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Town of Tillsonburg Development Charges Study Council Update Monday, April 14 th , 2014

Town of Tillsonburg Development Charges Study Council Update Monday, April 14 th , 2014. Topics. Overview of Development Charges Act Development charges in Tillsonburg Development forecast Services and service levels Development-related capital costs Draft DC Rates Next steps.

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Town of Tillsonburg Development Charges Study Council Update Monday, April 14 th , 2014

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  1. Town of Tillsonburg Development Charges Study Council Update Monday, April 14th, 2014

  2. Topics • Overview of Development Charges Act • Development charges in Tillsonburg • Development forecast • Services and service levels • Development-related capital costs • Draft DC Rates • Next steps

  3. What Are Development Charges? • Fees imposed on development to fund “growth-related” capital costs • As a municipality grows new infrastructure and facilities are required to maintain service levels • Principle is “growth pays for growth”

  4. Overview of theDevelopment Charges Act (DCA) • DCs are imposed by by-law • Maximum life of a DC by-law is 5 years after the day it comes into force (Town’s by-law expires on 2 October, 2014) • Prior to passing a by-law Town must: • undertake a background study • hold at least one public meeting • Appeals adjudicated at OMB

  5. Overview of the DCA • Charges levied on a service basis • Town given discretion to define services • Two types of service:

  6. Overview of the DCA • Service exclusions • Cultural and entertainment facilities, including museums, theatres and art galleries • Tourism facilities including convention centres • Parkland acquisition • Hospitals • Headquarters for general administration of municipalities and local boards • Waste management

  7. Overview of the DCA • Eligible capital costs • Costs to acquire and improve land • Building and structure costs • Rolling stock with a useful life of 7 years or more • Furniture and equipment, excluding computer equipment • Development-related studies • Interest and financing costs

  8. Steps to Calculating a DC 1. Anticipated amount, type and location of development must be estimated Development Forecast 2. Increase in need for service may not exceed average level of service immediately preceding background study Calculate 10-Year Historical Service Levels 3. Increase in the need for service attributable to the anticipated development must be estimated Identify Development-Related Capital Costs 4. Reduce capital costs by legislated deductions Grants/Other Contributions Required Service Discount Replacement/ Benefit to Existing Available DC Reserves Post-Period Benefit Costs Eligible for DC Recovery 5. Allocation of eligible costs by type of development Non-Residential Sector (per m2 of GFA) Residential Sector (per unit)

  9. Step 1 – Development Forecast • 2 planning horizons: • 10 years for general ‘soft’ services (2014-2023) • Long term for Roads and Related and Stormwater services (2014-2031) • Town-wide uniform rates • Non-residential development is exempt but a charge must still be calculated

  10. Residential Forecast Comparison Source: Hemson, 2009 DC Background Study; Watson and Associates (2014)

  11. Non-Residential Forecast Comparison Source: Hemson, 2009 DC Background Study; Watson and Associates (2014) Note. New Study figures include provision for No Fixed Place of Work employment.

  12. Step 2 – Services

  13. Step 3 – Development-Related Capital Costs • Council must express its intent to carry out the capital program • Based on 2014 capital budget and 5 year forecast plus: • Input from staff, particularly for years 5-10 • Recovery for specific oversized works: • Pumper/Tanker (2012) – $202,057

  14. Step 3Capital Cost Deductions Total Gross Cost ($millions) $ 11.8 Less: Grants & Subsidies $ 0.0 Less: Benefit to Existing Share $ 3.4 Less: 10% Discount $ 0.1 Less: Reserve Funds $ 0.8 Less: Post-2023 Benefit $ 1.5 DC Eligible Cost $ 6.1

  15. DC Eligible Costs Total DC Eligible Costs = $6.1 million

  16. Step 3 – Development-Related Program

  17. Step 3 – Development-Related Program

  18. Step 3 – Development-Related Program

  19. Program Does Not Necessarily Maximise Potential DC Funding

  20. Step 4 – Allocation of DC Eligible Costs All Services $6.1 M Res Non-Res $4.6 M $1.5 M

  21. DC Rate Calculation Residential: • Expressed as a charge per capita • Levied as charge per unit and by unit type • Apartments differentiated by bedroom Non-Residential: • Expressed as a charge per square metre of gross floor area (GFA) • Single rate calculated for all non-residential uses

  22. DraftResidential Rates

  23. DraftNon-Residential Rates

  24. Residential Rates Are Similar To Current Rates

  25. Residential Rate Comparison

  26. Non-Residential (Retail) Rate Comparison

  27. Non-Residential (Industrial) Rate Comparison

  28. Next Steps

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