Mapleton defers DCs, hopes to incentivize development

MAPLETON – Businesses looking to build industrial and commercial developments in Mapleton can now apply to have development charges (DC) deferred for up to five years.

Deferrals will be granted on a case-by-case basis at council’s discretion. 

Chief financial officer Patrick Kelly said for the last few months, he and CAO Manny Baron have been considering how to encourage industrial and commercial development “while not jeopardizing the long-term financial planning for the municipality.” 

He said many businesses are looking for incentives to offset initial costs of development, and deferring DCs is a common practice in other municipalities.  

Kelly brought a report to council with a draft policy outlining the DC deferrals, and council approved the policy on April 28. 

The DCs would still be collected, Kelly noted, and will have a “small interest rate put on them.” 

“The fact that we are not collecting them right away (means) we are kind of carrying that cost,” he said. 

But the deferrals would not impact tax rates, he said, as deferred DC payments would be covered by reserve funds.

If there isn’t sufficient funds in reserves, then the township will take on additional debt to cover the deferred payments, and that debt obligation would be funded by future DC funds, Kelly said – “It cannot touch the tax levy.”  

Kelly said the draft policy was informed by what is and is not working in other municipalities, and includes details meant to support council in making clear decisions about deferring DCs. 

Whether or not to defer, and for how long, will be up to council on a case-by-case basis.

“Staff can’t go and structure a deal and say ‘yep, we will defer those DCs for you’ – that’s council’s decision,” Kelly said. 

For each request, township staff will provide council information about how the deferral would impact the township. Initially, the draft policy included deferrals of up to 10 years, but council opted to bring the maximum down to five years instead.

Baron said he was initially intending to cap the deferrals at five years, but a business has already requested a 10-year deferral, which is one reason 10 years was the maximum outlined in the draft policy. 

Councillor Amanda Reid wanted to keep the maximum at 10 years: “It gives us that flexibility that we don’t have to go in and rewrite this policy if we have a large company come that wants a larger deferral.”

Councillor Michael Martin said, “I think if we have a 10-year max, everyone is going to ask for 10, and I worry it will be really difficult” to determine which to approve, he said. 

“The other thing about 10 years is it’s 2.5 terms of council, so you are making decisions that are impacting future councils’ and staff’s ability to collect revenue. Five years is obviously still past anyone’s term of council, but it’s not 2.5 terms.” 

Councillors Martin, Lori Woodham, Marlene Ottens and Mayor Gregg Davison voted to change the policy to cap deferrals at five years instead of 10, while Reid voted against the change.

Council voted to approve the policy, with all but Reid voting in favour. 

Kelly called the policy “a good tool to have in our economic tool box, and when opportunities come forth, we can say ‘come to Mapleton – we have these incentives.’ 

“I think it’s a positive step forward for the community,” he said. 

Martin agreed, and said the policy would promote Mapleton’s “reputation of being business-friendly and welcoming.”