HomeMy WebLinkAboutFIN-07-071 - 2006 Development Charges Reserve FundReport To:
Councillor B. Vrbanovic, Chair, and Members of the Finance
and Corporate Services Committee
Date of Meeting:
May 28, 2007
Submitted By:
Pauline Houston, General Manager of Financial Services and
City Treasurer
Prepared By:
Ruth-Anne Goetz, Senior Financial Analyst
Ward(s) Involved:
All
Date of Report:
May 22, 2007
Report No.:
FIN-07-071
Subject:
2006 DEVELOPMENT CHARGES RESERVE FUND
For information.
The Development Charges Act (1997) requires that the Treasurer submit to Council an annual
statement of the Development Charge (DC) Reserve Fund.
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Categories of Service
Development charges are collected to fund growth-related capital costs for services as allowed
by legislation. Services are grouped into two categories — discounted services and non-
discounted services. The Development Charges Act requires that a discount of 10% be applied
to the growth-related capital costs for "soft services" when calculating development charge
rates. Discounted services are for Recreation and Library services.
Non-discounted services refer to services for which the legislation does not require a reduction.
Non-discounted services are for Roads, Sanitary Sewers, Water, Storm Sewers, Various
Studies and Fire. A summary of the DC Reserve Fund by Category of Service is at Table A.
Rates
The 2006 DC rates are set out in Table B. The rates are increased January 1 each year in
accordance with the index prescribed by Provincial legislation.
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DC collections in 2006 total $8.2 M, an decrease from 2005 collections of $9.6 M. Of the total
revenue, $7.7 M was attributable to residential development and $0.5 M was for non-residential
development.
Expenses
DC expenses to December 31, 2006 total $5.2 M. DC expenses incurred during 2005
amounted to $6.9 M. Detailed lists are included in the DC Reserve Fund Transactions in Tables
C, D and E. As part of the 2004 by-law, the City has implemented different rates for the Central
Neighbourhoods as compared to the Suburban Areas of the City (as defined in the DC by-law).
Related revenues and expenses broken down by service are shown for both of these areas in
Table E.
Exemptions
DC exemptions in 2006 total $0.5 M compared to $0.5 M in 2005. Of the total exemptions,
$0.1 M was attributable to residential development and $0.4 M was for non-residential
development. Major exemptions are the 50% industrial enlargement exemption, additional
dwelling units in existing residential exemption, downtown core exemption and exemptions for
municipal, Federal and school use and hospital additions. A summary of major exemptions is
included in Table F. Redevelopment allowances are also included in the summary.
Debt
No debt is outstanding in regards to any DC funded projects.
Service-in-Lieu Credits
The City may, by agreement, permit a developer to provide services for development of land in
lieu of payment of the development charge. At December 31, 2006, credits of $5.3 M were
outstanding compared to $5.3 M at the end of 2005. Refer to Table Gfor more details.
Deferral Agreements
At December 31, 2006, there were no deferral agreements outstanding.
Reserve Fund Balances
The DC Reserve Fund at December 31, 2006 was $12.1 M compared to $8.5 M at the end of
2005.
By-law
The current DC by-law came into effect July 1, 2004 for a term of no longer than five years.
The by-law was appealed by the development industry, and the appeal was heard by a member
of the Ontario Municipal Board ("OMB") over a six week period in 2006. The OMB gave its ruling
on September 5, 2006, the result of which was that the overall rate remained unchanged,
however the division of the rate between services was revised. An amendment to the by-law
outlining the revised rate per service was approved by Council at the December 18, 2006
Council meeting.
FINANCIAL IMPLICATIONS:
0
A copy of this report will be provided to the Waterloo Region Home Builders' Association and to
the Minister of Municipal Affairs and Housing.
Ruth-Anne Goetz, CA
Senior Financial Analyst
Daniel R. Chapman, CA
Director, Financial Planning &
Reporting
Pauline Houston, CA
General Manager of Financial
Services & City Treasurer
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