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HomeMy WebLinkAboutFCS-15-058 - Proposed Changes to the Development Charges Act - Bill 73 Staff Report rTC.�r R finance and Corporate Services Department www.kitchener.ca REPORT TO: Community and Infrastructure Services Committee DATE OF MEETING: April 20, 2015 SUBMITTED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x7353 PREPARED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x7353 WARD(S) INVOLVED: All DATE OF REPORT: April 8, 2015 REPORT NO.: FCS-15-058 SUBJECT: Proposed Changes to the Development Charges Act— Bill 73 RECOMMENDATION: For information. BACKGROUND: The imposition, collection and administration of development charges (DCs) in Ontario are governed by the "Development Charges Act, 1997" (DCA) and associated regulations. On March 5, 2015, the Minister of Municipal Affairs and Housing introduced Bill 73 — Smart Growth for Our Communities Act, 2015. The bill has received first reading and would amend the "Development Charges Act" and the "Planning Act". The Province indicates that the bill, if passed, will "help municipalities recover more costs, enhance transparency and accountability, and support higher density development." This report provides information on the proposed changes to the DCA. REPORT: Through Bill 73, the Province has proposed the following changes to the DCA: 1. Ineligible Services: • Move the definition of Ineligible Services from the Act to the Regulations which will allow for easier adjustments to add or reduce ineligible services. 2. Area Specific Charges: • New requirements which will prescribe areas and services which must be undertaken on an area-specific basis; • New powers to allow the Province to prescribe municipalities, services and criteria so that the prescribed municipality must pass more than one by-law for prescribed services and criteria; • Provisions for area-specific charges are to be set out in regulations. 3. Transit Service: • The 10% mandatory deduction of growth-related costs will be removed. ***This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. IF2 - 1 4. Service Standard Calculations: • The Minister may prescribe services which will not be subject to the 10-year historic average service restriction; • Restrictions so that a planned 10-year level of service to be achieved over the 10-year forecast is not exceeded; • Methodology for determining the planned level of service will be set out in the regulations. 5. Development Charge Background Study requirements: • Municipalities must examine the use of area-rating; • Inclusion of an asset management plan related to new infrastructure — the requirements of the asset management plan, the information to be provided and the manner in which it is prepared will be prescribed by regulation; • Requirement to demonstrate that all of the new infrastructure in the asset management plan is financially sustainable over their full life cycle. 6. Payment Timing for Multiple Building Permits: • When multiple building permits are issued in respect of a single building, the DC is payable when the first building permit is issued. 7. Annual Report of the Treasurer: • Existing reporting requirements will be continued and new requirements added to- o Identify all assets whose capital costs were funded by DCs and, for each asset, identify costs which were funded by other sources; • Include a statement as to the municipality's compliance in not imposing, directly or indirectly, a charge related to a development or a requirement to construct a service related to development, except as permitted by this Act or another Act; • Require that the report be made available to the public; • Submit the report to the Ministry of Municipal Affairs and Housing only when requested by the Minister. 8. Voluntary Payments: • New provisions to prohibit municipalities from imposing voluntary payments or requiring construction of a service not authorized under the DCA (note that exceptions may be made for a prescribed class of development, a prescribed class of services related to development or a prescribed Act or a prescribed provision of an act); • Transitional provisions will make exceptions for existing voluntary payment agreements; • Ministry of Municipal Affairs and Housing may investigate a municipality for compliance, and the cost of all or a portion of the investigation may be imposed on the municipality; • This provision addresses the Province's goal to curb municipal charges on new developments that fall outside what is allowed in current legislation. 9. Other Minor Changes to the Act: • Housekeeping change to update the reference to the Condominium Act; • Changes to provide the Lieutenant Governor in Council to make regulations in respect of: IF2 - 2 • Ineligible Services; • Municipalities, services, areas and criteria for the purpose of area rating; • Services that could use a planned level of services and a method for determining such planned level of service; • Information required in asset management plans and the manner of preparation for such plans; • Classes of development, classes of service to developments, Act and provisions of Acts for the purpose of restrictions on additional levies. 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 City passed an updated Development Charge by-law in 2014 which will not expire until 2019. As such the City is not required to update its by-law until the expiry date. Therefore, the proposed changes to the development Charges Act should not affect the City's current Development Charges by-law. However, staff will monitor the proposed changes to see if the City should update the by-law sooner than the expiry date. COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. CONCLUSION: Staff is aware of the content of Bill 73 and have attended a webinar hosted by the Ministry of Municipal Affairs and Housing on the proposed changes. Based on what is known to date, staff believes the proposed changes are generally favourable to municipalities, although they may not have a significant impact on Kitchener, as the most significant changes appear to be focused on services provided locally the Region of Waterloo (e.g. transit). However, Bill 73 proposes that various provisions be implemented through regulation and staff are concerned about the amount of time needed to pass such a regulation. The Ministry has proposed to establish a Development Charges Working Group to provide additional advice on the issues. ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services) IF2 - 3