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HomeMy WebLinkAboutFinance & Corp - 2004-04-19 SFINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 19~ 2004 CITY OF KITCHENER The Finance and Corporate Services Committee met in special session this date, commencing at 3:35 p.m. Present: Chair Councillor B. Vrbanovic Mayor C. Zehr Councillors C. Weylie, J. Smola, J. Gazzola, M. Galloway and G. Lorentz Others: R. Browning, Chief Administrative Officer C. Ladd, General Manager of Strategic Services G. Stewart, General Manager of Development & Technical Services G. Sosnoski, General Manager of Corporate Services/City Clerk P. Houston, General Manager of Financial Services & City Treasurer F. McCrea, Assistant City Solicitor J. Willmer, Director of Planning R. Goetz, Senior Financial Analyst D. Mansell, Deputy Director of Engineering Services H. Gross, Director of Project Administration L. Masseo, Manager, Design and Development M. Seiling, Supervisor of Permits D. Gilchrist, Committee Administrator FIN-04-022 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY The Committee was in receipt this date of Financial Services Department report FIN-04-022, dated April 16, 2004, presenting highlights of the 2004 Development Charges Background Study, and draft copies "City of Kitchener 2004 Development Charges", dated April 19, 2004. Ms. Houston introduced the staff team involved in preparation of the study, advised that staff have been working on the background study since the summer of 2003, and a new by-law must be in place by July 1, 2004. In her overview Ms. Houston noted the City's Policy is to ensure the capital cost of growth does not place a burden on existing taxpayers. Further, the Development Charges Act enables the City to impose development charges to pay for increased capital costs required because of new development or redevelopment. The Study presented this date has taken into consideration forecasted growth over the next 10 years, including the need and cost for services attributable to that growth; although the Development Charge By-law must be reviewed every 5 years. The staff team presented information regarding the forecasted increase in both residential and non-residential growth. As well, they advised of the methodology for determining costs per capita for services associated with growth and redevelopment for residential growth in 3 areas of the City: Downtown, central neighbourhoods, and suburban areas. The development charge rates proposed include engineering services as well as the following "soft services": library, parks and recreation, fleet and fire. The Committee considered the forecasts for growth for the previous 5 years and for future growth in both residential and non-residential categories. Staff advised for the purpose of this by-law the City must use forecasts prepared by the Region of Waterloo. In 1999, population growth for the City of Kitchener was forecast to be 4658 per year, for each year of the 10-year forecast; whereas, population growth has only been 2995 people per year for the 5-year period 1999-2003. Population growth is now forecast to be 2502 persons per year, starting in 2004, for a 5-year period, and 2730 persons per year for the subsequent 5 years. With respect to non-residential growth, the Region, in 1999 had forecasted growth rate of 51,115 square metres per year for a 1 O-year period; whereas, for the years 1999-2003, non-residential growth was 55,716 square metres. Forecast growth in the non-residential area for the 5-year period starting in 2004 is now 46,484 square metres, and in the subsequent 5-year period is forecast to be 66,634 square metres. The background study recommends 3 separate development charge rates for residential growth one for the Downtown area, one for the inner area neighbourhoods, and a third residential development charge rate for the suburban areas. Mr. Masseo explained the methodology with respect to these areas' specific charges, including the Inner City Development Incentive. He explained that infrastructure already exists in these areas; FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 19, 2004 - 65 - CITY OF KITCHENER 1. FIN-04-022 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY (CONT'D) therefore, it is less costly to develop. Under the proposed Development Charges By-law, the Downtown explanation area has been enlarged to include key areas on Breithaupt Street, and the Warehouse District. With respect to the Residential Growth Forecast provided by the Region, staff advised of their opinion that the Forecast is fairly accurate. Concerning Engineering Services, Mr. D. Mansell advised that the costs are based on recent tenders, and includes those services identified in the Staging of Development report. A brief discussion took place with respect to the costs of fire service for the central area, as compared to the suburban area charges. It was noted that all fire stations, as determined through the Fire Station Location Study, have been financed through development charges, and the growth forecast over the next 10 years does anticipate the need to expand fire stations in the central area. With respect to comparative development charge rates with other municipalities, it was noted by Mr. Masseo that all municipalities are experiencing increases costs; however, many municipalities choose to pay for some chargeable projects through the general levy. He noted that the Regional growth figures used in determining development charges, for the last 2 Development Charge By-laws, were inaccurate, which kept the City of Kitchener development charges artificially Iow. He stated that staff believe population growth figures for the City of Kitchener will be slightly higher than the Region's current projections. Councillor Vrbanovic noted that the Conference Board of Canada forecast that Kitchener will be one of the 3 fastest growing areas in the country; therefore, he is surprised at the Region's forecast for population growth. He directed staff to review these figures again and adjust the development charges accordingly. Mr. J. Willmer offered the potential outcomes of the proposed rate structure on development in the City. He suggested that potential outcomes on the suburban areas will be an increase in the construction of affordable housing, and in the construction of high end residential. The Downtown Core and central neighbourhoods could see growth continue at the present rate, or an increase in growth. Ms. Houston put forward implementation options for the Committee's consideration: a) implement a full rate change, b) phase in full rate changes over 2-3 years, or c) subsidize rate changes in any one of the following ways: I) IV) v) non-residential rates to encourage commercial and industrial growth, all rates, area specific charges with front-end financing agreement for selected hard services, reduce service levels, and/or determine other options through a consultation process. Ms. Houston advised that staff are preparing to undertake a community consultation process, and are requesting this Committee's direction with respect to the proposed rates presented this date. With respect to the exemption in the Downtown Core, Mr. Masseo explained that when undertaking a growth related capital project, staff will determine how much of the project is attributable to Downtown growth, and that portion will be paid from the Capital Budget. With respect to Iow cost housing, Mr. Masseo advised that the Region pays the development charges for this form of housing, and could choose to pay for projects which are the least costly, which may encourage projects to locate where the development charges are the least. APRIL 19, 2004 FINANCE & CORPORATE SERVICES COMMITTEE MINUTES - 66 - CITY OF KITCHENER FIN-04-022 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY (CONT'D) Councillor Vrbanovic questioned whether suburban rates could be lowered and the Downtown rates remain as they are. Mr. Willmer suggested the proposed rates reflect real costs, and any changes would be minuscule. Councillor Vrbanovic advised that he is in general agreement with the 3 categories of residential rates; however, he emphasized the need to review population projections with the Region. He raised his concerns with actual rates, noting Kitchener may not be as competitive as it would like to be within the Region with these new rates. He directed staff to refine the actual rates as much as possible. Staff advised that a public consultation process will be undertaken over the next 6 weeks and staff will report back to the Finance and Corporate Services Committee on June 7, 2004, with a final report. CRPS-04-053 - COMPOSITION OF MUNICIPAL COUNCIL The Committee was in receipt of Corporate Services Department report CRPS-04-053, dated March 30, 2004. It was noted that consideration of this report had been referred to this meeting by this Committee at its April 5, 2004 meeting. There was a brief, general discussion with respect to the report with Councillors Weylie and Gazzola being supportive of an increase in the number of ward councillors. Other members of the Committee, some of whom may have been supportive of a change in the composition of the council, were not supportive of a change at this time. Councillor Gazzola put forward a motion that part of the City's strategic planning over the next 3 years include consideration of increasing the number of wards and/or councillors, which was lost on a recorded vote. Councillors Weylie and Gazzola voted in favour of the motion, while Mayor C. Zehr and Councillors Lorentz, Galloway, Vrbanovic and Smola voted in opposition to the motion. ADJOURNMENT On motion, the meeting adjourned at 5:30 p.m. Dianne Gilchrist Committee Administrator