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Home My WebLink AboutFIN-09-063 - 2008 Development Charges Reserve Fund REPORT REPORT TO: Councillor B. Vrbanovic, Chair, and Members of the Finance and Corporate Services Committee DATE OF MEETING: June 1, 2009 SUBMITTED BY: Dan Chapman, General Manager of Financial Services and City Treasurer PREPARED BY: John Sonser, Senior Financial Analyst WARD(S) INVOLVED: ALL DATE OF REPORT: May 20, 2009 REPORT NO.: FIN-09-063 SUBJECT: 2008 DEVELOPMENT CHARGES RESERVE FUND RECOMMENDATION: For information. BACKGROUND: The Development Charges Act (1997) requires that the Treasurer submit to Council an annual statement of the Development Charge (DC) Reserve Fund. REPORT: 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, Library and Fleet 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 . A summary of the DC Reserve Fund by Category of Service is at Table A. Studies and Fire Rates The 2008 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. Revenue DC collections in 2008 total $7.9 M, a decrease from 2007 collections of $9.5 M. Of the total revenue, $7.1 M was attributable to residential development and $0.8 M was for non-residential development. ×Ú ó ï ó ï Expenses DC expenses to December 31, 2008 total $14.7 M. DC expenses incurred during 2007 Detailed lists are included in the DC Reserve Fund Transactions in Tables amounted to $9.7 M. 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 2008 total $0.9 M compared to $0.8 M in 2007. Of the total exemptions, $0.4 M was attributable to residential development and $0.5 M was for non-residential development. Major exemptions are the 50% industrial enlargement exemption, additional dwelling units in existing residential exemption, downtown core exemption, redevelopment allowance and exemptions for municipal, Federal and school use as well as hospital additions. A summary of major exemptions is included in Table F. 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, 2008, credits of $4.6 M were Table G for more details. outstanding compared to $4.0 M at the end of 2007. Refer to Deferral Agreements At December 31, 2008, there were no deferral agreements outstanding. Reserve Fund Balances The DC Reserve Fund at December 31, 2008 was $6.7 M compared to $13.0 M at the end of 2007. By-law The current DC by-law came into effect July 1, 2004. The 2009 DC Background Study is in the final stages of completion and is expected to be passed by Council and enacted in June, 2009 with the new by-law to take effect July 1, 2009. FINANCIAL IMPLICATIONS: None. COMMUNICATIONS: A copy of this report will be provided to the Waterloo Region Home Builders’ Association and to the Minister of Municipal Affairs and Housing. ACKNOWLEDGED BY: Dan Chapman, General Manager of Financial Services and City Treasurer ×Ú ó ï ó î ×Ú ó ï ó í TABLE B DEVELOPMENT CHARGE RATES CentralSuburban Residential DevelopmentNeighbourhoodsAreas Single detached or semi-detached dwelling$5,399$8,943/ dwelling unit Townhouse or street townhouse dwelling$5,213$8,633/ dwelling unit Multiple or duplex dwelling$3,536$5,858/ dwelling unit Lodging House$1,862$3,083/ dwelling unit Non-Residential Development Gross floor area of building$14.09$15.10/ square metre $1.30$1.40/ square foot ×Ú ó ï ó ì TABLE C CITY OF KITCHENER SUBURBAN AREA DEVELOPMENT CHARGES 861021 2008 TRANSACTIONS Balance December 31, 200714,122,509 Revenues DC Act Revenue7,544,076 Investment Income 654,733 Total Revenues 8,198,809 Expenditures City Share of Subdivisions 268,320 Engineering Studies 160,912 Grand River South Pumping Station 200,000 Freeport Pumping Station Upgrade 950,000 Borden Greenway Trunk Sewer 253,000 Heritage Impact Assessments 19,140 DC Study 57,182 Planning Studies 33,930 Strasburg Road 600,000 Blockline Road4,171,104 Idlewood Creek 285,942 New Watermains 188,814 Activa Group Sportsplex4,636,126 Bridgeport Community Centre 247,228 Community Trails 33,896 Trail Crossings 30,459 General Park Development 105,963 Major Park Development 248,462 Fleet Acquisitions 290,351 Consolidated Maintenance Facility 350,000 Total Expenditures13,130,829 Balance December 31, 2008 9,190,489 ×Ú ó ï ó ë TABLE C CITY OF KITCHENER CENTRAL NEIGHBOURHOODS DEVELOPMENT CHARGES 861022 2008 TRANSACTIONS Balance December 31, 2007(1,152,437) Revenues DC Act Revenue341,139 Investment Income(101,863) Total Revenues239,277 Expenditures Heritage Impact Assessments2,860 DC Act Study7,415 Planning Studies5,070 Blockline Rd463,456 Intensification Allowance286,222 Activa Group Sportsplex692,754 Bridgeport Community Centre36,942 Community Trails5,065 Trail Crossings4,551 General Park Development15,834 Major Park Development37,126 Total Expenditures1,557,295 Balance December 31, 2008(2,470,456) ×Ú ó ï ó ê TABLE D CITY OF KITCHENER DEVELOPMENT CHARGES RESERVE 2008 EXPENSES Funded fromFunded from SuburbanCentral AreaNeighbourhoodsOther DC ReserveDC ReserveFunding City Share of Subdivisions268,320 - Engineering Studies160,912 - Grand River South Pumping Station200,000 1,080,000 Freeport Pumping Station Upgrade950,000 Borden Greenway Trunk Sewer253,000 110,000 Heritage Impact Assessments19,140 2,860 - DC Study57,182 7,415 - Planning Studies33,930 5,070 156,000 Strasburg Road600,000 - Blockline Road4,171,104 463,456 1,158,640 Idlewood Creek285,942 1,143,770 Intensification Allowance286,222 - New Watermains188,814 67,186 Activa Group Sportsplex4,636,126 692,754 1,451,120 Bridgeport Community Centre247,228 36,942 31,570 Community Trails33,896 5,065 233,039 Trail Crossings30,459 4,551 3,890 General Park Development105,963 15,834 216,203 Major Park Development248,462 37,126 32,412 Fleet Acquisitions290,351 370,407 Consolidated Maintenance Facility350,000 4,436,000 13,130,8291,557,29510,490,237 ×Ú ó ï ó é ×Ú ó ï ó è ×Ú ó ï ó ç ×Ú ó ï ó ïð ×Ú ó ï ó ïï TABLE F DEVELOPMENT CHARGES 2008 EXEMPTIONS 50% Industrial Enlargement88,289 Accessory Building 10,948 Additional Dwelling Unit(s) in Existing 194,993 Conversion of Use 10,653 Downtown Exemption 205,772 Local Boards 22,528 Municipal Use 107,778 Provincial Use 224 Public Hospital Addition 41,247 Redevelopment Allowance 264,037 946,469 ×Ú ó ï ó ïî ×Ú ó ï ó ïí ×Ú ó ï ó ïì