By Cecilia Nasmith
Development charges are levied by municipalities on new development to cover the streetlights, sidewalks and services of all kinds that will be needed.
While every member municipality of Northumberland has its own development-charges structure, the county itself is not at present levying development charges to cover the services it provides – most notably roads, among others like waste collection and paramedics.
At Wednesday's county council meeting, Andrew Grunda of Watson and Associates Economists Ltd. gave an update on the process of establishing one.
It's conventional wisdom that development charges be borne by new development, Grunda said, since local taxpayers already have sufficient local services to accommodate their demands. Monies collected in development charges from a new development go into a reserve that will ultimately defray associated new costs.
Armed with figures from the county's Official Plan, Grunda shared statistics that show that, between now and 2041, the population will grow by 19,000 and 10,000 additional dwelling units will be required. About 70% of residential development will take place in Cobourg and Port Hope, as will about 77% of the nonresidential development.
In that connection, he said, one of two approaches might be taken – a uniform rate across the county or an area-specific one. His own recommendation is a uniform rate, which will bring in more revenue.
Even so, he said, “this is a relatively small development charge in comparison to the charges imposed by lower-tier municipalities.”
Consideration will be given to a number of areas, he said, including at what point the county development charge is collected and how – for example, developers of rental housing units might qualify to pay in installments, and those contemplating non-profit housing could have an even longer time to pay in installments.
There is also discretion to reduce the charges on certain projects, Grunda said, but this comes with a caveat. The difference cannot be made up on other projects – it is simply lost revenue that may potentially have to be made up in taxes.
The recommendation is that municipalities negotiating development projects collect the county development charge at the same time they collect their own.
“It should be kept in mind that lower-tier municipalities have a lot less staff,” Alnwick-Haldimand Township Mayor Gail Latchford pointed out.
Since a municipality is already collecting its own development charges, Grunda did not think it would be an onerous task for existing staff levels. And Latchford was reassured to hear that – unlike taxes, the full amount of which are due to the county whether the are collected are not – lower-tier municipalities do not have to submit county development charges until they are collected.
Brighton Mayor Brian Ostrander asked if the end draft could give municipalities the authority to negotiate reductions in county development charges and other terms pertaining thereto on their own. Grunda said a municipality only has authority to negotiate for its own development charges – though they are free to work with the county if they feel any adjustments are warranted.
Ostrander was unconvinced. Delegating that authority to lower-tier municipalities can only streamline the process, he said.
Cramahe Township Mayor Mandy Martin had another angle. If a lower-tier municipality has the authority to collect the county development charge, why should it not also have the authority to defer paying it to the county.
“I can then invest it in a high-interest-paying account, and I can make some money for doing your work,” Martin said.
“There are other ways we can look at this.”
Looking ahead, Grunda anticipates three key events – stakeholder consultations in Cobourg and Colborne with developers, a public meeting in March and a bylaw that has been formulated with that input in mind to come before council in April.
The motion passed by council authorized the meetings, as well as the posting of the Development Charge Background Study and the proposed Development Charge Bylaw (based on a uniform rate) on the county website for public review.
