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HomeMy WebLinkAboutFIN 10-24Report to Council Report Number: FIN 10-24 Date: June 24, 2024 From: Stan Karwowski Director, Finance & Treasurer Subject: Annual Indexing – Development Charges, Community Benefit Charges and Seaton Financial Impacts Agreement - File: F-4920-001 Recommendation: 1. That Report FIN 10-24 regarding Annual Indexing be received; 2. That effective July 1, 2024 to June 30, 2025, as provided for in By-law No. 7953/22, the Development Charges referred to in Schedule “C” of that By-law be increased by 4.6 percent; 3. That effective July 1, 2024, as provided for in By-law No. 7954/22, the Community Benefit Charges referred to in Schedule “A” of that By-law be increased by 4.6 percent; 4. That effective July 1, 2024 the payments related to “10 percent Soft Services”, as provided for by the Seaton Financial Impacts Agreement dated November 26, 2015, be increased by 4.6 percent; and 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. Executive Summary: The purpose of this report is to approve the annual indexing for the City’s development charges, community benefit charges and the Seaton FIA fees. The Development Charges Act 1997 and Ontario Regulation 82/98, and By-law No. 7953/22 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 City also passed its Community Benefit Charges Strategy on July 11, 2022 and By-law No. 7954/22, which also provides for an annual adjustment of the Community Benefit Charges (CBC) fee. The Building Construction Price Index for the non-residential buildings construction for the annual period ending March 31, 2024 is 4.6 percent. Bill 23, More Homes, Built Faster Act, was passed on November 28, 2022, and as a result the City was required to phase in the maximum DC fee over a 4-year period. As of July 12, 2023, the City entered into Year 2 of the phase-in and was charging 85 percent of the DC fee set in the 2022 DC Background Study. On June 6, 2024, the Province gave royal assent to Bill 185, Cutting Red Tape to Build More Homes Act, which repealed the mandatory requirement for municipalities to phase in their DC fees. The DC fees set out in Attachment 1 reflects the removal of the DC fee reduction and is the maximum fee the City can charge. The below graph FIN 10-24 June 24, 2024 Subject: Annual Indexing – Development Charges, Community Page 2 Benefit Charges and Seaton Financial Impacts Agreement shows the timeline of the City’s DC fee since the July 2022 DC Background Study was approved by Council: The DC fees for a single/semi-detached dwelling will be $37,468 (City-wide) and $21,656 (Seaton only) at July 1, 2024. Before Bill 185 received royal assent, these fees were $30,448 (City-wide) and $17,599 (Seaton only), this results in a fee increase of $7,020 (City-wide) and $4,057 (Seaton only) per single/semi-detached dwelling. $31,898 $25,518 $28,657 $30,448 $35,824 $37,468 $18,437 $14,749 $16,564 $17,599 $20,707 $21,656 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 July 12, 2022 (New DCs) Nov 28, 2022 (Bill 23 Phase-In 80%) July 1-11, 2023 (CPI Index) July 12, 2023 (Bill 23 Phase-In 85%) June 6, 2024 (Bill 185 Phase-In Removed) July 1, 2024 (CPI Index) City DC Fee: Single & Semi-Detached July 2022 to July 2024 (with Bill 23) City-Wide Seaton FIN 10-24 June 24, 2024 Subject: Annual Indexing – Development Charges, Community Page 3 Benefit Charges and Seaton Financial Impacts Agreement The graph above shows a comparison of the current lower tier municipality DC fee for a single or semi-detached home. Although the City will be indexing its fee by 4.6 percent on July 1, 2024, the City of Pickering continues to have one of the lowest DC rates across the GTHA. Adoption of Recommendations 2 to 4 of this report will put into effect the higher rates for the period of July 1, 2024 to June 30, 2025. 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 4.6 percent effective July 1, 2024 to June 30, 2025. Attachment 2 provides the DCs by service category for the Seaton lands, and the new rates with the indexing of 4.6 percent effective July 1, 2024 to June 30, 2025. The additional charges applicable to development in Seaton as approved in the Seaton Financial Impacts Agreement (FIA) is also reflected in this attachment. Attachment 3 provides the CBC fee with the new rates reflecting the annual indexing of 4.6 percent. Relationship to the Pickering Strategic Plan: The recommendations in this report respond to the Pickering Strategic Plan Corporate Key to Deliver on Good Governance – Open & Transparent Decision Making. $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Pickering Whitby Oshawa Ajax Clarington Markham Brampton Mississauga Vaughan Richmond Hill Oakville DC Fee Comparison FIN 10-24 June 24, 2024 Subject: Annual Indexing – Development Charges, Community Page 4 Benefit Charges and Seaton Financial Impacts Agreement Financial Implications: Increasing the development charges and community benefit charges based on an increase in the construction price index will assist in keeping the revenues generated in line with current construction costs. Discussion: The purpose of this report is to approve the annual indexing for the City’s Development Charges, Community Benefit Charges, and the Seaton FIA fees. As provided for in Ontario Reg. 82/98, s.7, and in section 16 of the City’s By-law No. 7953/22 and in section 2.13 of By-law No. 7954/22, the Development Charges and Community Benefit Charges imposed 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, 2024. This will increase revenues to help fund growth related capital projects. 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 4.6 percent for the annual period from April 1, 2023 to March 31, 2024. The change is reflected in the tables attached. DC By-law No. 7953/22, section 16(1)(a) provides that 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 July 1, 2024 as a result of the 2022 DC Background Study. Attachment 4 provides the change in rates in Schedule “C” from based on the 4.6 percent indexing. CBC By-law No. 7954/22, section 2.13(a) provides that the rates in Schedule “A” shall be adjusted annually in accordance with the change in the index for the most recently available annual period ending March 31, similar to the DCs. Attachment 5 provides the change in rates in Schedule “A” based on the 4.6 percent 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. Please note that of all the three services collectible based on the Seaton FIA, the “10 percent Soft Services” is the only service to be indexed. A few of the service categories that are indexed under the “10 percent Soft Services” are recreation facilities, library and operations facilities & vehicles. The municipal buildings and community uses service categories are not indexed annually. Attachment 6 provides further details on these charges with the 4.6 percent 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. Subject to 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 10-24 June 24, 2024 Subject: Annual Indexing – Development Charges, Community Page 5 Benefit Charges and Seaton Financial Impacts Agreement Attachments: 1. City-Wide Development Charges (excludes Seaton Lands) – Effective July 1, 2024 2. Seaton Lands Development Charges and Financial Impacts Agreement Charges – Effective July 1, 2024 3. Community Benefits Charge – Effective July 1, 2024 4. Schedule “C” – City of Pickering Schedule of Development Charges 5. Schedule “A” – City of Pickering Schedule of Community Benefit Charges 6. Seaton Lands – Financial Impacts Agreement Charges, Section 5.1 Prepared By: Approved/Endorsed By: Original Signed By: Original Signed By: Jason Bekramchand Stan Karwowski Senior Financial Analyst – Capital & Debt 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 10-24 City of Pickering City-Wide Development Charges (Excludes Seaton Lands) Development Charges (DC) By-law No. 7953/22 Effective July 1, 2024 - June 30, 2025 Per Residential Dwelling Unit by Type Non-Residential Charges Service Category Single and Semi- Detached Dwelling Apartments - 2 Bedrooms + Apartments - Bachelor and 1 Bedroom Other Multiples Non-Residential per ft² of Total Floor Area Other Services Related to a Highway $876 $510 $312 $675 $0.40 Fire Protection Services 1,381 803 493 1,064 0.62 Parks and Recreation Services 15,591 9,067 5,564 12,010 1.21 Library Services 2,871 1,669 1,024 2,212 0.22 Growth-Related Studies 276 161 99 213 0.04 Stormwater Management 540 315 193 416 0.25 By-Law Enforcement Services 121 70 43 93 0.05 Transportation 15,812 9,196 5,644 12,180 5.56 Total $37,468 $21,791 $13,372 $28,863 $8.35 1 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside provision of the Transportation requirements in addition to other funding contributions. of the Development Charges Act concerning Attachment 2 to Report FIN 10-24 City of Pickering Seaton Lands Development Charges and Financial Impacts Agreement (FIA) Charges Development Charges (DC) By-law No. 7953/22 and FIA Article 5 Effective July 1, 2024 - June 30, 2025 Service Category Service Category Other Services Related to a Highway Fire Protection Services Parks and Recreation Services Library Services Growth-Related Studies Stormwater Management By-Law Enforcement Services 1Transportation Total DC By-law No. 7953/22 2Total Soft Services Non Indexed: 3 Municipal Buildings 4Community Uses Total SLG FIA Total Charges-Seaton Lands Per Residential Dwelling Unit by Type Single and Apartments - 2 Apartments - Other Semi- Bedrooms +Bachelor and 1 Multiples Detached Bedroom Dwelling $876 $510 $312 $675 1,381 803 493 1,064 15,591 9,067 5,564 12,010 2,871 1,669 1,024 2,212 276 161 99 213 540 315 193 416 121 70 43 93 0 0 0 0 $21,656 $12,595 $7,728 $16,683 1,236 564 564 978 189 86 86 150 300 137 137 238 $1,725 $787 $787 $1,366 $23,381 $13,382 $8,515 $18,049 Non-Residential Charges Non-Residential (per net Ha of per ft² of Total Prestige 5Floor Area Employment Land in Seaton) $0.40 0.62 1.21 0.22 0.04 0.25 0.05 0.00 $13,738 21,722 42,202 7,868 1,272 8,497 1,837 0 $2.79 $97,136 0.144 n/a n/a $0.144 $2.934 0.144 n/a n/a $0.144 $97,136/ha & $0.144/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 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. indexing. Attachment 3 to Report FIN 10-24 City of Pickering Community Benefit Charges (CBC) By-law No. 7954/22 Community Benefits Charges Effective July 1, 2024 - June 30, 2025 CBC Unit Type Charge Apartments - Bachelor and 1 Bedroom $772 Apartments - 2 Bedrooms +$1,257 Attachment 4 to Report FIN 10-24 Schedule "C" City of Pickering Schedule of Developement Charges-DC By-law No. 7593/22 Effective June 6, 2024 Per Residential Dwelling Unit By Type Non-Residential Charges Non- Prestige Single and Apartments - Residential Employment Semi- Apartments - 2 Other Bachelor and 1 per Sq. Ft of Land in Detached Bedrooms +MultiplesBedroom Total Floor Seaton (per DwellingService Category Area Sq. Ft) Other Services Related to a Highway $838 $487 $299 $646 $0.38 $13,133 Fire Protection Services 1,321 768 472 1,017 0.60 20,767 Parks and Recreation Services 14,906 8,668 5,320 11,482 1.16 40,346 Library Services 2,745 1,596 979 2,115 0.21 7,522 Growth-Related Studies 264 154 94 203 0.03 1,216 Stormwater Management 517 301 184 398 0.24 8,124 By-Law Enforcement Services 116 67 42 89 0.04 1,756 Total Municipal Wide Services $20,707 $12,041 $7,390 $15,950 $2.66 $92,864 Outside of Seaton Lands: 1Transportation 15,117 8,792 5,396 11,644 5.31 0 Total Services Outside of Seaton Lands $15,117 $8,792 $5,396 $11,644 $5.31 $0 Seaton $20,707 $12,041 $7,390 $15,950 $2.66 $92,864 A Rest of Pickering-City wide $35,824 $20,833 $12,786 $27,594 $7.97 N/A B Effective July 1, 2024: Indexed at 4.6% Per Residential Dwelling Unit By Type Non-Residential Charges Service Category Single and Semi- Detached Dwelling Apartments - Apartments - 2 Bachelor and 1 Bedrooms +Bedroom Other Multiples Non- Prestige Residential Employment per Sq. Ft of Land in Total Floor Seaton (per Area Sq. Ft) Other Services Related to a Highway $876 $510 $312 $675 $0.40 $13,738 Fire Protection Services 1,381 803 493 1,064 0.62 21,722 Parks and Recreation Services 15,591 9,067 5,564 12,010 1.21 42,202 Library Services 2,871 1,669 1,024 2,212 0.22 7,868 Growth-Related Studies 276 161 99 213 0.04 1,272 Stormwater Management 540 315 193 416 0.25 8,497 By-Law Enforcement Services 121 70 43 93 0.05 1,837 Total Municipal Wide Services $21,656 $12,595 $7,728 $16,683 $2.79 $97,136 Outside of Seaton Lands: 1Transportation 15,812 9,196 5,644 12,180 5.56 0 Total Services Outside of Seaton Lands $15,812 $9,196 $5,644 $12,180 $5.56 0 Seaton Lands $21,656 $12,595 $7,728 $16,683 $2.79 $97,136 C Rest of Pickering-City wide $37,468 $21,791 $13,372 $28,863 $8.35 N/A D $ Increase - Seaton Lands $949 $554 $338 $733 $0.13 $4,272 A-C $ Increase - Rest of Pickering-City wide $1,644 $958 $586 $1,269 $0.38 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. Attachment 5 to Report FIN 10-24 Schedule "A" City of Pickering Community Benefit Charges (CBC) By-law No. 7954/22 Effective July 1, 2023 CBC Unit Type Charge Apartments - Bachelor and 1 Bedroom $738 Apartments - 2 Bedrooms +$1,202 Effective July 1, 2024: Indexed at 4.6% CBC Unit Type Charge Apartments - Bachelor and 1 Bedroom $772 Apartments - 2 Bedrooms +$1,257 $ Increase $ Apartments - Bachelor and 1 Bedroom $34 Apartments - 2 Bedrooms +$55 Attachment 6 to Report FIN 10-24 City of Pickering Seaton Lands - Financial Impacts Agreement (FIA) Charges, Section 5.1 Section 5.1: 10% Soft Services Contribution* Effective July 1, 2024 - June 30, 2025 Service Category 10% Soft Services 1Development-Related Studies Parks Development & Trails Indoor Recreation Facilities Library Operations Facilities & Vehicles Total Soft Services Per Residential Dwelling Unit By Type **Non-Residential Charges Single and Semi- Detached Dwelling $6.59 313.37 653.82 156.96 105.26 $1,236.00 Apartments - 2 Bedrooms + $3.00 143.22 297.94 71.73 48.11 $564.00 Apartments - Bachelor and 1 Bedroom $3.00 143.22 297.94 71.73 48.11 $564.00 Other Multiples $5.21 248.51 516.35 124.47 83.46 $978.00 Non- Residential per Sq. Ft of Total Floor Area Prestige Employment Land in Seaton (per Sq. Ft) $0.003 0.028 0.054 0.012 0.047 $0.003 0.028 0.054 0.012 0.047 $0.144 $0.144 * 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 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 for the 10% soft services the 10% deduction. deduction.