October 16, 2013

Development charges mid-range in Wellington

As published in The Erin Advocate

The Town should put a positive spin on its development charges (DCs), which are lower than in some neighbouring municipalities, according to Erin Finance Director Sharon Marshall.

“In my opinion, respectfully, I think it is important for Council to paint a more ‘positive’ face on the town,” said Marshall, in a letter to Erin councillors, with charts showing Erin’s DC’s compared to those in other Wellington municipalities, plus Halton Hills and Guelph.

“You will notice that the Town is not really ‘high’ compared to  Wellington – nor to our neighbours,” she said.

The letter came after comments by Mayor Lou Maieron and Councillor Jose Wintersinger, who are concerned that DCs are making it difficult to attract growth in the town.

“We have high development charges,” said Maireon, during a recent debate on whether to increase the fee to landowners who qualify to sever their land, known as Cash-in-lieu of Parkland (separate from DCs).
He also noted that Centre Wellington (Fergus-Elora) “is dropping their DCs by a thousand – they’re trying to encourage people to come into their community.”

“It’s a big concern because our DC charges are high,” said Wintersinger. “A lot of people can barely afford to set up buildings. Farmers in particular, if you want to take a severance, you also lose ten feet of your frontage – that’s a lot of land you have to give for nothing. Then you have to give your park fees, then you have give your DC fees. It’s got to stop, or else nobody’s going to be able to afford to live here. I’m sorry, but I can’t ignore that.”

A bylaw to increase the flat rate parkland fee from $5,000 to $7,500 was to be considered by council at this week’s meeting. The Planning Act allows the Town to charge up to 5% of the land value as the parkland fee, and the average price of lots has gone up.

In 2007-2008, the average lot sold for $150,738, while in 2013 the average was $184,000 – 5 % of which is $9,200. The mayor said a 50% increase in the fee would stifle the Town’s current main source of growth.

“I look at it as another tax grab,” he said.

Centre Wellington’s residential DCs remain the highest in the county, though direct comparisons are complicated by the fact that DCs have three components: the fee for a detached residence, the fee for water service and the fee for wastewater. These vary dramatically, and some municipalities such as Erin have no wastewater service.

“I feel that it is important that the correct information is available to the public,” said Marshall regarding her letter to council. “It seems that Erin is getting a reputation for high taxes and high fees – and it isn’t entirely justified.”

She referred to a recent issue in which Olympic Forest Products was facing development charges of $56,304 ($42,024 in Town DCs and the rest from the county) for a $110,000 building.

“If they built the same addition in Acton or Georgetown they would pay $166,953 to Halton Hills,” said Marshall in her letter. “Certainly the Town of Erin is NOT high compared to other GTA municipalities. Let’s promote that fact!”

Municipalities are not obliged to collect DCs, but if they do, the methodology for calculating, collecting and spending them is controlled by Ontario law. DCs are meant to pay for increased capital costs required because of increased needs for services arising from development.

There are no minimums or maximums, but the levy amount must be supported by a background study. The study and its calculations can be appealed to the Ontario Municipal Board, which sometimes happens with large-scale developments.