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Union of B.C. Municipalities Clinic on Understanding Development Cost Charges September 24, 2003...
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Transcript of Union of B.C. Municipalities Clinic on Understanding Development Cost Charges September 24, 2003...
Union of B.C. Municipalities
Clinic on
Understanding Development Cost Charges
September 24, 2003
1060658
Agenda
• Marvin Hunt, Chair – Councillor, City of Surrey
• The fundamentals of DCCs
– Murray Dinwoodie, P.Eng., City of Surrey
• What to think about when considering DCCs
– Chuck Gale, P.Eng., City of Richmond
• Developer’s perspective on DCCs
– Steve Kurrein, CHBABC
The Fundamentals of DCCs
Murray Dinwoodie, P.Eng.City of Surrey
What are DCCs ?
• AuthoritySections 932 to 937 of Local Government Act
• Funds provide infrastructure and parks in support of new development
• DCC amounts vary directly with the type and size of the development
Why DCCs ?
• It’s a way of equitably sharing between developments, the cost of major infrastructure and park land in support of new development … (a sort of development co-op)
• Before DCCs big developments paid for infrastructure and small developments got a free ride
Use of DCCs
• For major services:(Roads, Sewer, Water, Drainage)
• For Parkland Acquisition and Park Improvements
• A separate DCC rate is charged for each service
DCC No-Nos
• Can not be collected for local services:(Streets, Watermains, Sewers, Storm drains)
• Can not be used to pay for upgrades or replacement of services related to existing development
How are DCCs calculated?
$$$ Cost of Servicing
No. of Units=DCC rate
Why DCCs Vary
• DCCs are based on the impact a development has on services
• Different types of Development have different impacts … different DCCs
• Rates are based on the demand each type of development places on the specific DCC service
• DCCs may vary by geographic area
Why DCC Rates Vary
• Different types of development create different impacts … Example:– Single family homes have 3.2 occupants.– Townhouses have 2.4 occupants– Apartments have 1.6 occupants
• Single family homes create higher service demand because they typically house more people
DCC Simplified Example:
• Projected Development:– 30 Single Family lots– 40 Townhouse units– 60 Apartment units
• Local Sewers– Paid by developers
• Cost of Trunk Sewer– Paid by DCCs =
$90,000
Trunk
Local
Apartments
Single Family Townhouses
Example DCC Calculation:• Development Potential:
– 30 Single Family units– 40 Townhouses– 60 Apartments
• Equivalent development impact:– 30 S. F. units– 40 Townhouses x 0.75 = 30 S.F. units– 60 Apartments x 0.50 = 30 S.F. units
• Total Equivalent Impact = 90 S.F. units
Example DCC Calculation:
• Cost of Trunk Sewer = $90,000
• DCC per S.F. unit = $90,000/90 units = $1000 per S.F. unit
• DCC rates:– S.F. dwelling unit = $1000 per unit– Townhouse unit = $1000 x 0.75 = $750 per unit– Apartment unit = $1000 x 0.50 = $500 per unit
Example DCC Calculation:
• DCCs Collected:– Single Family = 30 x $1000 = $30,000– Townhouses = 40 x $750 = $30,000– Apartments = 60 x $500 = $30,000
• Total DCCs collected at build out = $90,000
Implementation … Staff• Prepare land use plans• Estimate development• Prepare servicing plans• Estimate cost of servicing plans• Establish impacts of development on services• Calculate DCC rates• Report to Council … Public input• Approval process
Implementation … Council
• Consider staff report
• Authorize public process
• Gives three readings to DCC By-law
• Authorizes by-laws to be forwarded to
Ministry for approval
Implementation … Ministry
• Ministry reviews by-law
• Inspector of Municipalities approves
bylaw
• Council adopts by-laws (4th reading)
• DCCS become payable
Grace Period
• Time after by-law adoption for “in-stream” developments to complete without DCC payments
• 12 months required by legislation for subdivisions
• No requirement for building permits
Dedicated Funding (Trust Account)
• A source of revenue for the annual capital budget
• Funds must be used for constructing projects identified in DCC by-law
• Funds must be used for the purposes they were collected
Best Practices Guide
• Extensive information for Local Governments
• Addresses policy and implementation
• Available on the MCAWS web site:
www.gov.bc.ca/mcaws/lgd/advice_index.htm
What to think about when Considering DCCs
Chuck Gale, P.Eng., City of Richmond
The Tool Box
• DCCs one of many funding options– Latecomers agreements (939)– Front-ender Agreements (933)– Development Works Agreements
(937.1)– DCC credits (933.8(a)) – Borrowing– Capital Plan
• When to use DCCs
DCCs Imposed by Bylaw
• Bylaw approval process should:– encourage open public consultation– Involve Landowners– Involve “Development Community”
and other stakeholders
• Bylaw should be reviewed regularly– Set out review schedule & process
• Ensure DCC charges remain current
Considerations
• Maintain a current OCP
• Maintain a current 10 year capital
plan
• Establishing a time frame for growth
• Allocate costs to existing and new
development
Considerations
• Allocate costs to different development
types
• Determine the municipal “assist”
• Adjust DCC rates annually
• Impact on development
– Deterrence & Influence on growth location
How DCCs Work an example
$100 = $85 + $10 + $5
TotalDCC
DeveloperShare
CityAssist= + City Share
Exist. Dev +
If Developer Share Lowered
$100 = $85 +$10 + $5
25% $100 = $64 + $10 + $26
50% $100 = $43 + $10 + $47
Reduction%
TotalDCC
DeveloperShare
CityAssist= +
City Share Exist. Dev +
Closing Comments
• DCCs are an important revenue source to consider in support of new development
• DCCs are NOT taxes … (co-op model)
• DCCs are one of a # of funding tools(refer to Development Finance Choices Guide)
Development Industry Perspective
Steve KurreinCanadian Home Builders Association
BC