It was a bit like comparing apples to oranges as councillors here listened to a presentation on proposed town development charges.
Of note is that the proposed charges do not take into account possible outcomes of the town’s current Servicing and Settlement Master Plan, which could include construction of a sewage treatment plant.
Currently the town is serviced by individual or multi-unit septic systems and only a portion of the urban areas are served by municipal water.
The proposal presented to Erin council on July 8 included a 105-page document outlining possible development charges (DCs), which help municipalities recover capital costs associated with residential and non-residential growth within a municipality. These costs are in addition to normal costs associated with creation of a subdivision agreement.
Dan Wilson of Watson and Associates explained the study process includes growth forecasts, detailed discussions with staff regarding future needs, and policy reviews.
For single detached properties without services, the proposed charges would jump from $8,234 to $10,126 while serviced lots would drop slightly from $13,326 to $13,242.
That drop is due to a decrease in the needed funds for water services, which is dropping from $5,092 to $3,116.
It’s a similar story for non-residential development, as an unserviced lot charge would rise from $3.26 to $4.01 per square foot.
Meanwhile, lots with municipal water services would only increase from $5.19/sq.ft. to $5.31/sq.ft.
Wilson explained Erin’s current population is around 11,722. That population is expected to rise to 12,291 by 2024 and to 14,078 by 2029 – with over half of the projected growth targeted for the urban areas of Erin.
Wilson, who said during the first 10 years more of the growth would be directed to the rural areas, noted roughly $7.3 million should be recovered through development charges, which is roughly 40% of the capital costs of anticipated projects.
Of that, $2.9 million is for roads and transportation services, $2.2 million for water, $1.1 million for fire, $809,000 for parks and recreation and $307,000 for administration.
“Overall, the municipal-wide services costs are going up while the water-related services are going down,” Wilson said.
However, he said he believes the proposed charges for serviced land are comparable to the current charges.
Councillor Barb Tocher asked that the definitions of the information presented be switched from “urban and rural” areas to “serviced and non-serviced.” She explained not all of the urban areas of Erin are serviced.
“Part of the urban areas are still on private services,” Tocher said.
The report recommended town-wide development charges – excluding water, which would be charged separately.
Wilson said he believes the proposed charges are comparable to those in neighboring areas for applicable development. In the area of urban charges, Erin lies midway compared to development charges across Wellington County and its charges are lower than those in Guelph, Orangeville and Caledon.
The same holds true for Erin’s non-residential charges, compared to Wellington County and outlying areas.
Resident Allan Alls said, “The development charges in this town are very cheap and there are developers quite keen to come to Erin.”
Alls added, “I assume these figures will change if we add wastewater (into this).”
Wilson agreed, but stated “We are in this unfortunate situation where the development charges bylaw must be in place by August or the town will not be able to impose DCs.”
He agreed, “It’s unfortunate that we cannot include those (SSMP) recommendations into the DC study.”
Wilson stated that if there is significant servicing recommendations as a result of the SSMP, council can always amend the development charges study to reflect the recommendations of the SSMP.
“You don’t have to wait for five years for another DC study,” said Wilson.
Mayor Lou Maieron was concerned the charges did not include charges for stormwater drainage or dams, asking, “Is that a choice?”
Wilson explained storm-related costs are generally incurred by developers to satisfy development agreements.
Maieron then used the example of improperly functioning stormwater ponds or dams and wanted to know whether DCs could be used towards those types of projects.
Wilson explained council must be careful in the use of development charges, stating, “The rehabilitation of existing structures is typically not growth related.”
He added it might be different if a municipal asset needed to be enhanced or enlarged, but even then development charges would only cover the cost related to potential growth, not to replace what was already there.
Maieron stated costs are going up in rural areas where most growth will be happening over the next few years – until the SSMP is settled, but costs are dropping in urban/serviced areas.
He questioned why the charges for water were dropping. “It seems to be putting the costs onto rural development.”
Wilson said water costs were dropped not to account for increases on municipal-wide services, but rather because two major water supply costs would be paid for by developers.
Maieron still believed any charges should be split equally. “Right now, it seems we are shifting the costs to rural growth – is that fair?”
Wilson said the main factor affecting the charges is the slower amount of predicted growth.
Finance director Sharon Marshall said “the point is we don’t need two new wells unless we have growth. So of course the developers would have to contribute to the growth portion of the new well.”
Marshall said the town would not pay for something it didn’t need.
Maieron then asked if the developer paid the cost of a new well, wouldn’t they then get a credit.
“As long as the development charges don’t cover those aspects – he does,” said councillor John Brennan.
Wilson said the only case where a developer would get a credit is if he paid entirely for something which would be paid for through development charges.
Maieron said, “We don’t know what will happen seven years from now, but we are still changing the development charges today.”
Marshall also felt the mayor was misstating the burden shift to the rural areas.
“Everyone pays whether you live in Erin (village) or out on the 17th Sideroad,” she said. “Everyone will be paying $10,000 in development charges. There is no difference in the burden to the urban or rural.”
Marshall said there is an additional cost to urban areas for the water charge.
Maieron also voiced concern over the proposed industrial development charges.
Brennan suspected the question would come up and in preparation did a review, noting that Erin does not have wastewater charges.
“When you compare that to municipalities which do offer those services – you get an apples to oranges comparison.
“But when you think about it, who do we compare ourselves to? Certainly not Wellington North, Minto or Mapleton.”
However compared to Halton Hills, those rates are 61% higher, Guelph is 29% higher and Caledon is 83% higher, Brennan said.
“People who are coming here are largely coming from the GTA, they are not coming from Mapleton or Minto. If you look at our proximity to the GTA, you are much better off comparing us to Caledon or Halton Hills.”
On the residential side, Brennan also believed Erin fares quite well.
“All in all, we compare quite well to the areas we intend to compare ourselves to.”
Tocher added the assessment base is similar as well.
Maieron maintained his concern would still be that when someone with an industrial focus comes to Wellington County and talks to the economic development office, they are going to be interested in tax rates and development charges.
“It will appear we are high compared to places in Wellington County.”
He said Puslinch has an advantage being located along Highway 401 while other communities are along Highway 6.
“How can we attract enough commercial and industrial growth to lessen the burden on our residential taxpayers?” Maieron asked.
Tocher said, “the best way to be competitive in regard to industrial and commercial development growth is to have water and wastewater.”
Marshall maintained the costs are well below Centre Wellington and lower than the proposed Guelph-Eramosa rates.
“Even within Wellington County, there are three municipalities with charges higher than us and three lower,” said Marshall.
The bylaw is expected to be back before on council on July 22.
