by Sylene Argent, Local Journalism Initiative
Council for the County of Essex received an update on the County’s first Development Charges (DC) Background Study at the November 6 meeting, which is the initial phase of moving towards implementing a By-Law.
Development Charges are imposed on developers to pay for growth-related capital costs, such as for new infrastructure or expanding existing facilities to ensure service levels are maintained along with a growing community, Stefan Krzeczunowicz, Associate Partner of Hemson Consulting Ltd., explained.
The background study will establish the maximum charges that can be imposed under legislation.
County Council will need to decide in the future whether to proceed with a by-law, what kind of rules will be in the by-law for who pays and who doesn’t pay, and ways to implement the charges.
Back in May, members of Essex County Council approved funding a Development Charges Study by utilizing up to a max of $60,000 from the Rate Stabilization Reserve, which Hemson Consulting Ltd. is undertaking.
The County currently does not have these charges in place.
"The operating principle behind this has always been that growth should pay for itself, so the financial burden of paying for this new infrastructure is not borne by the existing taxpayers of the County,” Krzeczunowicz said, noting that includes broad pieces of infrastructure that benefits the community as a whole.
Most of the County’s Capital expenses will still be related to maintaining, repairing, and – eventually – rebuilding existing infrastructure through tax-funding, Krzeczunowicz explained. DCs pay for the initial construction of the piece of infrastructure.
Growth-related costs that cannot be funded through DCs will also be tax-funded, Krzeczunowicz said.
DCs are imposed through the passing of a by-law. By-laws have a maximum life of ten-years. Once passed, there is a 40-day appeal period, with the Ontario Land Tribunal adjudicating any potential issues.
Krzeczunowicz added that DCs are imposed through services. The services Krzeczunowicz highlighted the County may be able to impose through a DC by-law include for roads and infrastructure, ambulance, long-term care, public health, childcare, services related to proceedings under the Provincial Offences Act, library, waste-diversion services, and emergency preparedness.
The consultants have been in contact with reps of those services to figure out what may be eligible for DCs.
The process of the study includes creating a forecast for development, identifying the capital needs that may be associated with that new development, determining the levels of service for the past 15-years, identifying costs associated with infrastructure needs, and then deducting any external funding from the costs.
Whatever costs become eligible for DCs are then typically imposed as a charge per unit, and as a charge per square-meter for new building floor area in the non-residential sector, Krzeczunowicz said.
In terms of the forecast, a study was done through the County’s New Official Plan. Krzeczunowicz said the sensible thing would be to root the DC charge with that done for the Official Plan.
The County has shared-funding responsibilities with other municipalities and the city, so Krzeczunowicz said it will be important to ensure any DCs for a shared-service is funding the County’s contributions that go towards that service.
He added that at a minimum the cost for residential and non-residential developers will need to be allocated.
Once the background work is done, Krzeczunowicz said legislation takes over in that there is a specific process for releasing the background study and taking the steps to pass the by-law. That includes releasing the background study 60-days before passing a by-law, and a public meeting needs to be held with notification requirements.
In answering Kingsville Mayor Dennis Roger’s question about the requirement for a webpage, County Manager of Planning Services, Rebecca Belanger, said the County will set that up.
Through her own report, Belanger highlighted that it is anticipated Council will consider adoption of the background study and passage of the by-law in March of 2025.
She added the outcome of the study will inform subsequent decisions and ultimately impact the County’s Budget, as well as the establishment of Development Charge Reserve for the relevant services covered in the Development Charges Study and By-law.
Her report adds the outcome from this work will affect costs incurred to the development community through the imposition of Development Charges, required to be charged at the time of the issuance of building permits.
“I think it is good. It is kind of enlightening. I think during difficult budget seasons, it is imperative of our staff to look for alternative revenue sources to say we are doing all we can when we apply for grants,” Essex Mayor Sherry Bondy said. She was unsure if in-person open houses were in the works, but hoped more than one would be offered to the public.
Kingsville Mayor Dennis Rogers had conversations with residents who had concerns DCs will be passed onto the consumer on the residential-side.
He pointed out that DCs are collected at the local level, as well.
Essex, for instance, just passed its updated DC By-Law in early October.
Tecumseh Mayor Gary McNamara said implementing a DC By-Law at the County-level is a long-time coming. He believes Essex County is the only County left in Ontario that does not have a by-law in place to help mitigate costs by collecting DCs. Growth should pay for those additional services.
Conversely, Lakeshore Deputy Mayor Kirk Walstedt, was in opposition to adding DCs at the County-level.
He said there are local DCs that are substantial. There is constant talk about affordable housing and making housing available. Many homes are already out of the price range, “and here we are adding another additional cost to it. The developers, we all know, are not going to eat it. It’ll be passed onto the homebuyer.”
Though DCs may bring in extra funds for the County, “I think we are pricing people even further out of being able to purchase homes by adding additional charges,” Walstedt said.
Belanger responded that once the calculations for each service are done, the report will be presented to County Council. There will also be policy recommendations in the report for consideration for statutory and non-statutory exemptions. County Council can conclude what services should have a DC, and whether or not the implementation of DCs should be phased-in.
County Council received the reports that Krzeczunowicz and Belanger submitted. On the report Belanger submitted, Walsted, Essex Deputy Mayor Rob Shepley, and Lakeshore Mayor Tracey Bailey were opposed.
In thanking the consultants, County Warden and Mayor of Leamington, Hilda MacDonald, said she looks forward to the next steps.