineered Services $9.43 $39.98 $4.72 $19.99 TOTAL CHARGE PER SQUARE METRE 1 $16.37 $54.17 $8.19 $27.09 4. -9 Development Charges Bylaw Amendments Bylaw Clause 2.1 "accessory use" Change Summary Change "lot" to "site" Original Wording means a use, including a building, which is commonly incidental, subordinate and exclusively devoted to the main use or main building situate on the same lot Proposed Wording means a use, including a building, which is commonly incidental, subordinate and exclusively devoted to the main use or main building situate on the same site Bylaw Clause 2.14 "home business" Change Summary Change "vocational" to "business" Original Wording means a vocational use, as permitted by the applicable City zoning by- law, conducted in a dwelling unit which is secondary to the use of the dwelling unit as a private residence Proposed Wording means a business use, as permitted by the applicable City zoning by -law, conducted in a dwelling unit which is secondary to the use of the dwelling unit as a private residence Bylaw Clause 2.16 "household" Change Summary Remove "non- profit" from definition Original Wording means one or more persons living together as a single non - profit, housekeeping unit, sharing all areas of the dwelling unit and may, in addition, be designed to accommodate lodging units containing less than four residents Proposed Wording means one or more persons living together as a single housekeeping unit, sharing all areas of the dwelling unit and may, in addition, be designed to accommodate lodging units containing less than four residents Bylaw Clause 2.30 "townhouse or row dwelling" Change Summary Adopt same definition as used by the Region of Waterloo Original Wording means a dwelling or residential building divided predominantly vertically into three or more attached dwelling units, each of which has a separate entrance from the outside Proposed Wording means one dwelling unit within a building containing three or more dwelling units which is divided from the other dwelling units by one or more vertical solid walls or partitions extending from foundation to roof. Schedule B Development Charge Rates Change Summary Amend to include reduced industrial rate as shown in Table 2 of Appendix A. 4.-10 BY -LAW NUMBER OF THE CORPORATION OF THE CITY OF KITCHENER (Being a by -law to establish development charges for the City of Kitchener and to repeal Development Charge By -law No. 2009 -091 as amended by By -law No. 2010 -086 and By -law No. 2010 -106) WHEREAS the City will experience growth through development and redevelopment of land which will increase the need for services to be provided by the City; AND WHEREAS section 2(1) of the Development Charges Act, 1997, S.O. 1997, c. 27 (the "Development Charges Act ") enables the Council to pass by -laws for the imposition of development charges against land to pay for increased capital costs required because of increased needs for services arising from the development or redevelopment of land; AND WHEREAS Council wishes to ensure that the capital cost of meeting growth related demands for services is met but does not place a financial burden upon the City's existing taxpayers, and also that new taxpayers bear no more than the net capital cost attributable to providing the current level of services; AND WHEREAS the City has undertaken a Development Charges Background Study, dated April, 2014, to forecast, to the year 2031 for engineering services and to the year 2023 for all other services, growth within the municipality through development and redevelopment, to determine the need for services at specified service standards resulting from growth and to calculate 1 4.-11 the net capital costs of services attributable to growth (the "Study "); AND WHEREAS Council, in accordance with section 12 of the Development Charges Act and section 9 of Ontario Regulation 82/98, gave notice on April 4, 2014 of a public meeting to consider the passing of a development charges by -law, made available before and at the public meeting sufficient information to enable the public to understand generally the development charges proposal, held the public meeting on and heard representations from all persons who applied to be heard whether in objection to or in support of the proposal; AND WHEREAS Council, by resolution dated , has indicated that it intends to ensure that the increase in the need for services attributable to the anticipated development will be met, subject to sufficient development charge revenues being generated and other City affordability criteria being met; AND WHEREAS Council, by resolution dated , has indicated its intent that the future excess capacity identified in the Study shall be paid for by the development charges or other similar charges; AND WHEREAS Council, by resolution dated adopted the capital forecasts prepared in conjunction with the Development Charges Background Study for the City of Kitchener dated April, 2014; AND WHEREAS Council, having reviewed the Study and the proposed by -law and having considered all of the representations made at the public meeting, directed that this by -law be enacted; oil 4.-12 NOW THEREFORE the Council of The Corporation of the City of Kitchener enacts as follows: Article 1 Short Title 1.1 This By -law may be cited as the "Development Charges By- law ". Article 2 Interpretation In this by -law, the following definitions apply: 2.1 "accessory use" means a use, including a building, which is commonly incidental, subordinate and exclusively devoted to the main use or main building situate on the same lot; 2.2 "agricultural use" means the use of land and buildings for apiaries, fish farming, animal husbandry or the cultivation of trees, shrubs, flowers, grains, sod, fruits, vegetables and other crops or ornamental plants ( "agricultural products ") but shall not include any building or structure where agricultural products are displayed for sale in more than twenty -five per cent of the gross floor area of such building or structure; 2.3 "capital cost" means costs incurred or proposed to be incurred by the City or a local board thereof directly or by others on behalf of, and as authorized by, the City or a local board thereof, i) to acquire land or an interest in land, including a leasehold interest and land for an enclosed structure used throughout the year for public recreation and 3 4.-13 2.4 2.5 2.6 2.7 land that is necessary for the structure to be used for that purpose, including parking and access to the structure, ii) to improve land, iii) to acquire, lease, construct or improve buildings and structures, iv) to acquire, lease, construct or improve facilities including, 1) rolling stock with an estimated useful life of seven years or more, furniture and equipment other than computer equipment, and 2) materials acquired for circulation, reference or information purposes by a library board as defined in the Public Libraries Act, R.S.O. 1990, c.P.44, and v) to undertake studies in connection with any of the matters in clauses i) to iv), and the development charge background study required under section 10 of the Development Charges Act, required for the provision of services designated in this by -law within or outside the City, including interest on borrowing for those expenditures under clauses i), ii), iii) and iv); "development" includes redevelopment; "development charge" means a charge imposed with respect to growth- related net capital costs against land under this by -law; "duplex" means a dwelling or residential building divided predominantly horizontally into two dwelling units; "dwelling unit" means a room or suite of rooms which: I C�EI i) is located in a building (including a non - residential building), ii) is occupied or designed to be occupied by a household as a single, independent and separate housekeeping establishment, iii) contains both a kitchen and bathroom for the exclusive common use of the occupants thereof, and iv) has a private entrance leading directly from outside the building or from a common hallway or stairway inside the building; 2.8 "excess capacity" means uncommitted excess capacity but excludes uncommitted excess capacity if, either before or at the time the excess capacity was created, the Council of the City expressed a clear intention that the excess capacity would be paid for by development charges or other similar charges; 2.9 "existing industrial building" means a building or buildings existing on a site in the City of Kitchener on June 1, 2014 or the first building or buildings constructed and occupied on a vacant site pursuant to site plan approval under section 41 of the Planning Act, R.S.O. 1990, c.P.13 (the 'Planning Act ") subsequent to June 1, 2014 for which full development charges were paid, and is used for or in connection with, (i) the production, compounding, processing, packaging, crating, bottling, packing or assembling of raw or semi- processed goods or materials in not less than seventy -five per cent of the total gross floor area of the building or buildings on a site ( "manufacturing ") or warehousing; (ii) research or development in connection with manufacturing in not less than seventy- 5 4.-IS five percent of the total gross floor area of the building or buildings on a site; (iii) retail sales by a manufacturer, if the retail sales are at the site where the manufacturing is carried out, such retail sales are restricted to goods manufactured at the site, and the building or part of a building where such retail sales are carried out does not constitute greater than twenty -five per cent of the total gross floor area of the building or buildings on the site; or (iv) office or administrative purposes, if they are, (1) carried out with respect to manufacturing or warehousing; and (2) in or attached to the building or structure used for such manufacturing or warehousing; 2.10 "floor area" means the area of floors of a building or structure measured between the outside surfaces of exterior walls or between the outside surfaces of exterior walls and the centre line of party walls, and in the case of a dwelling unit includes only those floor areas above grade. This shall not include any area which is specifically designed for parking and is not being used for the repair or sale of vehicles; 2.11 "grade" means the average level of finished ground adjoining a dwelling unit at all exterior walls; 2.12 "gross floor area" means the total floor area of a building or structure; 2.13 "growth- related net capital cost" means the portion of the net capital cost of services that is reasonably attributable to the need for such net capital cost that results or will result from the anticipated development in all or a defined part of the City less the City's excess capacity CI 4.-16 and the extent to which an increase in service to meet the increased need will benefit existing development within the City; 2.14 "home business" means a vocational use, as permitted by the applicable City zoning by- law, conducted in a dwelling unit which is secondary to the use of the dwelling unit as a private residence; 2.15 "hospital" means a hospital as defined in the Public Hospitals Act, R.S.O. 1990, c. P.40; 2.16 "household" means one or more persons living together as a single non - profit, housekeeping unit, sharing all areas of the dwelling unit and may, in addition, be designed to accommodate lodging units containing less than four residents; 2.17 "local board" means a municipal service board, transportation commission, public library board, board of health, police services board, planning board or any other board, commission, committee, body or local authority established or exercising any power under any Act with respect to any of the affairs or purposes of the City or the Regional Municipality of Waterloo (the "Region ") or any part or parts thereof, excluding a school board, a conservation authority and any other board excluded under any general or special Act; 2.18 "local services" means services related to a plan of subdivision or within the area to which the plan relates, to be installed or paid for by the owner as a condition of approval under section 51 of the Planning Act, or as a condition of approval under section 53 of the Planning Act; 2.19 "lodging house" means a dwelling or residential building containing one or more lodging 7 4.-17 units designed to accommodate four or more residents. The residents may share common areas of the dwelling other than the lodging units, and do not appear to function as a household. This shall not include a group home, nursing home, hospital or any residential care facility licensed, approved, or supervised under any general or specific Act, or a hotel or motel. This shall include but not be limited to student residences, convents, unlicensed nursing homes and tourist homes; 2.20 "lodging unit" means a room or set of rooms located in a lodging house designed or intended to be used for sleeping and living accommodation, which: i) is designed for the exclusive use of the resident or residents of the unit; ii) is not normally accessible to persons other than the resident or residents of the unit; and iii) may contain either a bathroom or kitchen but does not contain both for the exclusive use of the resident or residents of the unit; 2.21 "multiple dwelling" means a dwelling or residential building containing three or more dwelling units, but shall not include townhouse or row dwellings; 2.22 "net capital cost" means the capital cost less capital grants, subsidies and other contributions made to the City or that the Council of the City anticipates will be made but only to the extent that the grant, subsidy or other contribution is clearly intended by the person making it to benefit new development and includes conveyances or payments under sections 42, 5 1. 1 and 53 of the Planning Act, in respect of the capital cost; 2.23 "non - residential use" means the use of land, building or structures for a use other than residential use, including all commercial, industrial and institutional uses and excluding 4.-IS agricultural uses; 2.24 "owner" means the owner of land or a person who has made application for an approval for the development or redevelopment of land upon which a development charge is imposed; 2.25 "residential use" means the use of land, buildings or structures for one or more single detached, semi - detached, townhouse, row dwelling, multiple dwelling or duplex dwelling units and lodging houses; 2.26 "semi- detached dwelling" means a dwelling or residential building divided predominantly vertically into two dwelling units; 2.27 "services" means services designated in Schedule "A" attached to this by -law; 2.28 "single- detached dwelling" means a dwelling or residential building consisting of one dwelling unit and not attached to another residential structure, and shall include a mobile home located on a foundation; 2.29 "site" means a parcel of land which can be legally conveyed pursuant to section 50 of the Planning Act and includes a development having two or more lots consolidated under one identical ownership; 2.30 "townhouse or row dwelling" means a dwelling or residential building divided predominantly vertically into three or more attached dwelling units, each of which has a separate entrance from the outside; and 2.31 "warehousing" means a building or buildings on a site having not less than seventy -five per cent of the total gross floor area of such building or buildings used for the storage or distribution of goods or materials. 0 4.-19 Article 3 Application and Exemptions 3.1 Subject to section 3.2, this by -law applies to all lands within the City of Kitchener and any lands outside the City of Kitchener to which services are provided by the City, whether or not the land or use thereof is exempt from taxation under section 3 of the Assessment Act, R.S.O. 1990, c.A.31. 3.2 This by -law does not apply to land owned by and used for the purposes of: (a) a board of education as defined by subsection 1(1) of the Education Act, R.S.O. 1990, c.E.2; (b) the City of Kitchener or any local board thereof, (c) the Region or any local board thereof, (d) any area municipality within the Region; and (e) the Crown in right of Ontario or the Crown in right of Canada. 3.3 Notwithstanding section 3.1., the following lands shall be exempt from the payment of development charges as of the effective date specified: (a) all lands within the Existing Downtown Core Boundary, the limits of which is shown in Schedule `C' effective as of July 1, 2014; (b) all lands within the Existing Downtown Core Boundary and the Expanded Downtown Core Boundary as shown in Schedule `C' effective as of July 1, 2016. It is further noted that Council has expressed the intention to discontinue the Downtown Exemption as set out in this section by March 1, 2019 or the repeal of this By -law, whichever ever occurs first; said discontinuance to be in advance of the next 10 4. -20 Development Charges Background Study and By -law, currently anticipated for 2019. 3.4 Subject to sections 3.5 to 3.10 inclusive, development charges shall apply on land to be developed or redeveloped for residential and non - residential use, where: (a) the development or redevelopment of the land will increase the need for services; and (b) the development or redevelopment requires one or more of the approvals which follow: (i) the passing of a zoning by -law or of an amendment thereto under section 34 of the Planning Act, R.S.O. 1990, c. P. 13; (ii) the approval of a minor variance under section 45 of the Planning Act, R.S.O. 1990, c. P. 13; (iii) a conveyance of land to which a by -law passed under subsection 50(7) of the Planning Act, R.S.O. 1990, c. P. 13 applies; (iv) the approval of a plan of subdivision under section 51 of the Planning Act, R.S.O. 1990, c. P. 13; (v) a consent under section 53 of the Planning Act, R.S.O. 1990, c. P. 13; (vi) the approval of a description under section 9 of the Condominium Act, S.O. 1998, c. 19; or (vii) the issuing of a permit under the Building Code Act, 1992, S.O. 1992, c.23 (the 'Building Code "), in relation to a building or structure. 11 4. -21 3.5 Section 3.4 shall not apply in respect of, (a) local services; or (b) local connections to water mains, sanitary sewers and storm drainage facilities installed at the expense of the owner including amounts imposed under a by -law passed under section 326 of the Municipal Act, 2001, c. 25, as amended. 3.6 Where two or more of the actions described in section 3.4 are required before the land to which a development charge applies can be developed or redeveloped, only one development charge shall be imposed, calculated and collected in accordance with the provisions of this by -law. 3.7 Despite section 3.6, if two or more of the actions described in section 3.4 occur at different times and if the subsequent action or actions has the effect of increasing the need for services as designated in this by -law, additional development charges shall be imposed, calculated and collected in accordance with the provisions of this by -law. 3.8 Despite section 3.4, any subdivision agreement or development agreement made under section 51 or section 53 of the Planning Act R.S.O. 1990, c. P.13 or any predecessor thereof, which provides for the payment of a lot levy, development charge, capital contribution or other charge shall remain in full force and effect, be enforceable according to its terms and prevail to the extent that there is any conflict with this by -law. This section, however, shall not apply with respect to any lot or block which is further subdivided by a new plan of subdivision or consent. 3.9 Where there is a conflict between the charge specified in an agreement set out in section 3.8 or in a condition of draft plan approval for a plan of condominium and the development 12 4. -22 charge specified in this by -law, the lower charge shall apply. 3.10 Section 3.4 shall not apply to: (a) a temporary use permitted under a zoning by -law enacted under sections 39 or 39.1of the Planning Act, R.S.O. 1990, c.P.13; (b) an accessory use to residential uses; (c) a home business; (d) an agricultural use; (e) temporary erection of a building without foundation for a period not exceeding six consecutive months and not more than six months in any one calendar year on a site for which development charges or lot levies have previously been paid; and (f) the enlargement of an existing dwelling unit or the creation of up to two additional dwelling units as prescribed by Ontario Regulation 82/98 and set out in Schedule "D" attached hereto, and as such Regulation may be amended from time to time, provided that: (i) the number of dwelling units created in the renovated or enlarged residential building does not exceed the applicable maximum number of additional dwelling units set out in Schedule "D" attached hereto, and the total gross floor area of the additional dwelling units does not exceed the applicable maximum gross floor area provisions set out in Schedule "D" attached hereto; and (ii) no more than one or two additional dwelling units in accordance with 13 4. -23 this subsection may ever be created without the imposition of development charges. 3.11 Development charges as set out in Articles 4, 5 and 6 of this by -law shall apply to all lands that are developed or redeveloped for residential and non - residential use in accordance with this by -law, but only insofar as, (a) the growth- related net capital costs of services are attributable to residential or non- residential use, as the case may be; and (b) the growth- related net capital cost of each service is attributable to the anticipated development and at standards no higher than the average level of each such service provided by the City over the ten year period immediately preceding the preparation of the Study. 3.12 The rates set out in Schedule "B" attached hereto shall be determined so as to reflect a ten per cent reduction to the growth- related net capital costs, except that there shall be no percentage reduction for the following growth- related net capital costs: (a) water supply services, including distribution and treatment services; (b) waste water services, including sewers and treatment services; (c) storm water drainage and control services; (d) services related to a highway as defined in section 26 of the Municipal Act, 2001, c. 25 as amended; and (e) fire protection services. 14 4. -24 Article 4 Residential Development Charges 4.1 Development charges against land to be developed or redeveloped for residential use shall be based upon the services to be provided by the City which are designated in Schedule "A" attached hereto. 4.2 Subject to the provisions of this by -law, development charges are hereby imposed against land to be developed or redeveloped for residential use located within the Suburban Area the boundary of which is shown on Schedule "C -2" attached hereto and shall be calculated and collected at the rates set out in Schedule "B" attached hereto. 4.3 Subject to the provisions of this by -law, development charges are hereby imposed against land to be developed or redeveloped for residential use located within the Central Neighbourhoods the boundary of which is shown on Schedule "C -1" attached hereto and shall be calculated and collected at the rates set out in Schedule "B" attached hereto. 4.4 Subject to the provisions of this by -law, development charges against land to be developed or redeveloped for mixed residential use shall be the aggregate of the amount applicable for each dwelling unit according to its type as set forth in Schedule "B" attached hereto. Article 5 Non - residential Development Charges 5.1 Development charges against land to be developed or redeveloped for non - residential use shall be based upon the services to be provided by the City which are designated in Schedule 15 4. -25 "A" attached hereto. 5.2 Subject to the provisions of this by -law, development charges are hereby imposed against land to be developed or redeveloped for non - residential use located in the Suburban Area the boundary of which is shown on Schedule "C -2" attached hereto and shall be calculated and collected at the rate set out in Schedule "B" attached hereto. 5.3 Subject to the provisions of this by -law, development charges are hereby imposed against land to be developed or redeveloped for non - residential use in the Central Neighbourhoods the boundary of which is shown on Schedule "C -1" attached hereto and shall be calculated and collected at the rate set out in Schedule "B" attached hereto. 5.4 Despite anything in this by -law, there shall be an exemption from the payment of development charges for one or more enlargements of an existing industrial building on its site, whether attached or separate from the existing industrial building, up to a maximum of fifty per cent of the gross floor area before the first enlargement for which an exemption from the payment of development charges was granted pursuant to the Development Charges Act or this section. Development charges shall be imposed in accordance with Schedule "B" with respect to the amount of floor area of an enlargement that results in the gross floor area of the industrial building being increased by greater than fifty per cent of the gross floor area of the existing industrial building. 5.5 For the purpose of this section, despite any new sites created which result in an existing industrial building being on a site separate from its enlargement or enlargements for which an exemption was granted under this Article, further exemptions, if any, pertaining to the 16 4. -26 existing industrial building shall be calculated in accordance with section 6.4 on the basis of its site prior to any division. 5.6 Despite anything in this by -law, there shall be an exemption from the payment of development charges in respect of any enlargement of a hospital. Article 6 Mixed Use 6.1 Subject to the provisions of this by -law, development charges against land to be developed or redeveloped for mixed residential and non - residential use shall be the aggregate of the amount applicable to the residential component and the amount applicable to the gross floor area of the non - residential component. Article 7 Administration Payment 7.1 All development charges required to be paid to the City pursuant to this by -law shall be paid by cash or certified cheque and directed to the City's Chief Building Official. Calculations 7.2 Subject to the provisions of this Article, development charges shall be calculated and payable in full on the date that a building permit is issued in relation to a building or structure on land to which a development charge applies. 17 4. -27 7.3 Where development charges apply to land where a building permit is required, no building permit shall be issued until the development charge is paid in full. 7.4 Despite section 6.1, the City may require that development charges applicable with respect to the services described in subsections 3.12 (a) to (d) inclusive of this by -law ( "Engineering Services "), be calculated as set forth in Schedule "B" hereto and payable immediately upon the execution of a subdivision agreement under section 51 of the Planning Act, R.S.O. 1990, c. P. 13. or a consent agreement under section 53 of the Planning Act, R.S.O. 1990, c. P. 13., with respect to the lands to which such agreement, as the case may be, relates. Credits 7.5 The City may by agreement permit the owner of land to which development charges apply to provide services for development or redevelopment of that land in lieu of the payment of all or any portion of a development charge, including services additional to or of a greater size or capacity than is required under this by -law ( "services in lieu ") 7.6 Upon proof of the installation or construction of services in lieu to the satisfaction of the City's Engineer, a credit, without interest, shall be applied against development charges payable for an amount equal to the reasonable cost to the owner of providing services in lieu, as determined by the City's Engineer, not to exceed the total amount of the development charges otherwise payable. 7.7 Any unused credit may be applied, upon proof satisfactory to the City's Chief Building Official, to any subsequent development charge payable with respect to the same land as referred to in section 7.5, or transferred and applied to any development charge payable with 4. -28 respect to other land owned by the same owner to be developed or redeveloped with the consent of the City on terms satisfactory to the City Solicitor. Redevelopment Allowances 7.8 Subject to the provisions of this Article, where any redevelopment or re -use of land replaces or changes a former or existing development and, in the case of demolition upon proof of issuance of a demolition permit for the land being provided, the development charge applicable to the redevelopment or re -use shall be reduced by a redevelopment allowance, without interest, not to exceed an amount equal to the total of: (a) the number and types of legally established residential units in the former or existing development; and (b) the legally established non - residential gross floor area of the former or existing development, as determined by the City's Deputy Chief Administrative Officer, Community Services and Chief Building Official at the rates applicable to such units or gross floor area at the time the first building permit for the re- development is issued. 7.9 No redevelopment allowance shall be made in excess of the development charge payable for a redevelopment; however, the redevelopment allowance may be carried forward and applied, upon proof satisfactory to the City's Chief Building Official, to any subsequent development charge payable with respect to the same land as referred to in section 7.8. Reserve Funds 7.10 Monies received from payment of development charges shall be maintained in a separate 19 4. -29 reserve fund or funds, and shall be used only to meet the growth- related net capital costs for which the development charge was imposed under this by -law. 7.11 Income received from investment of the development charge reserve fund or funds shall be credited to the development charge reserve fund or funds in relation to which the investment income applies. 7.12 Where any development charge, or part thereof, remains unpaid after the due date, the amount unpaid shall be added to the tax roll and shall be collected as taxes. 7.13 Where any unpaid development charges are collected as taxes under section 7.12, the monies so collected shall be credited to the development charge reserve fund or funds referred to in section 7.10. Article 8 General Provisions 8.1 This by -law shall be administered by the City's Deputy Chief Administrative Officer, Community Services; Deputy Chief Administrative Officer, Finance and Corporate Services and City Treasurer; and the Chief Building Official. Annual Adjustment 8.2 The development charges set out in Articles 4, 5, 6 and Schedule "B" attached hereto shall be adjusted annually, without amendment to this by -law, as of the 1st day of January in each year, commencing on January 1, 2015, in accordance with the index prescribed by Ontario Regulation 82/98 and as such Regulation may be amended from time to time. 20 4. -30 8.3 The minimum interest rate that the City shall pay under subsection 18(3) and 25(2) of the Development Charges Act, 1997, c.27 in relation to a development charges by -law shall be the Bank of Canada interest rate on the day the by -law comes into force and thereafter as such rate is adjusted on the first business day of every January, April, July and October of each year. Article 9 Repeal — Enactment Term 9.1 This by -law shall come into force and effect on July 1, 2014. 9.2 This by -law shall continue in force and effect for a term not to exceed five years from the date of its coming in to force and effect unless it is repealed or replaced at an earlier date by a subsequent by -law. 9.3 Nothing in this by -law shall be construed so as to commit or require the City or its Council to authorize or proceed with any specific capital project at any specific time. 9.4 Each and every provision of this by -law is severable and, if any provision or provisions of this by -law should, for any reason, be declared invalid by any court, it is the intention of Council that each and every of the then remaining provisions of this by -law shall remain in full force and effect. 9.5 The Clerk is hereby directed to make this by -law a part of The City of Kitchener Municipal 21 4. -31 Code as Chapter 315 by adding it to the Concordance and arranging and numbering it so as to fit within the scheme of the Code. 9.6 By -law No. 2009 -091 as amended by By -law Nos. 2010 -086 and 2010 -106 and the contents of Chapter 315 of The City of Kitchener Municipal Code, as amended, are hereby repealed effective at midnight on June 30, 2014. PASSED at the Council Chambers in the City of Kitchener this day of , A.D. 2014. Mayor 22 4. -32 Clerk 23 4. -33 Schedule `A' to Development Charge By -law Services - Designations SERVICES 1. Sanitary Servicing 2. Roads and Related 3. Watermains 4. Engineering Studies 5. Intensification Allowance 6. Storm/Watercourse 7. Public Works 8. Fire Protection 9. Indoor Recreation 10. Library 11. Outdoor Recreation 12. Cemeteries 13. Parking 14. Growth- Related Studies DESIGNATION Residential/Non- residential Residential/Non- residential Residential Residential/Non- residential 24 4. -34 SCHEDULE `B' DEVELOPMENT CHARGE RATES Full Full Partial Services Services Services Central Neighbourhoods Suburban Area Suburban Area (no sanitary sewer) Partial Services Suburban Area (no sanitary sewer or water services) Residential $ 3,024 $ 5,805 Development (effective 0Lfly 11 2010) 4,998 $ 4,881 Single detached $ 5,480 $ 10,518 $ 9,055 $ 8,843 or semi - detached per dwelling unit per dwelling unit per dwelling unit per dwelling unit dwelling 1,666 $ 3, 199 $ l owiNh muses or $ 3,883 $ 7,451 $ 6,415 $ 6,265 I' ow 0we1iigg per dwelling unit per dwelling unit per dwelling unit per dwelling unit Multiple or $ 3,024 $ 5,805 $ 4,998 $ 4,881 duplex dwelling per dwelling unit per dwelling unit per dwelling unit per dwelling unit Lodging house $ 1,666 $ 3, 199 $ 2,754 $ 2,689 per lodging unit per lodging unit per lodging unit per lodging unit Non - Residential Development (effective 0L llly 11 2010) Gross floor area $ 16.37 $ 54.17 $ 43.61 $ 42.18 of building per square metre per square metre per square metre per square metre $ 1.52 $ 5.03 $ 4.05 $ 3.92 per square foot per square foot per square foot per square foot Note: All rates in this schedule are subject to annual indexing as per section 8.2 of this by -law. 1 square metre = 10.76391 square feet. The development charges are imposed on all lands in THE CITY OF KITCHENER except those shown on Schedule "C" of the By -law. 25 4. -35 3• IIIIII �h � � / pplllllllll pIIIIIIIIIIIIV�," ," � IIIIIIIIIIIIIIIIIIIIIIIII� III � ,� � h• ^� �` 2�' l ozla 4, \ ) cu LU �, IIIIIIIIIIII °I °111111111 � � � IIIIII 11111111/ h;� h �� "�IIIIIIIIIIIIIIIIIIIIIIII y �5� " ", pIVIVIVIVIVIVIVIII h?' ,h J' O O O (IIIIIIIIIIIII , ���� � a 0 0 - V �" IIIIIIIIIIIIIIIIIIIIIIII `y' � " �, � h "ry �/ ° V � 1j1j11111111111111111 �,,� � " o �{{{, ~"""� , � IIIIII �`'•• " w,''... (/� • ✓ 1111 S „ �. %�A'•✓' , (0 LU Q „ \\ \ uu "' ., .. rs .,,, "';: „ NCO /� ,•.,.,./ fNO d `7yjllllllllllllllllllllll o k� N s, / %� ' "s• � sue. IIIIIIIIII � I ✓ V♦ � -y �( y / /.,y,. � f-'` jjjjlpplVllllll ,� N Moll ,. co O -- J .� sus IIP U sro O 0 04 �S E (7 O 0 )IIII NO O, k �v 0 N � o o m m ,,,,.,.,,.,, U) C N F N Q_ WU WUw m�a uuuuuuum o E .. SCHEDULE 'C1' City of Kitchener Central Neighbourhoods Boundary of Central Neighbourhoods ®Area to be added to Downtown Core Boundary (Effective July 1, 2016) 1 ITC R Corporate Services Department Information Technology - GIS April 14, 2014 Sources: Parcel Fabric: Teranet (up to Aug 1998), Strategic Services - I.T. - GIS (1998 - current); Railways: Finance and Corporate Services - Information Technology - GIS (July 2004); Street Network: Strategic Services - I.T. - GIS (Current to date of printing) ptiPw� Z v �o v DEVELOPMENT CHARGES Schedule `D' — Classes of Development Name of Class of Description of Class of Maximum number of Restrictions Residential Building Residential Buildings additional dwelling units Single detached dwellings Residential buildings, Two The total gross floor each of which contains a area of the additional single dwelling unit, that dwelling unit or units are not attached to other must be less than or buildings equal to the gross floor area of the dwelling unit already in the building Semi - detached dwellings or Residential buildings, One The gross floor area Row dwellings each of which contains a of the additional single dwelling unit, that dwelling unit must be have one or two vertical less than or equal to walls but no other parts, the gross floor area of attached to other the dwelling unit buildings already in the building. Other residential buildings A residential building not One The gross floor area in another class of of the additional residential building dwelling unit must be described in this table less than or equal to the gross floor area of the smallest dwelling unit already in the building. 29 4. -39