Failure to land grant for PMD arena upgrades complicates development charge picture

Mapleton council told residential rates will need to go higher

MAPLETON – If the PMD Arena and Community Centre is to be expanded, residential development charges will have to grow.

The rejection of an application for federal funding for the proposed arena project is the reason for an increase to draft development charges presented to council in a background study last month, Hemson Consulting associate partner Stefan Krzeczunowicz told Mapleton council on March 19.

Council learned in February the township’s latest application for Infrastructure Canada funding to upgrade the PMD Arena and Community Centre was rejected.

The proposed project, which includes a multi-court gymnasium with an elevated walking track and new entrance areas, has now been rejected twice for funding through the federal Green and Inclusive Community Buildings Fund, in both cases for not being “shovel ready.”

“We presented draft development charge rates to you last month that assumed that you would receive that grant, which was in the amount of about $12 million dollars,” said Krzeczunowicz.

He said the consultants factored just over $13 million worth of recreation capital costs into the draft development charges.

“The vast majority of that was related to the Drayton community hall work. We’d identified this grant … just under $12 million, which was going to fund about 93% of this cost,” he explained.

Of the remaining 7%,  Krzeczunowicz said roughly three quarters (about $800,000) was considered to benefit existing residents and required to be excluded from the development charge calculation.

That left $300,000 which could be funded from current development charge reserve funds and $230,000 to be funded through a new development charge for recreation.

Those numbers put the prosed development charge for a single detached unit at around $24,500, for a single detached unit, with lower charges for smaller housing units.

“About 90% of the total charge was for your engineered services of water, wastewater and roads, and just under 2%, was related to parks and recreation,” said Krzeczunowicz, adding no non-residential charges were included for recreation.

“With the grant removed … (the) share of the cost benefiting existing residents rises to about $10 million dollars,” Krzeczunowicz stated.

“So that must be paid for by non-development charge sources, which almost certainly means your property taxes.”

The new calculations include a larger share of residential development charges for the portion of the project deemed to benefit future residents.

That means the proposed charge for a single detached unit will rise from about $24,500 to roughly $29,500, said Krzeczunowicz.

“This is all premised on the idea that the project remains the same scope and the same costs,” he added.

“The financial impacts both to the development charge rates and to the tax-funded portion of the project would, of course, change if the project’s costs changed.”

The consultant outlined council’s choices as a result of the loss of potential grant funding:

  • proceed with the project as currently conceived and implement the suggested development charges;
  • proceed with the project as currently conceived but implement a lower charge and have taxpayers pick up the shortfall; or
  • change the scope and cost of the project and adjust the development charge accordingly.

Mayor Gregg Davidson stated council has not entirely given up on receiving funding for the arena project.

“The discussions with the federal government are not over,” he said.

“We’re going to continue with that and work to see that they will actually accept the shovel-ready (definition) that we have been proposing to them.”

Council has requested a meeting with federal infrastructure minister Sean Fraser to discuss its proposal for an alternative definition.

“So is this premature to make this decision until we hear back?” wondered councillor Marlene Ottens.

“Because if we make this change and then we get the grant after all, do we undo this? Do we have to revisit it again?”

Davidson responded, “I don’t expect that we’re going to get the grant this year. So we would have to reapply.

“At this point in time, don’t expect to get any federal or provincial funding for this project until we have to reapply.”

CAO Manny Baron noted township staff is currently planning a feasibility study on arena/community centre improvements that could involve the current proposals, plus other ideas such as adding a second ice pad.

Baron suggested council could consider waiting until later to decide on the development charges.

Krzeczunowicz pointed out there is “some flexibility” on the timing of the development charge updates.

However, he noted, “part of the reason for proceeding now with a bylaw update was that you just completed some master servicing plans and they identified, typically on the water and sewer side of things, significant growth-related capital and you needed to update your bylaws to reflect that.”

The consultant added that if council plans to carry on with the arena project, it simply needs to include the additional charge for recreation development, “recognizing that the scope of it and the funding of it may need to be ironed out at a later date.

“There is always an opportunity to amend the bylaw, including the rates, to reflect any future grant funding that you receive.”

Baron suggested it might be advisable to wait until the feasibility study is complete.

“I’m sure the feasibility study is going to address, ‘Do we do we need a second pad? Do we add a gymnasium…’ he noted.

Public works director Jamie Morgan confirmed the feasibility study “would be looking at twinning the ice that we have.”

Morgan noted community needs have changed since the last recreation master servicing plan was completed in 2021.

“I’ve reviewed it and I find a few gaps in it,” he said noting various user groups are looking for space for activities such as pickleball.

“Things have changed. We probably should add some stuff and update that plan – maybe just an amendment to it?” said Morgan.

“I think, hearing all these different options and hearing about the feasibility study, that I would feel more comfortable waiting until we’ve got that in our hands, as long as it wouldn’t impact the changes that we need to ensure happen for development charges,” said councillor Amanda Reid.

Krzeczunowicz pointed out legislation regarding development charges only requires that “whatever’s in the background study be a reflection of council’s intentions.

“So I don’t believe you need a specific project, with a specific scope and specific cost and feasibility studies to back it up … We can put a provision for community facility expansion into the background study and leave the details to later. I think that would be sufficient to justify the charge,” he explained.

Davidson encouraged council to move ahead with the suggested development charge increase.

“We know we’ve got these projects that need to be done. We don’t want it to all be paid for by the taxpayers that are currently here,” the mayor said.

“We want to make sure that new homeowners are also going to pay somewhat … So I’m of the opinion of let’s get on with it, let’s move this needle up to the full amount, the extra $5,000 …

“I think that’s reasonable in order to help pay for the facilities that would benefit the entire community, including the new people moving in.”

Reid added, “If we pass these development charges … We’re not saying to taxpayers at this point that it’s all going to come through the taxpayers’ pocket.

“The rest of the funding, we’re still working on it, but we’re allowing this new development growth to help pay for those projects.”

“Correct … Even though this project would be $10 million short, that $10 million is still something that we could go to government … fundraise … we have different communities that will fundraise to pick up that extra,” agreed Davidson.

Council passed a resolution to receive the delegation on the background study on alternative development charges recreation rates as information.

The motion also expressed council’s intent “to maintain parks and recreation service levels in light of anticipated future development, in part through the expansion and upgrade of recreation facilities.”

Development charges

The development charges background study is also proposing new rates for non-residential construction.

As currently proposed, total development charges for non-residential construction would rise by 16%, from $61 to $71 per square metre.

The completed development charges background study is expected to be released to the public by May 6, with a statutory public meeting planned for June 11.

Council is aiming to pass an updated development charges bylaw by July 9.

Passage of the bylaw will be followed by a 40-day appeal period.