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Home My WebLink AboutFIN 10-21 Report to Executive Committee Report Number: FIN 10-21 Date: June 7, 2021 From: Stan Karwowski Director, Finance & Treasurer Subject: Annual Indexing – Development Charges and Seaton Financial Impacts Agreement -File: F-4920-001 Recommendation: 1.That Report FIN 10-21 of the Director, Finance & Treasurer be received; 2.That effective July 1, 2021 as provided for in By-law No. 7595/17, as amended by By-laws No. 7727/19 and No. 7802/20, the Development Charges referred to in Schedule “C” of that By-law be increased by 3.1 per cent; 3.That effective July 1, 2021 the payments related to “10 per cent Soft Services” asprovided for by the Seaton Financial Impacts Agreement dated November 26, 2015 beincreased by 3.1 per cent; and 4.That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. Executive Summary: The Development Charges Act 1997 and Ontario Regulation 82/98, and By-law No. 7595/17, as amended by By-laws No. 7727/19 and No. 7802/20 provide for an automatic annual adjustment to the City’s development charges (the “DCs”) based on the Building Construction Price Index in order to keep development charges revenues current with construction costs. The Building Construction Price Index for the non-residential buildings construction for the annual period ending March 31, 2021 is 3.1 per cent. Adoption of Recommendations 2 and 3 of this report will put into effect the higher rate for the period of July 1, 2021 to June 30, 2022. Attachment 1 provides the DCs by service category for the City-wide area in Pickering excluding the Seaton lands with the new rates reflecting the annual indexing of 3.1 per cent. Attachment 2 provides the DCs by service category for the Seaton lands, and the new rates with the indexing of 3.1 per cent as well as additional charges applicable to development in Seaton as approved in the Seaton Financial Impacts Agreement (FIA). FIN 10-21 June 7, 2021 Subject: Annual Indexing and Development Charges for Page 2 City-Wide and Seaton Lands Financial Implications: Increasing the development charges based on an increase in the construction price index will assist in keeping the revenues generated in line with current construction costs. Discussion: As provided for in Ontario Reg. 82/98, s.7, and in section 16 of the City’s By-law No. 7595/17, as amended by By-laws No. 7727/19 and No. 7802/20, the development charges charged by the City for all types of development shall be indexed annually without amending the By-law. Adoption of the recommendations contained in this report will allow that increase to take effect July 1, 2021, thereby assisting in keeping revenues in line with the costs that development charges fund. Statistics Canada indicates that the non-residential buildings construction price index (an indicator of our costs of construction) for the Toronto area has increased by 3.1 per cent for the annual period from April 1, 2020 to March 31, 2021. The change is reflected in the tables attached. The 2017 DC Background Study was completed in December 2017, and further amended by the 2019 DC Update Study and 2020 DC Update Study. DC By-law No. 7595/17, section 16(1)(ii) provides that commencing on July 1, 2019, the rates in Schedule “C” shall be adjusted annually in accordance with the change in the index for the most recently available annual period ending March 31. Schedule “C” is applicable to the new DCs rates effective on January 1, 2018 as a result of the 2017 DC Background Study, and as amended by the 2019 and 2020 DC Update Studies. Attachment 4 provides the change in rates in Schedule “C” from Dec. 15, 2020 to July 1, 2021 based on the 3.1 per cent indexing. Continuing from previous years, City staff are including in the DCs annual indexing report, additional charges applicable to development in Seaton lands as approved in the Seaton FIA. Sections 4 - 6 of the FIA outline the DC-related financial terms of the agreement. Note that of all the 3 services collectible based on the Seaton FIA, the “10 per cent Soft Services” is the only service to be indexed. Attachment 3 provides further details on these charges with the 3.1 per cent indexing. The Seaton DC rates are lower than the City-wide DC rates to reflect the fact that the Seaton Landowner Group (SLG) is responsible to design, build and pay for the Seaton internal roads network. Upon Council’s approval of the recommendations contained in this report, the development charges brochure will be updated to reflect the approved rates. The updated brochure will be posted on the City’s website and made available at various counters throughout the Civic Complex. FIN 10-21 June 7, 2021 Subject: Annual Indexing and Development Charges for Page 2 City-Wide and Seaton Lands Attachments: 1. City-Wide Development Charges (excludes Seaton Lands) – Effective July 1, 2021 2. Seaton Lands Development Charges and Financial Impacts Agreement (FIA) Charges – Effective July 1, 2021 3. Seaton Lands – Financial Impacts Agreement (FIA) Charges, Section 5.1 4. Schedule “C” – City of Pickering Schedule of Development Charges Prepared By: Approved/Endorsed By: Original Signed By: Original Signed By: Caryn Kong, CPA, CGA Stan Karwowski, CPA, CMA, MBA Senior Financial Analyst – Capital & Director, Finance & Treasurer Debt Management Recommended for the consideration of Pickering City Council Original Signed By: Marisa Carpino, M.A. Chief Administrative Officer Attachment #1 to Report # FIN 10-21 City of Pickering City-Wide Development Charges (Excludes Seaton Lands) Development Charges By-law No. 7595/17, as amended by By-law No. 7797/19 and By-law No. 7802/20 Effective July 1, 2021 to June 30, 2022 Per Residential Dwelling Unit By Type Non-Residential Charges Service Category Singles or Semi- Detached Apt Dwellings with 2 or more bdrms Apt Dwellings with less than 2 bdrms Other Dwellings Non-Residential per Sq. Ft of Total Floor Area Other Services Related to a Highway $498 $315 $223 $403 $0.18 Protection Services 1,014 640 454 820 0.37 Parks and Recreation Services 7,720 4,877 3,456 6,231 0.60 Library Services 1,275 806 571 1,030 0.09 Administration Studies 338 214 151 274 0.12 Stormwater Management 326 206 146 264 0.11 Transportation 1 10,516 6,644 4,706 8,490 2.96 Total $21,687 $13,702 $9,707 $17,512 $4.43 1 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. Attachment #2 to Report # FIN 10-21 City of Pickering Seaton Lands Development Charges and Financial Impacts Agreement (FIA) Charges Development Charges (DC) By-law No. 7595/17, as amended by By-law No. 7727/19, By-law No. 7802/20 and FIA Article 5 Effective July 1, 2021 to June 30, 2022 DC By-law No. 7595/17, as amended by By- law No. 7727/19 and By-law No. 7802/20 Per Residential Dwelling Unit By Type Non-Residential Charges Service Category Singles or Semi- Detached Apt Dwellings with 2 or more bdrms Apt Dwellings with less than 2 bdrms Other Dwellings Non-Residential per Sq. Ft of Total Floor Area 5 Prestige Employment Land in Seaton (per Net Hectare) Other Services Related to a Highway $498 $315 $223 $403 $0.18 $6,168 Protection Services 1,014 640 454 820 0.37 13,039 Parks and Recreation Services 7,720 4,877 3,456 6,231 0.60 20,242 Library Services 1,275 806 571 1,030 0.09 3,048 Administration Studies 338 214 151 274 0.12 4,353 Stormwater Management 326 206 146 264 0.11 3,965 Transportation 1 0 0 0 0 0.00 0 Total DC By-law No.7595/17 (as amended)$11,171 $7,058 $5,001 $9,022 $1.47 $50,815 SLG FIA Per Sq. Ft of Total Floor Area 10% Soft Services 2 $897 $409 $409 $710 $0.104 $0.104 Non Indexed Municipal Buildings 3 189 86 86 150 n/a n/a Community Uses 4 300 137 137 238 n/a n/a Total SLG FIA $1,386 $632 $632 $1,098 $0.104 $0.104 Total Charges-Seaton Lands $12,557 $7,690 $5,633 $10,120 $1.574 $50,815/ha & $0.104/sq. ft 1 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. 2 Breakdown by service category is available upon request. Not applicable to lands owned by the Province. For residential development, payment is due at subdivision registration except for mixed-use or multi-use or multi-residential development blocks subject to site plan approval. For all other development, payment is due prior to building permit issuance. Subject to annual indexing. 3 Applicable to the first 11,280 S.D.Es built on SPL Lands, due prior to building permit issuance. No indexing 4 Applicable to the first 11,280 S.D.Es built on SPL Lands to a maximun payment of $3.3 million; due prior to building permit issuance. No indexing 5 Does not apply to prestige employment land in Seaton, as that development is subject to the per net Ha land area charge instead. Applies to non-residential development in the non-prestige employment land in Seaton. Attachment #3 to Report # FIN 10-21 City of Pickering Seaton Lands - Financial Impacts Agreement (FIA) Charges, Section 5.1 Section 5.1: 10% Soft Services Contribution* Effective July 1, 2021 to June 30, 2022 Per Residential Dwelling Unit By Type **Non-Residential Charges Service Category Singles or Semi- Detached Apt Dwellings with 2 or more bdrms Apt Dwellings with less than 2 bdrms Other Dwellings Non-Residential per Sq. Ft of Total Floor Area Prestige Employment Land in Seaton (per Sq. Ft) Development-Related Studies 1 $4.78 $2.18 $2.18 $3.78 0.002 0.002 Parks Development & Trails 227.43 103.94 103.94 180.36 0.020 0.020 Indoor Recreation Facilities 474.48 215.91 215.91 374.95 0.039 0.039 Library 113.92 52.06 52.06 90.34 0.009 0.009 Operations Facilities & Vehicles 76.39 34.91 34.91 60.57 0.034 0.034 Total $897.00 $409.00 $409.00 $710.00 0.104 0.104 *This contribution is to be indexed with the construction price index prescribed by the DC Act. **FIA version (October 28, 2013) subsection 5.1 and 5.2 permits the City to charge an additional DC to compensate for the 10% soft services deduction. The calculation is based on the DC rate multiplied by 11.11% as stated in the FIA agreement subsection 5.2. 1 19.0% of the DC Recoverable share for the Development Related Studies is comprised of costs that are subject to the 10% deduction. Attachment #4 to Report # FIN 10-21 Schedule "C" City of Pickering Schedule of Developement Charges-DC By-law No. 7595/17, as amended by By-law No. 7727/19 and By-law No. 7802/20 Effective December 15, 2020 Per Residential Dwelling Unit By Type Non-Residential Charges Service Category Singles or Semi- Detached Apt Dwellings with 2 or more bdrms Apt Dwellings with less than 2 bdrms Other Dwellings Non-Residential per Sq. Ft of Total Floor Area Prestige Employment Land in Seaton (per Net Hectare) Other Services Related to a Highwa $483 $306 $216 $391 $0.17 $5,983Protection Services 983 621 440 795 0.36 12,647 Parks and Recreation Services 7,488 4,730 3,352 6,044 0.58 19,633 Library Services 1,237 782 554 999 0.09 2,956 Administration Studies 328 207 147 266 0.12 4,222 Stormwater Management 316 200 142 256 0.11 3,846 Total Municipal Wide Services $10,835 $6,846 $4,851 $8,751 $1.43 $49,287 Outside of Seaton Lands: Transportation 1 10,200 6,444 4,565 8,235 2.87 0Total Services Outside of Seaton Lands $10,200 $6,444 $4,565 $8,235 $2.87 $0 Seaton $10,835 $6,846 $4,851 $8,751 $1.43 $49,287 A Rest of Pickering-City wide $21,035 $13,290 $9,416 $16,986 $4.30 B Effective July 1, 2021 Indexed at 3.1% Per Residential Dwelling Unit By Type Non-Residential Charges Service Category Singles or Semi- Detached Apt Dwellings with 2 or more bdrms Apt Dwellings with less than 2 bdrms Other Dwellings Non- Residential per Sq. Ft of Total Floor Area Prestige Employment Land in Seaton (per Net Hectare) Other Services Related to a Highwa $498 $315 $223 $403 $0.18 $6,168 Protection Services 1,014 640 454 820 0.37 13,039Parks and Recreation Services 7,720 4,877 3,456 6,231 0.60 20,242 Library Services 1,275 806 571 1,030 0.09 3,048 Administration Studies 338 214 151 274 0.12 4,353 Stormwater Management 326 206 146 264 0.11 3,965 Total Municipal Wide Services $11,171 $7,058 $5,001 $9,022 $1.47 $50,815 Outside of Seaton Lands: Transportation 1 10,516 6,644 4,706 8,490 2.96 0Total Services Outside of Seaton Lands $10,516 $6,644 $4,706 $8,490 $2.96 0 Seaton Lands $11,171 $7,058 $5,001 $9,022 $1.47 $50,815 CRest of Pickering-City wide $21,687 $13,702 $9,707 $17,512 $4.43 D $ Increase - Seaton Lands $336 $212 $150 $271 $0.04 $1,528 A-C$ Increase - Rest of Pickering- City wide $652 $412 $291 $526 $0.13 N/A B-D 1. Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions.