The Town of Gananoque is considering introducing development charges in the near future.
Development charges (DCs) are an additional fee charged to developers, usually on a flat rate per lot system, at the time that a building permit is issued.
Before considering development charges, the town had to conduct a full development charge study comparing DCs in neighbouring municipalities, the impact on development within Gananoque, and the amount that could be charged based on population growth, as well as the town’s asset management needs, saod Mayor Ted Lojko.
"Development charges are a discretionary mechanism to recover capital costs," said Peter Simcisko fo consulting firm Watson and Associates, addressing council on Nov. 20.
In order to consider implementing development charges, a study is required by the Ministry of Municipal Affairs and Housing, explained Lojko.
"Development charges are an increasingly common tax issued by municipalities. They propose a trade-off between affordability and municipal revenue," said Evan Veenstra, of Riverton Homes in Gananoque.
Development charges vary depending on municipal asset management plans and growth projections.
According to Lojko, municipalities are being encouraged by the province to look at how best to attract development but also how best to ensure that the residents of the municipality do not continually pay for various infrastructure required when condos and subdivisions are being planned.
Yet developers say development charges are simply passed on to the consumer or taxpayer.
"As home values increase, home assessments for taxation purposes also increase. Through implementing development charges, a municipality can collect new revenue, along with additional revenue through increased residential taxation," said Veenstra.
At this time, developers in Gananoque are already required to install all infrastructure that will serve their developments.
"A developer is responsible for the installation of infrastructure such as water and sewer, roads, sidewalks, streetlights etc., which is undertaken through the subdivision approval process. A municipality will assume the infrastructure upon inspections and the completion of the subdivision. This is outlined in a subdivision agreement," said Brenda Guy, the town's manager of planning and development.
According to Guy, DCs are intended to address growth-related costs such as the need to purchase a new snowplow or an expansion to the water and wastewater system.
"Development charges are applied over and above the engineering, plumbing and building permits required, but municipalities already gain new taxes from the new residents in subdivisions, and they gain new water and wastewater ratepayers who were not on the books before," said Joe Gallipeau, a developer out of Smiths Falls.
Most municipalities in the immediate area already impose DCs on new developments, including North Grenville, Kingston, Brockville, Rideau Lakes and Prescott.
Meanwhile, councils can retain the option of waiving DCs to provide an incentive to encourage certain types of development.
"Development charges could be seen by some individuals as a deterrent but council has the option of waiving development charges for certain sectors to provide an incentive to encourage some types of development, for example: Industrial development. Several municipalities have also waived development charges to encourage affordable housing and/or seniors' housing," said Lojko.
The province has also introduced community benefit charges on new developments, which are separate from DCs.
Community benefit charges can provide funding for community projects and assets such as parks and parking lots that are needed to service the increase in population. However, according to Lojko, community benefits charges are not part of the current study in Gananoque.
There are still numerous steps that have to be completed before DCs can come into effect – a process that can take up to a year, according to Lojko.
"Once consultation with the community, with the community members of the planning advisory committee, as well as various stakeholders are completed, Gananoque town council will then determine if and when they wish to implement the development charge bylaw," said Lojko.
Council will likely make a decision in 2021 on whether to adopt a development charges bylaw. At this time, Council has requested that staff move to the public process, which will start soon, explained Guy.
"Put to good use, this increased revenue (from DCs) can lead to incredible improvements throughout the community. We are very confident in the new home market in Gananoque, and are entirely committed to our community. If development charges are implemented in Gananoque, we will view them as an opportunity to continue supporting a community that has been incredibly supportive of us," said Veenstra.
Heddy Sorour, Local Journalism Initiative Reporter, Brockville Recorder and Times