HomeMy WebLinkAboutCSD-17-102 - Performance Securities Policy ReviewREPORT TO: Community & Infrastructure Services Committee
DATE OF MEETING: January 8, 2018
SUBMITTED BY: Alain Pinard, Director of Planning, 519-741-2200 ext. 7319
PREPARED BY: Michael Palmer, Urban Designer, Planning,519-741-2200
ext. 7326
WARD(S) INVOLVED: All
DATE OF REPORT: November 14, 2017
REPORT NO.: CSD-17-102
SUBJECT: Performance Securities Policy Review
______________________________________________________________________
RECOMMENDATION:
That the revised Council Policy I-1080- Performance Securities, asprovided in
Appendix A of CSD-17-102, be approved.
BACKGROUND:
-1080) provides direction on taking performance
securities (usually as a letter of credit) to ensure that sites are developed per their approved site
plan. As part of site plan approval and condominium registration, Sections 41 and Section 51 of
the Planning Act give a municipality the authority to enter into development agreements which
typically include performance securities for the purpose of ensuring the completion of the site
works outlined in the agreement. The purpose of this report is to update the Performance
Securities Policy which was last updated in 2008, providing clarity to the policy and creating
efficiencies for both the City and builder as summarized it this staff report.
REPORT:
The review of the Performance Securities Policy evaluated how to effectively address the
following:
Large-scale and multi-year construction projects;
The alternative calculation for performance securities;
How performance securities should address other aspects of site plan approval (such as
elevations);
Commitments to completing site works associated with condominium registration;and,
Other minor revisions to update the policy to address efficiencies and current practices.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
4 - 1
One of the primary reasons for this policy update is to better address large-scale and more
complex developments which are becoming more common since the last update. Staff has
found that the current policy is geared to one-building projects rather than multi-building
developments that are constructed over several years. The updated policy supports a process
for releasing site securities that is reasonable and efficient for the development industry while
.
Appendix A to this report includes the updated policy. Key changes to the policy include:
Allowance for the performance security to be applied to future phases under separate
site plan approvals (affecting large, multi-stage projects);
Inclusion of Section 51 of the Planning Act to recognize holding of securities for the
condominium registration process for site works not completed prior to registration;
Clarification that performance securities collected may be applied to any portion of the
outstanding site works and not just the itemized list of site works used for the calculation;
Deletion of the alternative security calculation which is outdated and ineffective; and,
Addition of the French language school boards to the list of exempt organizations from
providing performance securities.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
through the delivery of core service.
FINANCIAL IMPLICATIONS:
There are no financial implications associated with this recommendation.
COMMUNITY ENGAGEMENT:
Over the course of a year and a half the building industry has been involved with providing
feedback on the drafts of the updated policy. Through the Waterloo Region Home Builders
Association (WRHBA) Liaison Committee, staff was able to address concerns and answer
questions to move forward with the proposed policy.
INFORM Distribution of draft policy to both the WRHBA Liaison Committee and the Grand
Valley Construction Association.
CONSULT Feedback was received mainly through the WRHBA Liaison Committee
COLLABORATE Through recommendations and requests made by the industry, staff
modified the original draft policy. A key topic for the building industry was that no additional
financial costs should be incurred. This policy does not affect the amount of financial securities
held by the City.
CONCLUSION:
The updated Performance Securities Policy provides additional clarity and efficiency to the
policy for both staff and the development industry. No additional financial implications are
proposed to either the City or the building industry. Components should, in fact, save applicants
4 - 2
time and money for larger projects in cases when a letter of credit is transferred between
phases (if permissible by the financial institution) that are under separate site plan applications.
Planning Staff recommend approval of the policy as outlined in the Recommendation section of
this report.
REVIEWED BY: Janine Oosterveld, Manager, Site Development & Customer Service
Della Ross, Manager, Development Review
ACKNOWLEDGED BY: Michael May, Deputy CAO (Community Services)
Appendices:
Proposed Performance Securities Policy
4 - 3
Appendix A
COUNCIL POLICY RESOLUTION
DATE: MARCH 1,1999
POLICY NUMBER:I-1080
amended: NOVEMBER 9,2000
amended: May 5,2008
DRAFT changes: November 14, 2017
POLICY TYPE: LAND USEPLANNING
SUBJECT: PERFORMANCESECURITIES
POLICY CONTENT:
1.That for development proposals approved under Section 41 and Section 51
of thePlanning Act the City may require the owner to provide performance
securities prior to Site Plan approval and condominium registration in a form
andamount satisfactory to the City Solicitor and the Manager of Site
Development and Customer Service (or Alternate). Theperformance
securities shall be held as security for the completion ofrequired site
development works.
2.Performance Securities Calculation and Release
a) The amount of performance security shall be based on a cost
estimate of site development works completed to the satisfaction of
the Manager of Site Development and Customer Service.
b) The amount of the performance security shall be 50% of the total
cost of all site development works except if the development is part
of a proposed draft plan of condominium, in which case 100% of the
total cost of all outstanding site development works is required prior
to registration.
c) After satisfactory completion of 50% of the value of site
development works, the amount of security held by the City may be
reduced upon acceptance of partial site certification, satisfactory
inspection by the City, and inaccordance with the cost estimate.
Note: partial releases do not confer final acceptance of site works
and are at the discretion of the City.
d) The performance security may not be reduced below 50% of the
4 - 4
total amount secured or $250,000, whichever is the lesser, until the
City has received all required Site Development Works Notification
Forms, received full certifications for all site works, and the City is in
complete agreement with the certifications.
e) While the cost estimate is based on a specific list of site
development works, the site shall be constructed in full accordance
with all approved plans and drawings, and the Section 41 or Section
51Agreement. Items reflected therein, but not specifically included
in the cost estimate, are deemed to be required prior to the release
of the performance security. The performance security may be
applied to their completion in accordance with 2.f).
f) The performance security is provided to ensure that the project is
completed according to the approved plans and drawings, and in
the timeframe described in the Site Plan Approval and/or Section 41
or Section 51 Agreement. The itemized cost estimate is for
calculation purposes only. The total amount of the performance
security may be used to complete any site plan deficiencies at the
discretion of the Manager of Site Development and Customer
Service.
g) After satisfactory completion, full certifications for all site works, and
the Citycomplete agreement with the certifications of all site
development works, the totalamount of security held by the City
shall be released.
3 & 4 \[relating to alternative security calculation - deleted\]
3.Phased Developments
a) A performance security may be carried over to a consecutive phase if
the subsequent phase requires a separate Site Plan Approval. A cost
estimate of all site development works, in accordance with 2(a), is
required for each phase to confirm that the performance security
amount is adequate.
b) The transfer of a performance security in part or whole to a subsequent
phase may only occur after the original site development works have
been completed in accordance with 2(c) and (d) under written direction
by the property owner, to the satisfaction of the Manager of Site
Development and Customer Services and City Solicitor.
4 - 5
4.Construction Supervision
a) The property owner is required to retain the services of the project
consultant team to provide construction supervision and inspections in
accordance with Site Plan Approval and/or the Section 41 or Section 51
agreement. The project consultant team will ensure site development
works are completed in accordance with approved plans and reports.
b) The City may, at its discretion, inspect the work at any time and report
any deficiencies to the consultant.
5.Performance securities shall not apply to the City or any local board thereof,
theRegional Municipality of Waterloo or any local board thereof, theKitchener-
Wilmot Hydro Inc., the Waterloo Region District School Board,the Waterloo
Catholic District School Board,Conseil Scolaire de District Catholique Centre-
Sud,Conseil Scolaire Viamonde or the Federal or ProvincialGovernment or
any crown agency thereof, or hospitals as defined in thePublic Hospitals Act,
R.S.O. 1990. However, the applicable inspections and certifications would be
necessary to deem the site complete in accordance with the approved plans.
4 - 6