by Sylene Argent
During a special meeting Monday, May 3, Council received the Town of Essex 2021 Development Charges (DC) Update Study, which consulting firm, Watson and Associates Economists Limited prepared.
This meeting was mandatory, to provide for an update to the Town’s existing DC By-law. The intent was to remove the mandatory 10 percent deduction that has been in the Town’s By-Law in the past for some services and incorporate policy changes as a result of Bills 108, 197, and 213, it notes in the Report to Council.
Council will consider adopting the changes to the By-Law at the June 21 meeting. This will align the Town’s By-Law with Provincial changes that have been implemented since the Town adopted its current DC By-law in 2019.
There is a minimal 60-day period to the passage of the DC By-Law.
Nancy Neale, a Senior Consultant with Watson and Associates Economists Limited, attended the virtual meetings to explain the upcoming changes. She said she began working with Town staff in late February to go through all of the Provincial changes that are required for the policies and By-laws, as well as calculated rates.
DCs are designed to recover the capital costs associated with residential and non-residential growth within a municipality, she explained, such as internal roads, sewers, watermains, roads, sidewalks, streetlights, etc. associated with a subdivision.
Neale noted that it is not necessary for the Town to take immediate action to update the DC By-Law, however, there are pieces of legislation in place that deals specifically with calculating DCs and payment methods.
Neale explained there were four pieces of Provincial legislation that changed since Essex passed its latest DC By-Law. The Development Charges Act overrides the current By-Law. She said it is difficult for people to know which rules are in certain cases, so most municipalities are choosing to update their By-Laws.
Through the More Homes, More Choices Act, she explained, DCs were paid when the building permit was issued. Now, those categorized under rental and institutional pay at occupancy in six equal annual installments. Non-profits pay DCs in 21 equal annual payments. In addition, the DC rate is frozen for Site Plan or Zoning By-law amendments until two-years after approval
This change, Neale said, does take administrative work to track. The Development Charges Act, she added, does allow for interest to be added to the payments. This can be done separate and outside of the By-Law.
Councillor Steve Bjorkman asked if there was a limit a municipality could charge in terms of interest. Neale responded that currently, the Province has not mandated that. Kate Giurissevich, Manager of Finance and Business Services, said historically, the Town charges prime plus two-percent. However, a report on this will come to Council in the near future for consideration.
Because of Bill 197 (COVID-19 Recovery Economic Recovery Act) the municipality can only collect DCs for certain services. For Essex, collection will continue to be the same, with a few minor tweaks, Neale said.
In addition, the Classes of Services may be established for components of a service or a combination of services. As such, the Town is creating the following “Classes of Services” Public Works (Operations Facilities, Vehicles & Equipment); and Growth Studies The Town is already collecting for these items through its current D.C. By-law. This change is largely administrative.
The DC Background Study and By-Law are being amended to remove the mandatory 10 percent from the Outdoor and Indoor Recreation Services, which are being combined into one service “Parks and Recreation Services,” in addition to Library Services and Administration – Community Based Studies. Neale said now, there is an opportunity to increase charges related to these services.
Rate changes for Essex, she said, will result in the residential DCs being raised from $8095 to $8179. Non-residential rates would decrease by one-cent per square foots, however, currently the Town of Essex is not imposing DCs on commercial and industrial growth.
Councillor Chris Vander Doelen would like the charges calculated all together on the schedule per ward as some Wards have different rates for water and sanitary, for instance.
A Community Benefit Charge, Neale said, was introduced for collection by lower-tier or single-tier municipalities. It is limited to four percent of the market value of land for those eligible. It can only be applied to dwellings that are five or more stories high and have 10 or more residential units. Municipalities have until September of 22 to get this in place.
In addition, By-Law 1850 is being amended. DC policies in the By-Law are being updated, with respect to DC installment payments; DC rate freeze; interest policies; mandatory exemption for new ancillary units; mandatory exemption for universities receiving operating funds from the government; and additional and refined definitions, where required.
As far as ancillary buildings are concerned, Lori Chadwick, Director of Development Services, said the Town is currently looking into Secondary Dwelling Units and how and where such homes can be implemented within the municipality. Currently, the Town is looking to allow, in certain places where requirements are met, the addition of Secondary Dwelling Units either in an existing home or ancillary building, not both. She believes Secondary Dwelling Units would be DC exempt.