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HomeMy WebLinkAboutCS 08-08 CLUJ o~ REPORT TO EXECUTIVE COMMITTEE 1 Ii ~ ub Report Number: CS 08-08 Date: May 12, 2008 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Seaton and City Development Charge and Financial Impact Studies Recommendation: 1. That Report CS 08-08 of the Director, Corporate Services & Treasurer be received; 2. That the provisions of the City's Purchasing Policy, Item 04.09 be waived and the Director, Corporate Services & Treasurer be authorized to engage the firm of Watson & Associates Economists for the Development Charge and Financial Impact Studies as provided for in the 2008 Current Budget and as discussed in this report; and, 3. That the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect hereto. Executive Summary: It is now appropriate time to commence the City's responsibilities in regards to the Seaton Financial Impact Study (previously approved by Council), the Seaton Development Charge Study and the periodic review and update of the City's Development Charge Study. The City wide Financial Impact Study will incorporate all aspects of the above referenced studies. The Seaton project or development is at a stage where the City should commence the various financial studies including development charges. The Seaton Development Charge and related financial studies will provide the City information and options to assist Council in making decisions. The dollar value of these studies is estimated to be $136,000 and the City's Purchasing Policy, Item 04.09 indicates the acquisition of consulting and professional services for this dollar value may also be made through the Request for Proposal process. Therefore, Council approval is requested to waive the Policy requirement in order to engage the firm of Watson & Associates. However, where it is felt beneficial for business reasons to not undertake this process and to work with a particular company, Council may so direct. Given the previous financial studies undertaken by this company for the City and the Region, it is beneficial both financially and from a business perspective to continue that relationship with future studies. Report CS 08-08 Date: May 12, 2008 Subject: Seaton and City Development Charge Study Page 2 '1 Cl ',/ Financial Implications: Financing for these studies will be provided through several sources, as provided for by Council in recent Current Budgets and in the proposed 2008 Current Budget as explained below in the Background section of this report. The total estimated cost of all four studies is $136,000 which will be financed from the Development Charge Reserve Fund and the Continuing Studies Reserve. Additionally, $40,000 was provided in the 2008 Current Budget for the study of financing, partnerships and other aspects of the Duffin Heights Community Facility. Sustainability Implications: In the City's efforts to achieve short and longer term financial stability and sustainability, these studies are crucial. Background: The firm of Watson & Associates is recommended as they have undertaken the 1999 and 2004 development charges studies. This firm is also undertaking all similar studies for the Region and therefore, there will be benefits both to the Region and the City by using the same consultant. By continuing to use this firm, the City maintains the continuity of information and practices and avoids any learning curve/cost for any new consultant. Moreover, in 2005, when it was anticipated the Seaton Financial Impact Study would commence, under Resolution 128/05 Council approved hiring this firm for that study. It is now time to commence all of these financial studies, as some of the development data is becoming available. The Development Charges Act states that development charge by-law expires after five years and since the last study was undertaken in the summer of 2004, the new study must be completed no later than summer 2009. The Seaton Financial Impact Study and the Seaton DC Study should also commence now as they are integral parts of the City study. Growth Pays for Growth Until recently, the financing of municipal infrastructure was becoming more challenging as the Provincial Government devolved its responsibility for infrastructure development to municipalities. The only two alternatives for funding infrastructure development was through the property tax base or development charges. Many of the projects related to growth are now basically financed through development charges to varying levels. The portion of growth costs not funded or captured by development charges is financed through the property tax base. The two proposed development charges studies (Seaton and City) will provide the City the opportunity to adopt or move closer towards a "growth pays for growth" philosophy or policy. The (DC) study and the supporting documentation will allow the City to formulate a development charge rate that will allow the City the maximum recovery allowed in the legislation. Changes to the legislation, if deemed beneficial may also be explored. Report CS 08-08 Date: May 12, 2008 Subject: Seaton and City Development Charge Study Page 3 -\ 1\ " t ~ i i'; l~ J. Given the importance and magnitude of the above mentioned studies, a City wide Financial Impact Study and Forecast will be necessary and beneficial. The terms and conditions of the engagement of Watson & Associates will provide for all such studies. The studies will be as follows: . Seaton Financial Impact Study . Seaton Development Charge Study . City Development Charge Study . City Financial Impact Study . Community Facilities Study The financial portion of a Community Facilities Study is to provide assistance to staff in reviewing the financing and financial impact of various proposals, including possible partnerships, with the development of this facility. Work will be undertaken as the need arises. A total of $40,000 has been provided in the 2008 Current Budget - General Government Purchase of Services for the various studies that may be required. The budget indicates a Duffin Heights facility but it is possible that other areas of the City could also be considered. Attachments: Not applicable Prepared I Approved I Endorsed By: CL6~' d Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City, Council " ,/ .--, ---....---..-