Area-Specific Development Charges Background Study for the Wellington Urban Serviced Area - Prince Edward County For Public Circulation and Comment
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Area-Specific Development Charges
Background Study for the Wellington
Urban Serviced Area
Prince Edward County
________________________
For Public Circulation and Comment
Watson & Associates Economists Ltd.
905-272-3600
December 28, 2020 info@watsonecon.ca
Table of Contents
Page
1. Introduction...................................................................................................... 1-1
1.1 Background............................................................................................. 1-1
1.2 Purpose of this Document....................................................................... 1-5
1.3 Summary of the Process......................................................................... 1-5
2. Anticipated Development ............................................................................... 2-1
2.1 Requirements of the Act ......................................................................... 2-1
2.2 Anticipated Development in the Wellington Urban Serviced Area .......... 2-1
2.2.1 Basis of Population, Household, and Non-Residential
Gross Floor Area Forecast ......................................................... 2-1
3. Approach to the Calculation of the Charge ................................................... 3-1
3.1 Introduction ............................................................................................. 3-1
3.2 Services Potentially Involved .................................................................. 3-1
3.3 Increase in Need for Service................................................................... 3-3
3.4 Local Service Policy ................................................................................ 3-3
3.5 Capital Forecast ...................................................................................... 3-3
3.6 Treatment of Credits ............................................................................... 3-4
3.7 Classes of Services ................................................................................ 3-5
3.8 Existing Reserve Funds .......................................................................... 3-5
3.9 Deductions .............................................................................................. 3-6
3.9.1 Reduction Required by Level of Service Ceiling ........................ 3-6
3.9.2 Reduction for Uncommitted Excess Capacity ............................ 3-7
3.9.3 Reduction for Benefit to Existing Development .......................... 3-7
3.9.4 Reduction for Anticipated Grants, Subsidies and Other
Contributions .............................................................................. 3-8
3.10 Municipal-wide vs. Area Rating ............................................................... 3-8
3.11 Allocation of Development ...................................................................... 3-8
4. Development Charge Eligible Cost Analysis by Service ............................. 4-1
4.1 Introduction ............................................................................................. 4-1
Watson & Associates Economists Ltd.
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
Table of Contents (Cont’d)
Page
4.2 Water Services ....................................................................................... 4-1
4.2.1 Water Treatment ........................................................................ 4-1
4.2.2 Water Storage and Distribution .................................................. 4-2
4.2.3 Water Services Summary .......................................................... 4-2
4.3 Wastewater Services .............................................................................. 4-3
4.3.1 Wastewater Treatment ............................................................... 4-3
4.3.2 Wastewater Collection and Conveyance ................................... 4-3
4.3.3 Wastewater Service Summary ................................................... 4-4
5. D.C. Calculation ............................................................................................... 5-1
6. D.C. Policy Recommendations and D.C. Policy Rules ................................. 6-1
6.1 Introduction ............................................................................................. 6-1
6.2 D.C. By-law Structure ............................................................................. 6-2
6.3 D.C. By-law Rules ................................................................................... 6-2
6.3.1 Payment in any Particular Case ................................................. 6-2
6.3.2 Determination of the Amount of the Charge ............................... 6-3
6.3.3 Application to Redevelopment of Land (Demolition and
Conversion)................................................................................ 6-3
6.3.4 Exemptions (full or partial) ......................................................... 6-3
6.3.5 Phasing in .................................................................................. 6-4
6.3.6 Timing of Collection ................................................................... 6-4
6.3.7 Indexing ..................................................................................... 6-6
6.3.8 D.C. Spatial Applicability ............................................................ 6-6
6.4 Other D.C. By-law Provisions ................................................................. 6-7
6.4.1 Categories of Services/Classes for Reserve Fund and
Credit Purposes ......................................................................... 6-7
6.4.2 By-law In-force Date .................................................................. 6-7
6.4.3 Minimum Interest Rate Paid on Refunds and Charged for
Inter-Reserve Fund Borrowing ................................................... 6-7
6.4.4 Other Recommendations ........................................................... 6-7
7. Asset Management Plan and Long-Term Capital and Operating Cost
Examination ..................................................................................................... 7-1
7.1 Asset Management Plan ......................................................................... 7-1
7.2 Long-Term Capital and Operating Cost Examination ............................. 7-4
8. By-Law Implementation .................................................................................. 8-1
8.1 Public Consultation Process ................................................................... 8-1
8.1.1 Introduction ................................................................................ 8-1
8.1.2 Public Meeting of Council........................................................... 8-1
8.1.3 Other Consultation Activity ......................................................... 8-1
8.2 Anticipated Impact of the Charge on Development ................................. 8-2
Watson & Associates Economists Ltd.
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxTable of Contents (Cont’d)
Page
8.3 Implementation Requirements ................................................................ 8-3
8.3.1 Introduction ................................................................................ 8-3
8.3.2 Notice of Passage ...................................................................... 8-3
8.3.3 By-law Pamphlet ........................................................................ 8-3
8.3.4 Appeals ...................................................................................... 8-4
8.3.5 Complaints ................................................................................. 8-4
8.3.6 Credits ....................................................................................... 8-5
8.3.7 Front-Ending Agreements .......................................................... 8-5
8.3.8 Severance and Subdivision Agreement Conditions ................... 8-5
Appendix A D.C. Cash-Flow Calculations ............................................................. A-1
Appendix B Proposed Development Charges By-law .......................................... B-1
Watson & Associates Economists Ltd.
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxArea-Specific Development Charges Background Study
Chapter 1 Introduction Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
1. Introduction
1.1 Background
Prince Edward County (County) currently imposes development charges (D.C.s) within
the County under By-law 4172-2018 to recover the capital costs of new development for
the following services:
• Transportation;
• Fire Protection;
• Marinas and Boat Launches;
• Parks and Recreation;
• Library;
• Administration (Studies);
• Homes for the Aged;
• Waste Diversion; and
• Municipal Parking
The growth-related costs of water and wastewater infrastructure to service development
of the urban serviced areas are recovered through Municipal Act Capital Charges
imposed under By-law 4019-2017. The growth-related capital costs that were included
in the calculation of the water and wastewater capital charges for the development of
the urban serviced areas are presented in Tables 1-1 and 1-2 for water and wastewater
services, respectively. The costs are presented in 2013$ values.
Subsequent to the passage of By-law 4019-2017, servicing constraints have been
identified preventing the timely development of the Wellington Urban Serviced Area, as
defined in Figure 1-1. As such, the County has completed a draft Master Servicing Plan
(MSP) for water, wastewater, and stormwater infrastructure to evaluate preferred
infrastructure solutions to provide servicing capacity for the full buildout of the
Wellington Urban Serviced Area.
Watson & Associates Economists Ltd. PAGE 1-1
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxFigure 1-1
Wellington Urban Serviced Area
Watson & Associates Economists Ltd. PAGE 1-2
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxTable 1-1
Infrastructure Costs Included in the Capital Charge Calculation
Water Services
2013$
Less:
Increased Service Needs Attributable to Anticipated Development Gross Capital Post Period Benefit to Total Growth
Prj.No Net Capital Cost
Cost Estimate Benefit Existing Related Costs
Development
Build Out - Water
Picton
2 Water Tower/Booster Stn. (New Development - E of John St., N of
1 1,154,762 - 1,154,762 - 1,154,762
Cty. Rd. 8)
2 Watermain Extension 10" (end of Washburn St. to New Bypass Rd.) 214,324 - 214,324 - 214,324
Watermain Replacement and Oversizing 6" to 10" (King St. to End of
3 160,743 - 160,743 128,594 32,149
Bowery St.)
4 Watermain Extension 10" (end of Bowery St. to New Bypass Rd.) 375,182 - 375,182 - 375,182
Watermain Replacement and Oversizing 6" to 10" (Cty Rd. 22 - Booster
5 321,486 - 321,486 257,189 64,297
Stn. to Kingsley Rd.)
Watermain Replacement and Oversizing 6" to 10" (McFarland Dr. -
6 267,905 - 267,905 214,324 53,581
Main St. to McDonald Dr.)
7 Watermain Extension 10" (end of McFarland Dr. to New Bypass Rd.) 88,409 - 88,409 - 88,409
8 Water Intake Improvements 6,000,000 - 6,000,000 5,452,381 547,619
Watermain Replacement and Oversizing 6" to 10" (Pitt St. - Booster Stn
9 267,905 - 267,905 214,324 53,581
to Union)
Hallowell Secondary Plan Area EA Works (Ph1 - Interconnection to
10 4,112,500 4,112,500 811,551 3,300,949
Bloomfield Line)
11 INI-0067 Picton East Servicing (90% growth related) 450,000 450,000 45,000 405,000
Access road & Servicing to Wellings of Picton - $160,000 water,
12 160,000 160,000 - 160,000
$160,000 wastewater
Rossmore
1 Rossmore/Peats Point Water Storage 1,732,144 - 1,732,144 1,595,016 137,128
2 Increase Belleville Supply (1,360 m3/d max day capacity) 5,403,395 5,403,395 - - -
Wellington
1 Water Reservoir (location to be determined) 3,589,288 - 3,589,288 - 3,589,288
Watermain Extension 10" (Prince Edward Dr. - Main St. to New
2 214,324 - 214,324 - 214,324
Development)
3 Watermain Extension 10" (WTP to Area 1) 937,869 - 937,869 - 937,869
4 Watermain Extension 10" (WTP to Prince Edward Dr.) 133,981 - 133,981 - 133,981
5 WTP Expansion/Upgrades 5,641,709 - 5,641,709 - 5,641,709
Total 31,225,926 5,403,395 25,822,531 8,718,379 17,104,152
Watson & Associates Economists Ltd. PAGE 1-3
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxTable 1-2
Infrastructure Costs Included in the Capital Charge Calculation
Wastewater Services
2013$
Less:
Increased Service Needs Attributable to Anticipated Development Gross Capital Post Period Benefit to Total Growth
Prj.No Net Capital Cost
Cost Estimate Benefit Existing Related Costs
Development
Build Out - Wastewater
Picton
1 Pumping Station Upgrades (W of Bridge St., S of Laird Lane) 519,643 - 519,643 - 519,643
Sewermain Replacement and Oversizing 8" to 10" (Walton St. to End of
2 267,905 - 267,905 214,324 53,581
Washburn St.)
3 Sewermain Extension 10" (End of Washburn St. to New Bypass Rd.) 214,324 - 214,324 - 214,324
Sewermain Replacement and Oversizing 8" to 10" (King St. to End of
4 160,743 - 160,743 128,594 32,149
Bowery St.)
5 Sewermain Extension 10" (End of Bowery St. to New Bypass Rd.) 375,182 - 375,182 - 375,182
6 Pumping Station (New Development - Paul St. and New Bypass Rd.) 692,857 - 692,857 - 692,857
Hallowell Secondary Plan Area EA Works (Ph1 - trunkmains,
7 9,634,550 - 9,634,550 1,901,260 7,733,290
forcemains, PS)
8 Wastewater Treatment Plant 30,000,000 - 30,000,000 13,189,000 5,511,000
9 INI-0067 Picton East Servicing (90% growth related) 2,356,300 2,356,300 235,630 2,120,670
Access road & Servicing to Wellings of Picton - $160,000 water,
10 160,000 160,000 - 160,000
$160,000 wastewater
Wellington
Sewermain Extension 10" (Prince Edward Dr. - Wellington Main St. to
1 267,905 - 267,905 - 267,905
New Development)
2 WPCP Expansion/Upgrades 7,540,387 - 7,540,387 - 7,540,387
3 SPS at Millennium Trial 200,000 - 200,000 - 200,000
4 SPS at North of Cleminson St. 200,000 - 200,000 - 200,000
5 Sewer Forcemain from Millennium Trial SPS to WTP 763,934 - 763,934 - 763,934
- - - -
- - - -
Total 53,353,731 - 53,353,731 15,668,808 26,384,923
The scope of the Wellington MSP for water and wastewater services include:
• Water supply
• Water storage, and distribution
• Wastewater treatment; and
• Wastewater conveyance
It is the County’s desired approach to recover the growth-related costs of service
through the imposition of an Area-Specific D.C. (A.S.D.C.) by-law in the Wellington
Urban Serviced Area. If adopted by Council, this A.S.D.C. by-law would replace the
imposition of the Municipal Act water and wastewater capital charges in this area.
Watson & Associates Economists Ltd. PAGE 1-4
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx1.2 Purpose of this Document This background study has been prepared pursuant to the requirements of the Development Charges Act (D.C.A.),1997 (s.10), and accordingly, recommends an A.S.D.C. and policies for the Wellington Urban Serviced Area for water and wastewater services. This D.C. background study, containing the proposed A.S.D.C. by-law, will be distributed to members of the public in order to provide interested parties with sufficient background information on the legislation, the study’s recommendations, and an outline of the basis for these recommendations. This report has been prepared, in the first instance, to meet the statutory requirements applicable to the County’s A.S.D.C. background study, as summarized in Chapter 1. It also addresses the forecast amount, type, and location of growth (Chapter 2), the requirement for “rules” governing the imposition of the charges (Chapter 3) and the proposed by-law to be made available as part of the approval process (Appendix B). In addition, the report is designed to set out sufficient background on the legislation and the policies underlying the proposed by-law, to make the exercise understandable to interested parties. Finally, the background study addresses post-adoption D.C. implementation requirements (Chapter 8) which are critical to the successful application of the new policy. A full discussion of the statutory requirements for the preparation of a background study and calculation of D.C. and capital charges is provided herein. 1.3 Summary of the Process The required Public Meeting under Section 12 of the D.C.A., 1997 has been scheduled for January 14, 2021. The public meeting will be held to present the study to the public and to solicit public input on the proposed A.S.D.C. by-law. The meeting is held to answer any questions regarding the study’s purpose, methodology and the proposed by-law. Figure 1-2 outlines the proposed schedule to be followed with respect to the D.C. by-law adoption process. Watson & Associates Economists Ltd. PAGE 1-5 H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
Figure 1-2
A.S.D.C. Study Process
Process Steps Dates
September 2020 to
1. Data collection, preparation of D.C. calculations
December, 2020
2. Review of A.S.D.C. draft findings with County staff October 2020
3. Present A.S.D.C. draft findings with development
November 9, 2020
industry stakeholders
4. Present draft A.S.D.C. Background Study to County
November 12, 2020
Council
5. Background study and proposed A.S.D.C. by-law
December 28, 2020
available to public
6. Statutory notice of Public Meeting advertisement placed 20 days prior to
in newspaper(s) public meeting
7. Public Meeting of Council January 14, 2021
8. Council considers adoption of background study and
February 25, 2021
passage of A.S.D.C. by-law
By 20 days after
9. Newspaper notice given of by-law passage
passage
40 days after
10. Last day for by-law appeal
passage
by 60 days after in
11. County makes available A.S.D.C. pamphlet
force date
Watson & Associates Economists Ltd. PAGE 1-6
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxIn accordance with the legislation, the background study and proposed A.S.D.C. by-law
will be made available at least 60 days prior to the passage of the by-law
The process to be followed in finalizing the report and recommendations includes:
• consideration of responses received prior to, at or immediately following the
public meeting; and
• finalization of the study and Council consideration of the A.S.D.C. on a date to be
determined.
Watson & Associates Economists Ltd. PAGE 1-7
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxChapter 2 Anticipated Development Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
2. Anticipated Development
2.1 Requirements of the Act
Chapter 3 provides the methodology for calculating a D.C. as per the D.C.A., 1997.
Figure 3-1 presents this methodology graphically. It is noted in the first box of the
schematic that in order to determine the D.C. that may be imposed, it is a requirement
of Section 5 (1) of the D.C.A. that “the anticipated amount, type and location of
development, for which D.C.s can be imposed, must be estimated.”
The growth forecast contained in this Chapter provides for the anticipated development
for which the County will be required to provide water and wastewater services over the
buildout of the Urban Serviced Area of Wellington. The defined Wellington Urban
Serviced Area is provided in Figure 2-1.
2.2 Anticipated Development in the Wellington Urban
Serviced Area
2.2.1 Basis of Population, Household, and Non-Residential Gross
Floor Area Forecast
The D.C. growth forecast for has been derived from the draft Wellington MSP prepared
by RV Anderson, and the County’s 2017 D.C. Background Study.
The draft Wellington MSP identifies an existing serviced population of 2,189 persons
and a buildout serviced population of 8,600 persons. As such, incremental
development of approximately 2,500 single-detached residential dwellings are forecast
to occur over the period, yielding a net population growth of 6,411 person. In addition to
residential development, the Wellington Urban Serviced Area includes 28 hectares of
non-residential employment lands for future development. Based on the gross floor
area (G.F.A.) per ha of land area assumptions from the County’s 2017 D.C. Background
Study, it is anticipated that the development of the non-residential employment lands
would yield approximately 927,400 sq.ft. of additional non-residential G.F.A. over the
forecast period. The forecast residential and non-residential development within the
defined Wellington Urban Serviced Area (see Figure 2-1) is summarized in Table 2-1.
Watson & Associates Economists Ltd. PAGE 2-1
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxFigure 2-1
Wellington Urban Serviced Area
Table 2-1
Wellington Urban Serviced Area
2020 Buildout Forecast Residential and Non-Residential Development
Residential Non-Residenital
Households Net ha of
(Single-Detached Developable
Description Population Equivalents) Land Sq.Ft. of G.F.A.
2020 2,189
Buildout 8,600
Incremental Change
2020-Buildout 6,411 2,504 28 927,393
Persons per Unit 1 Sq.ft. of G.F.A. per ha 1
Singles & Semi-Detached 2.56 Total 33,121
Multiples 1.47
Apartments 1.35
One bedroom or less 1.17
Two bedrooms or more 1.97
1. Prince Edward County 2017 D.C. Background Study
Watson & Associates Economists Ltd. PAGE 2-2
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxChapter 3 Approach to the Calculation of the Charge Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
3. Approach to the Calculation of the Charge
3.1 Introduction
This chapter addresses the requirements of s.s.5(1) of the D.C.A. with respect to the
establishment of the need for service which underpins the D.C. calculation. These
requirements are illustrated schematically in Figure 3-1.
3.2 Services Potentially Involved
s.s.2 (4) of the D.C.A. sets out the eligible services that can be included in a D.C. By-
law as follows:
• Water supply services, including distribution and treatment services.
• Wastewater services, including sewers and treatment services.
• Storm water drainage and control services.
• Services related to a highway.
• Electrical power services.
• Toronto-York subway extension, as defined in subsection 5.1 (1).
• Transit services other than the Toronto-York subway extension.
• Waste diversion services.
• Policing services.
• Fire protection services.
• Ambulance services.
• Library Services.
• Long-term care services.
• Parks and recreation services (but not the acquisition of land for parks).
• Public health services.
• Childcare and early years services.
• Housing services.
• Provincial Offences Act Services.
• Services related to emergency preparedness.
• Services related to airports, but only in the Regional Municipality of Waterloo.
• Additional services as prescribed
Watson & Associates Economists Ltd. PAGE 3-1
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxFigure 3-1 The Process of Calculating a Development Charge under the Act that must be followed Watson & Associates Economists Ltd. PAGE 3-2 H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
In addition to the above eligible services, the D.C.A. also sets out in s.s.7 (3) that a development charge by-law may provide for a class consisting of studies. Two ineligible costs defined in s.s.5(3) of the D.C.A. are “computer equipment” and “rolling stock with an estimated useful life of (less than) seven years...” In addition, local roads are covered separately under subdivision agreements and related means (as are other local services). The services contained within this A.S.D.C. Background Study are limited to water and wastewater services. 3.3 Increase in Need for Service The D.C. calculation commences with an estimate of “the increase in the need for service attributable to the anticipated development,” for each service to be covered by the by-law. There must be some form of link or attribution between the anticipated development and the estimated increase in the need for service. While the need could conceivably be expressed generally in terms of units of capacity, s.s.5(1)3, which requires that municipal council indicate that it intends to ensure that such an increase in need will be met, suggests that a project-specific expression of need would be most appropriate. 3.4 Local Service Policy Some of the need for services generated by additional development consists of local services related to a plan of subdivision. As such, they will be required as a condition of subdivision agreements or consent conditions. 3.5 Capital Forecast Paragraph 7 of s.s.5(1) of the D.C.A. requires that “the capital costs necessary to provide the increased services must be estimated.” The Act goes on to require two potential cost reductions and the Regulation sets out the way in which such costs are to be presented. These requirements are outlined below. Watson & Associates Economists Ltd. PAGE 3-3 H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
These estimates involve capital costing of the increased services discussed above.
This entails costing actual projects or the provision of service units, depending on how
each service has been addressed.
The capital costs include:
a) costs to acquire land or an interest therein (including a leasehold interest);
b) costs to improve land;
c) costs to acquire, lease, construct or improve buildings and structures;
d) costs to acquire, lease or improve facilities, including rolling stock (with a useful
life of 7 or more years), furniture and equipment (other than computer
equipment), materials acquired for library circulation, reference or information
purposes;
e) interest on money borrowed to pay for the above-referenced costs;
f) costs to undertake studies in connection with the above-referenced matters; and
g) costs of the D.C. background study.
In order for an increase in need for service to be included in the D.C. calculation,
municipal Council must indicate “...that it intends to ensure that such an increase in
need will be met” (s.s.5 (1)3). This can be done if the increase in service forms part of a
Council-approved Official Plan, capital forecast or similar expression of the intention of
Council (O.Reg. 82/98 s.3). The capital program contained herein reflects the County’s
approved and proposed capital budgets and Draft MSP.
3.6 Treatment of Credits
Section 8, paragraph 5, of O.Reg. 82/98 indicates that a D.C. background study must
set out “the estimated value of credits that are being carried forward relating to the
service.” Subsection 17, paragraph 4, of the same Regulation indicates that “...the
value of the credit cannot be recovered from future D.C.s,” if the credit pertains to an
ineligible service. This implies that a credit for eligible services can be recovered from
future D.C.s. As a result, this provision should be made in the calculation, in order to
avoid a funding shortfall with respect to future service needs.
The County currently has no outstanding credit obligations.
Watson & Associates Economists Ltd. PAGE 3-4
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx3.7 Classes of Services
Section 7 of the D.C.A. states that a D.C. by-law may provide for any D.C. eligible
service or the capital costs with respect to those services. Further, a class may be
composed of any number or combination of services and may include parts or portions
of each D.C. eligible services. With respect to growth-related studies, Section 7(3) of
the D.C.A. states that:
“For greater certainty, a development charge by-law may provide for a class
consisting of studies in respect of any service listed in subsection 2 (4) whose capital
costs are described in paragraphs 5 and 6 of subsection 5 (3).”
These provisions allow for services to be grouped together to create a class for the
purposes of the D.C. by-law and D.C. reserve funds. Eligible Debt and Committed
Excess Capacity
Section 66 of the D.C.A. states that for the purposes of developing a D.C. by-law, a debt
incurred with respect to an eligible service may be included as a capital cost, subject to
any limitations or reductions in the Act. Similarly, s.18 of O.Reg. 82/98 indicates that
debt with respect to an ineligible service may be included as a capital cost, subject to
several restrictions.
In order for such costs to be eligible, two conditions must apply. First, they must have
funded excess capacity which is able to meet service needs attributable to the
anticipated development. Second, the excess capacity must be “committed,” that is,
either before or at the time it was created, Council must have expressed a clear
intention that it would be paid for by D.C.s or other similar charges. For example, this
may have been done as part of previous D.C. processes.
3.8 Existing Reserve Funds
Section 35 of the D.C.A. states that:
“The money in a reserve fund established for a service may be spent only for capital
costs determined under paragraphs 2 to 8 of subsection 5(1).”
Watson & Associates Economists Ltd. PAGE 3-5
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxThere is no explicit requirement under the D.C.A. calculation method set out in s.s.5(1)
to net the outstanding reserve fund balance as part of making the D.C. calculation;
however, s.35 does restrict the way in which the funds are used in future.
Currently the County does not include water and wastewater services within their D.C.
By-Law and as such, no D.C. reserve funds have been established.
3.9 Deductions
The D.C.A. potentially requires that four deductions be made to the increase in the need
for service. These relate to:
• the level of service ceiling;
• uncommitted excess capacity;
• benefit to existing development; and
• anticipated grants, subsidies and other contributions;
The requirements behind each of these reductions are addressed as follows:
3.9.1 Reduction Required by Level of Service Ceiling
This is designed to ensure that the increase in need included in 3.3 does “…not include
an increase that would result in the level of service (for the additional development
increment) exceeding the average level of the service provided in the County over the
10-year period immediately preceding the preparation of the background study…”
O.Reg. 82.98 (s.4) goes further to indicate that “…both the quantity and quality of a
service shall be taken into account in determining the level of service and the average
level of service.”
In many cases, this can be done by establishing a quantity measure in terms of units as
floor area, land area or road length per capita and a quality measure, in terms of the
average cost of providing such units based on replacement costs, engineering
standards or recognized performance measurement systems, depending on
circumstances. When the quantity and quality factor are multiplied together, they
produce a measure of the level of service, which meets the requirements of the Act, i.e.
cost per unit.
Watson & Associates Economists Ltd. PAGE 3-6
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxThe average service level calculation is not required for environmental services such as
water and wastewater services as the level of service standards are dictated by other
legislation and servicing guidelines.
3.9.2 Reduction for Uncommitted Excess Capacity
Paragraph 5 of s.s.5(1) requires a deduction from the increase in the need for service
attributable to the anticipated development that can be met using the municipality’s
“excess capacity,” other than excess capacity which is “committed.”
“Excess capacity” is undefined, but in this case must be able to meet some or all of the
increase in need for service, in order to potentially represent a deduction. The
deduction of uncommitted excess capacity from the future increase in the need for
service would normally occur as part of the conceptual planning and feasibility work
associated with justifying and sizing new facilities, e.g. if a road widening to
accommodate increased traffic is not required because sufficient excess capacity is
already available, then widening would not be included as an increase in need, in the
first instance.
3.9.3 Reduction for Benefit to Existing Development
Section 5(1)6 of the D.C.A. provides that, “The increase in the need for service must be
reduced by the extent to which an increase in service to meet the increased need would
benefit existing development.” The general guidelines used to consider benefit to
existing development included the following:
• the repair or unexpanded replacement of existing assets that are in need of
repair;
• an increase in average service level of quantity or quality (compare water as an
example);
• the elimination of a chronic servicing problem not created by growth; and
• providing services where none previously existed (generally considered for water
or wastewater services).
This step involves a further reduction in the need, by the extent to which such an
increase in service would benefit existing development. The level of services cap in
3.9.1 is related but is not the identical requirement. Sanitary, storm and water trunks
are highly localized to growth areas and can be more readily allocated in this regard
Watson & Associates Economists Ltd. PAGE 3-7
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxthan other services such as services related to a highway, which do not have a fixed
service area.
Where existing development has an adequate service level which will not be tangibly
increased by an increase in service, no benefit would appear to be involved.
3.9.4 Reduction for Anticipated Grants, Subsidies and Other
Contributions
This step involves reducing the capital costs necessary to provide the increased
services by capital grants, subsidies and other contributions (including direct developer
contributions required due to the local service policy) made or anticipated by Council
and in accordance with various rules such as the attribution between the share related
to new vs. existing development (O.Reg. 82.98 s.6). That is, some grants and
contributions may not specifically be applicable to growth or where Council targets
fundraising as a measure to offset impacts on taxes. Moreover, Gas Tax revenues are
typically used to fund non-growth-related works or the non-growth share of D.C.
projects, given that the contribution is not being made in respect of particular growth-
related capital projects.
3.10 Municipal-wide vs. Area Rating
This step involves determining whether all of the subject costs are to be recovered on a
uniform municipal-wide basis or whether some or all are to be recovered on an area-
specific basis. Under the amended D.C.A., it is now mandatory to “consider” area-rating
of services (providing charges for specific areas and services), however, it is not
mandatory to implement area-rating. Further discussion is provided in section 7.3.8.
3.11 Allocation of Development
This step involves relating the costs involved to anticipated development for each period
under consideration and using allocations between residential and non-residential
development and between one type of development and another, to arrive at a schedule
of charges.
Watson & Associates Economists Ltd. PAGE 3-8
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxChapter 4 Development Charge Eligible Cost Analysis by Service Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
4. Development Charge Eligible Cost Analysis by Service 4.1 Introduction This chapter outlines the basis for calculating D.C. eligible costs for to be applied on an area-specific basis for the Wellington Urban Serviced Area. The required calculation process set out in s.5(1) paragraphs 2 to 8 in the D.C.A, 1997, and described in Chapter 3, was followed in determining D.C. eligible costs. The nature of the capital projects and timing identified in this chapter reflects Council’s current intention. However, over time, municipal projects and Council priorities may change and accordingly, Council’s intentions may alter, and different capital projects (and timing) may be required to meet the need for services required by new growth. This section evaluates the development-related capital requirements within the Wellington Urban Serviced Area for water and wastewater services over the 2020- buildout forecast period. The infrastructure upgrades that are required for immediate and long-term growth opportunities to for the buildout of the Wellington Urban Serviced Area, as identified in the draft Wellington MSP are summarized in the following sections. 4.2 Water Services 4.2.1 Water Treatment To provide capacity for buildout of the Wellington Urban Serviced Area, a new water treatment plant (WTP) will be required with a rated capacity of 8,500 m3/day. The new WTP will be built in two phases over the 2021-2031 period at capital cost estimate of $37.1 million. The WTP will also includes oversizing of the water intake pipe to accommodate capacity for neighbouring communities in the future. In determining the D.C. eligible capital costs, $813,600 has been deducted reflecting the incremental oversizing costs for potential development beyond the defined Wellington Urban Serviced Area (i.e. neighbouring communities). Furthermore, 18% ($6.5 million) of the residual capital costs have been deducted as a benefit to existing development to reflect the replacement of the existing maximum day water demands of 1,522 m3/day. Watson & Associates Economists Ltd. PAGE 4-1 H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
In aggregate, $29.8 million in net growth-related capital costs has been included in the calculation of the charge. 4.2.2 Water Storage and Distribution To meet the water storage and distribution needs of the existing residents and future development within the Wellington Urban Serviced Area a new elevated tank and trunk main along Millennium Trail are required. The elevated tank will be built in two phases for a total capital cost of $15.8 million. The first phase, which is anticipated to cost $6.9 million, will provide 4,500 m3 of storage capacity to meet the existing storage demands of 1,251 m3 and provide capacity for growth. In this regard, 28% of the phase 1 capital costs have been deducted as benefit to existing development. Moreover, in addition to meeting storage requirements of the existing community, the new elevated tank will also address existing water pressure issues, and as such, an additional 10% deduction of the phase 1 costs has been made. In aggregate, 38% of the phase 1 costs will be deducted as a benefit to existing development. The second phase of the elevated tank, which is estimated at a capital cost of $8.8 million, will provide a further 4,700 m3 of water storage and has been allocated entirely to the benefit of future growth. The preferred water distribution solution is to construct a 500mm trunk watermain along the Millennium Trail. While this watermain is principally required to connect new development areas to the municipal water system, it will also address fire flow and water pressure issues in the existing community. Furthermore, the trunk watermain has been oversized to accommodate future distribution needs of providing service to neighboring communities. The estimated capital costs of the trunk watermain is $10.3 million, of which $1.5 million is related to the oversizing of the main for neighboring communities. The remaining costs have been allocated to growth and existing development on the basis of current and forecast maximum day water demands (i.e. 18% benefit to existing development and 82% growth). 4.2.3 Water Services Summary In aggregate, for water services within the Wellington Urban Serviced Area, $63.2 million gross capital costs have been identified, including costs of $12,500 to undertake the D.C. Background Study process, of which $50.2 million has been included as growth-related capital costs in the calculation of the charge. The net growth-related Watson & Associates Economists Ltd. PAGE 4-2 H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
costs have been allocated 59% to residential and 41% to non-residential development
based on the relationship of anticipated incremental residential and non-residential
water demands over the buildout period from the Wellington MSP (i.e. 4,235 m3
residential and 2,940 m3 non-residential).
Table 4-1
Infrastructure Costs Included in the Wellington Urban Serviced Area A.S.D.C.
Calculation for Water Services
Potential D.C. Recoverable Costs
Net Growth Benefit to Existing
Gross Post Period Non-
Description Timing Related Development Residenital
Capital Cost Benefit Total Residential
Costs
% $ 59% 41%
WTP
Phase 1 2021-2024 23,500,000 - 23,500,000 18% 4,207,882 19,292,118 11,387,055 7,905,063
Phase 2 Pre 2042 13,600,000 813,600 12,786,400 18% 2,289,518 10,496,882 6,195,721 4,301,162
Water Tower
New Elevated Tank 2019-2021 6,950,000 - 6,950,000 38% 2,627,100 4,322,900 2,551,565 1,771,335
2nd Water Tank/Resvoir Post 2042 8,850,000 - 8,850,000 0% - 8,850,000 5,223,659 3,626,341
Watermain Trunk
Watermain Trunk 2020-2022 10,300,000 1,469,305 8,830,695 18% 1,581,214 7,249,481 4,278,962 2,970,519
Studies
D.C. Background Study 2021 12,500 - 12,500 0% - 12,500 7,378 5,122
Total 63,212,500 2,282,905 60,929,595 18% 10,705,714 50,223,881 29,644,339 20,579,541
4.3 Wastewater Services
4.3.1 Wastewater Treatment
To address existing capacity issues during wet weather conditions and provide capacity
for the buildout of the Wellington Urban Serviced Area, a new wastewater treatment
plant (WWTP) has been proposed. The WWTP will provide maximum day capacity of
10,340 m3/day in comparison to current maximum day demands of 2,940 m3/day. The
WWTP is proposed to be built in two phases. The total gross capital cost estimate for
the WWTP is $27.7 million. In this regard 28% of the costs (or $7.9 million) have been
deducted as a benefit to existing development to reflect the current maximum day
demands.
4.3.2 Wastewater Collection and Conveyance
To accommodate anticipated incremental wastewater flows from new development, as
provided in the Wellington MSP, a new sanitary trunk main along Millennium Trail will be
required. The anticipated capital costs for the project of $5.5 million have been
allocated 100% to new development, as the sanitary trunk is designed to accommodate
Watson & Associates Economists Ltd. PAGE 4-3
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxthe needs of future development and do not improve the level of service of the existing
community.
4.3.3 Wastewater Service Summary
The capital costs to address future service demands of the Wellington Urban Serviced
Area over the buildout period include wastewater treatment and collection needs
totaling $33.2 million, including costs of $12,500 to undertake the D.C. Background
Study process. Of the total capital costs, $7.9 million has been deducted as a benefit to
existing development. The net growth-related costs have been allocated 66% to
residential and 34% to non-residential development based on the relationship of
incremental residential and non-residential wastewater flows over the buildout period
from the Wellington MSP (i.e. 1,973 m3 residential and 1,015 m3 non-residential).
Table 4-2
Infrastructure Costs Included in the Wellington Urban Serviced Area A.S.D.C.
Calculation for Wastewater Services
Potential D.C. Recoverable Costs
Net Growth Benefit to Existing
Gross Post Period Non-
Description Timing Related Development Residenital
Capital Cost Benefit Total Residential
Costs
% $ 66% 34%
WWTP
Phase 1 2020-2024 24,900,000 - 24,900,000 28% 7,072,660 17,827,340 11,771,534 6,055,807
Phase 2 Post 2042 2,800,000 - 2,800,000 28% 795,319 2,004,681 1,323,707 680,974
Sanitary Trunk
Sanitary Trunk 2020-2022 5,555,479 - 5,555,479 0% - 5,555,479 3,668,326 1,887,152
Studies
D.C. Background Study 2021 12,500 - 12,500 0% - 12,500 7,378 5,122
Total 33,267,979 - 33,267,979 24% 7,867,979 25,400,000 16,770,945 8,629,055
Watson & Associates Economists Ltd. PAGE 4-4
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxChapter 5 D.C. Calculation Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
5. D.C. Calculation
The calculation of the maximum Wellington Urban Serviced Area A.S.D.C.s that could
be imposed by Council have been undertaken using a cash-flow approach for the
growth-related capital costs identified in Chapter 4. The cash-flow calculations account
for the timing of revenues and expenditures and the resultant financing needs. The
cash-flow calculations have been undertaken separately for water and wastewater
services, and for each forecast development type, i.e. residential and non-residential.
A.S.D.C. cash flow calculation tables are provided in Appendix A and have been
undertaken to account for 2% earnings on A.S.D.C. reserve fund balances and 4%
interest charged for reserve fund borrowing.
The A.S.D.C. cash-flow calculations are summarized in Table 5-1 for over the 2020-
buildout forecast period for the Wellington Urban Serviced Area.
The calculation for residential development is generated on a per capita basis and is
based upon six forms of housing types:
• single and semi-detached (>2 bedrooms)
• single and semi-detached (2 bedrooms); and
• other multiples (Table 5-1
Wellington Urban Service Area A.S.D.C. Calculation
2020-Buildout
D.C. Eligible Costs Development Charges
SERVICE/CLASS Residential Non-Residential S.D.U. per sq.ft.
1. Wastewater Services 16,763,567 8,623,933 7,891 10.29
2. Water Services 29,636,961 20,574,419 13,476 23.85
TOTAL $46,400,528 $29,198,353 $21,367 34.14
Financing Costs $4,353,694 $2,465,876
D.C.-Eligible Capital Cost $50,754,222 $31,664,229
Buildout Gross Population/GFA Growth (sq.ft.) 6,543 927,393
Cost Per Capita/Non-Residential GFA (sq.ft.) $7,756.90 $34.14
By Residential Unit Type P.P.U.
Single and Semi-Detached Dwelling (> 2 bedrooms) 2.755 $21,367
Single and Semi-Detached Dwelling (= 2 bedrooms) 1.541 $11,953
Other Multiples (=Chapter 6 D.C. Policy Recommendations and D.C. By-law Rules Watson & Associates Economists Ltd. H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx
6. D.C. Policy Recommendations and D.C. Policy
Rules
6.1 Introduction
Subsection 5 (1) 9 states that rules must be developed:
“...to determine if a development charge is payable in any particular case
and to determine the amount of the charge, subject to the limitations set
out in subsection 6.”
Paragraph 10 of the section goes on to state that the rules may provide for exemptions,
phasing in and/or indexing of D.C.s.
Subsection 5 (6) establishes the following restrictions on the rules:
• the total of all D.C.s that would be imposed on anticipated development must not
exceed the capital costs determined under 5(1) 2-8 for all services involved;
• if the rules expressly identify a type of development, they must not provide for it
to pay D.C.s that exceed the capital costs that arise from the increase in the
need for service for that type of development; however, this requirement does not
relate to any particular development; and
• if the rules provide for a type of development to have a lower D.C. than is
allowed, the rules for determining D.C.s may not provide for any resulting
shortfall to be made up via other development.
With respect to “the rules,” section 6 states that a D.C. by-law must expressly address
the matters referred to above re subsection 5 (1) paragraphs 9 and 10, as well as how
the rules apply to the redevelopment of land.
The rules provided are based on the County’s existing D.C. policies; with consideration
for the D.C.A. amendments from the More Homes, More Choice Act and COVID-19
Economic Recovery Act.
Watson & Associates Economists Ltd. PAGE 6-1
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx6.2 D.C. By-law Structure
It is recommended that:
• the County uses an A.S.D.C. calculation for water and wastewater services
within the Wellington Urban Serviced Area; and
• one A.S.D.C. by-law be used for all services.
6.3 D.C. By-law Rules
The following subsections set out the recommended rules governing the calculation,
payment and collection of D.C.s in accordance with section 6 of the D.C.A.
It is recommended that the following sections provide the basis for the D.C.s.:
6.3.1 Payment in any Particular Case
In accordance with the D.C.A., subsection 2 (2), a D.C. be calculated, payable and
collected where the development requires one or more of the following:
“(a) the passing of a zoning by-law or of an amendment to a zoning by-
law under section 34 of the Planning Act;
(b) the approval of a minor variance under section 45 of the Planning
Act;
(c) a conveyance of land to which a by-law passed under subsection 50
(7) of the Planning Act applies;
(d) the approval of a plan of subdivision under section 51 of the Planning
Act;
(e) a consent under section 53 of the Planning Act;
(f) the approval of a description under section 9 of the Condominium
Act, 1998; or
(g) the issuing of a permit under the Building Code Act, 1992 in relation
to a building or structure.”
Watson & Associates Economists Ltd. PAGE 6-2
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docx6.3.2 Determination of the Amount of the Charge
The following conventions be adopted:
1) Costs allocated to residential uses will be assigned to different types of
residential units based on the average occupancy for each housing type
constructed during the past 20 years. Costs allocated to non-residential uses will
be assigned based on the amount of square feet of gross floor area constructed
for eligible uses (i.e. industrial, commercial and institutional).
2) Costs allocated to residential and non-residential uses are based upon a number
of conventions, as may be suited to each municipal circumstance, as detailed in
Chapter 4.
6.3.3 Application to Redevelopment of Land (Demolition and
Conversion)
If a development involves the demolition of and replacement of a building or structure
on the same site, or the conversion from one principal use to another, the developer
shall be allowed a credit equivalent to:
1) the number of dwelling units demolished/converted multiplied by the applicable
residential A.S.D.C. in place at the time the A.S.D.C. is payable; and/or
2) the gross floor area of the building demolished/converted multiplied by the
current non-residential A.S.D.C. in place at the time the A.S.D.C. is payable.
The credit can, in no case, exceed the amount of A.S.D.C.s that would otherwise be
payable. Moreover, the applicant will need to provide evidence the building was
habitable prior to demolition to be eligible for redevelopment credits.
6.3.4 Exemptions (full or partial)
a) Statutory exemptions:
• industrial building additions of up to and including 50% of the existing gross
floor area (defined in O.Reg. 82/98, section 1) of the building; for industrial
building additions which exceed 50% of the existing gross floor area, only the
Watson & Associates Economists Ltd. PAGE 6-3
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxportion of the addition in excess of 50% is subject to A.S.D.C. (subsection 4
(3) of the D.C.A.);
• buildings or structures owned by and used for the purposes of any
municipality, local board or Board of Education (section 3); and
• residential development that results only in the enlargement of an existing
dwelling unit, or that results only in the creation of up to two additional
dwelling units (based on prescribed limits set out in section 2 of O. Reg.
82/98).
• The creation of a second dwelling unit in prescribed classes of proposed new
residential buildings, including structures ancillary to dwellings, subject to the
prescribed restrictions based on prescribed limits set out in s.2 of O.Reg.
82/98.
b) Non-statutory exemptions:
• A reduction of 30% in D.C.s is allowed for the affordable housing, as defined in
the by-law, for any residential dwelling unit for which the purchase price is at
least 25% less than the average purchase price for the same type of residential
dwelling unit in the County of Prince Edward and for any residential dwelling unit
where the monthly rent is at or below the maximum affordable monthly rent
amount established by the Residential Rental Standers board for the Province of
Ontario; and
• Where Municipal Act Capital charges have been paid under By-law 4019-2017,
the amount paid will be credited against the A.S.D.C. payable.
6.3.5 Phasing in
No provisions for phasing in the D.C. are provided in the A.S.D.C. by-law.
6.3.6 Timing of Collection
The A.S.D.C. for all services and classes are payable upon issuance of the first building
permit for each dwelling unit, building, or structure, subject to early or late payment
agreements entered into by the municipality and an owner under s.27 of the D.C.A.,
1997.
As of January 1, 2020, rental housing and institutional developments will pay D.C.s in
six equal annual payments commencing at occupancy. Non-profit housing
Watson & Associates Economists Ltd. PAGE 6-4
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxdevelopments will pay D.C.s in 21 equal annual payments. Moreover, the D.C. amount
for all developments occurring within 2 years of a Site Plan or Zoning By-law
Amendment planning approval (for applications submitted after January 1, 2020), shall
be determined based on the D.C. in effect on the day of the Site Plan or Zoning By-law
Amendment application.
Installment payments and payments determined at the time of Site Plan or Zoning By-
law Amendment application may be subject to annual interest charges. The County will
be considering the applicable interest rate through the public process prior to the
passage of the A.S.D.C. by-law.
For the purposes of administering the By-law, the following definitions are provided as
per O. Reg. 454-19:
“Rental housing” means development of a building or structure with four or more
dwelling units all of which are intended for use as rented residential premises.
“Institutional development” means development of a building or structure intended for
use,
a. as a long-term care home within the meaning of subsection 2 (1) of the Long-
Term Care Homes Act, 2007;
b. as a retirement home within the meaning of subsection 2 (1) of the Retirement
Homes Act, 2010;
c. by any of the following post-secondary institutions for the objects of the
institution:
i. a university in Ontario that receives direct, regular and ongoing operating
funding from the Government of Ontario,
ii. a college or university federated or affiliated with a university described in
subclause (i), or
iii. an Indigenous Institute prescribed for the purposes of section 6 of the
Indigenous Institutes Act, 2017;
d. as a memorial home, clubhouse or athletic grounds by an Ontario branch of the
Royal Canadian Legion; or
e. as a hospice to provide end of life care.
“Non-profit housing development” means development of a building or structure
intended for use as residential premises by,
Watson & Associates Economists Ltd. PAGE 6-5
H:\Prince Edward County\Wellington Upfront Financing\Report\Draft Background Study - Final.docxYou can also read
