Report Template

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

14 December 2006 / le 14 décembre 2006

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/

Directrice municipale adjointe,

Planning, Transit and the Environment /

Urbanisme, Transport en commun et Environnement

Contact Person/Personne ressource : Larry Morrison, Manager,

Infrastructure Approvals Division

Planning and Infrastructure Approvals/Approbation des demandes

d’aménagement et d’infrastructure

(613) 580-2424 x 27811, Larry.Morrison@ottawa.ca

Kanata (4)

Ref N°: ACS2007-PTE-APR-0002

SUBJECT:	AMENDMENT TO DEVELOPMENT CHARGES BY-LAW 2004-307 MONAHAN DRAIN AND FRONT-ENDING AGREEMENT STORMWATER MANAGEMENT FACILITY AREA 2

OBJET :	MODIFICATION AU RÈGLEMENT MUNICIPAL SUR LES REDEVANCES D'AMÉNAGEMENT 307-2004 - DRAIN MONAHAN ET ACCORD DE FINANCEMENT ANTICIPÉ POUR L'INSTALLATION DE RÉGULATION DES EAUX PLUVIALES, SECTEUR 2

REPORT RECOMMENDATIONS

That the Corporate Services and Economic Development Committee recommend Council:

1. Approve the amending background study as identified in Document 3, being an amendment to Development Charges By-law 2004-307 to reflect changes in the rates of the benefiting area for the Monahan Drain Area (W-1);

2. Authorize the City to enter into a Front-Ending Agreement with TCK Co-Tenancy and Claridge Homes (Eagleson) Inc. for the cost reimbursement for land acquisition, design, and construction of the Monahan Drain Stormwater Management Facility, Area 2 based upon the principles set out in Document 1, and City Council approved Front-Ending Policy noted in Document 2 with the final form and content of the Front-Ending Agreement being to the satisfaction of the Deputy City Manager, Planning, Transit and the Environment and the City Solicitor;

3. Approve the expenditure of $6,361,125.00 for land acquisition, design and construction of the Monahan Drain Stormwater Management Facility Area 2, subject to the execution of the Front-Ending Agreement; and

4. Authorize the City to establish a budget in the amount of $6,361,125.00 for the Monahan Drain Stormwater Management Facility Area 2 land acquisition, design, and construction, under Internal Order Number 903250: Stormwater Pond Monahan Drain.

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

1. d’approuver l'étude préliminaire de modification décrite dans le document 3, modification portant sur le règlement municipal sur les redevances d'aménagement 307-2004 et visant à refléter les changements de taux dans le secteur du drain Monahan (W-1) ;

2. d’autoriser la Ville à passer un accord de financement anticipé avec TCK Co-Tenancy et Claridge Homes (Eagleson) Inc., en vue du remboursement des coûts d'acquisition de terrain, de conception et de construction de l'installation de régulation des eaux pluviales du drain Monahan, Secteur 2, selon les principes énoncés dans le document 1 et conformément à la politique sur le accords de financement anticipé, approuvée par le Conseil municipal, notée dans le document 2. La forme et le contenu définitifs de l'accord de financement anticipé devront être à la satisfaction de la Directrice municipale adjointe, Urbanisme, Transport en commun et Environnement, et du chef du contentieux ;

3. d’approuver une dépense de 6 361 125 $ pour l'acquisition de terrain, la conception et la construction de l'installation de gestion des eaux pluviales du drain Monahan, Secteur 2, sous réserve de l'application de l'accord de financement anticipé ; et

4. d’autoriser la Ville à établir un budget au montant de 6 361 125 $ pour l'acquisition de terrain, la conception et la construction de l'installation de gestion des eaux pluviales du drain Monahan, Secteur 2, sous le numéro de commande interne 903250 : Bassin de rétention des eaux pluviales, drain Monahan.

BACKGROUND

The Monahan Drain Constructed Wetland Stormwater Management Pond is located at the southern limit of Kanata and is bounded by Terry Fox Drive to the west, Hope Side Road to the south and the community of Bridlewood to the east. The project was approved through the completion of a Master Drainage Plan in March of 1993 in accordance with Phases 1 and 2 of the Class Environmental Assessment process. Subsequently, a Final Design Report was completed in December of 1993 and approved as a Schedule B Project under the Class Environmental Assessment process. A Ministry of Environment Certificate of Approval has been obtained for the entire stormwater facility and at this time, approximately half of the approved facility has been constructed that services Area 1 within the Bridlewood Community.

The former City of Kanata established a Development Charge for the entire Monahan Drain Constructed Wetland stormwater project. In 2004 Council approved Area Specific Development Charge By-law 2004-307, for the Monahan Drain Stormwater Facility. When development within Area 2 proceeds, the remaining works are to be completed by the developers through a Front-Ending Agreement. Development is now imminent in Area 2, which necessitates the completion of the remaining stormwater works.

The original Kanata By-law was based upon a Commercial designation for the lands, which were subject to the stormwater charge. The Official Plan re-designated these lands as an Enterprise Area. The current By-law rate will be changed to reflect the introduction of a mix of residential and non-residential lands. Final details of the facility and cost estimates have been prepared and have substantially increased to reflect the inclusion of land costs, design changes, and to reflect current construction costs. The developers wish to enter into a Front-Ending Agreement with the City in order to complete the storm pond works to allow their development to occur.

DISCUSSION

General

Both TCK Co-Tenancy and Claridge Homes (Eagleson) Inc. have submitted and received approval for the development of Plans of Subdivision within the catchment area of the stormwater facility. As part of the conditions of Draft Plan Approval the developers are required to construct the stormwater management facility in accordance with the approved design and to the satisfaction of the City. The stormwater facility is subject to Development Charge By-law 2004-307, which requires the developers to enter into a Front-Ending Agreement with the City to build the storm pond. In addition an amendment to the Area Specific Development Charge is required to reflect the changes in land uses and updated cost estimates.

By-law Amendment

At the time of establishing the Development Charge By-law 2004-307, the lands within the catchment area were designated Commercial. With the adoption of the Official Plan, the designation of the lands changed to an Enterprise Area. The Enterprise Area designation requires at least 50% of the developable lands be devoted to employment uses. Subject to certain criteria, residential development is also permitted in an Enterprise Area. The approved Plans of Subdivision are in accordance with the Official Plan changes in land use which necessitate revised growth projections, cost estimates, and amended Area Specific Stormwater development charge rate as indicated in Document 3.

Front-Ending

The estimated cost for the stormwater facility is $6,361,125.00. TCK Co‑Tenancy and Claridge Homes (Eagleson) Inc. are prepared to front-end the total cost of the design, construction and land acquisition for the Area 2 pond works. As such the Owners will be required to enter into a Front-Ending Agreement for the amount of $6,361,125.00 based on the principles set forth in Document 1, and Council approved Front-Ending Policy noted in Document 2 with the final form and content of the Front-Ending Agreement being to the satisfaction of the Deputy City Manager, Planning, Transit and the Environment and the City Solicitor.

CONSULTATION

Given the change of land designation within the area of the specific charge, an amendment to the By-law is required. An amendment to the Development Charge By-law requires public consultation. The public meeting will occur at the Corporate Services and Economic Development Committee meeting of January 16, 2007. A notice of the proposed By-law amendment was advertised in Le Droit and the Citizen newspapers on December 22, 2006 and January 12, 2007. Copies of the report entitled Background Study Update September 18, 2006 Monahan Drain Area W-1 By-law 2004-307 were made available to the public as of September 18, 2006.

FINANCIAL IMPLICATIONS

Area-Specific Development Charge Background Study for Individual Stormwater Management Ponds and Drainage Systems identified the overall cost to be recovered from the Monahan Drainage Area (W-1) projects at $6,590,000. Based on the 2004 anticipated land use within Area W-1, the residential and non-residential attributions were 71% ($4,652,000) residential and 29% ($1,938,000) non-residential. However as a result of the new Official Plan changing the designation to Enterprise Area, the revised total costs to Area W-1 has increased to $7,603,931 with an 84% allocation to residential and a 16% allocation to non-residential. To date there has been only two sites developed within Area 2 and as such, minimal development charges have been collected. Therefore, the resulting total allocations including the negative reserve fund balance and debt payments from the first phase of the pond will result in an allocation of $7,150,228 to residential, and $1,349,745 to non-residential, which will result in an increase in the development charge rates. The changes are reflected in Document 3.

Costs associated with design, construction, and land acquisition for the Monahan Drain Stormwater Facility Area 2 will amount to $6,361,125. Subject to Council approval, the Front-Ender would be paid back pursuant to the principles set out in Document 1 and the Council approved Front-Ending Policy as noted in Document 2.

The total cost to be reimbursed to the Front-Enders are summarized as follows.

Project Costs

Developer	Development Charge Item	Development Charge Up-Set Limit	Criteria for Repayment
Claridge Homes (Eagleson)	Design, Construction, and Land for their portion of the Area 2 Stormwater Facility	$2,499,625	Repayment based on actual value of pond works to an upset limit of $2,499,625. (Land cost are based on City approved land appraisals)
TCK Co-Tenancy	Design, Construction, and Land for their portion of the Area 2 Stormwater Facility	$3,861,500	Repayment based on actual value of pond works to an upset limit of $3,861,500. (Land cost are based on City approved land appraisals)
Sub Total		$6,361,125

The Long Range Financial Plan forecasted the construction of the Monahan Drain Area 2 Stormwater Facility in 2005 with an estimated operational impact of $20,000 per year starting in 2006. This has been updated to $60,000 per year starting in 2008. The existing deferred revenue account 830251 established for the Monahan Drain Area Specific Stormwater Development Charge reserves collected from Area W-1, By-law 2004-307, will be used to fund this capital project and reimburse the Front-Enders on a quarterly basis. As such, it is recommended that City Council authorize the City to establish a budget in the amount of $6,361,125 for the related Monahan Drain Area 2 Stormwater Facility, land acquisition, design, and construction under internal order number 903250 Stormwater Pond Monahan Drain.

Should other Development Charge Storm related works within the same Area Specific Stormwater Development Charge Area be constructed during the life of this Front-Ending Agreement, the Front-Enders acknowledge that they will share on a pro-rata basis with other stormwater drainage projects in the distribution of Development Charge Revenue.

SUPPORTING DOCUMENTATION

Document 1 Front-Ending Policy Agreement Principles

Document 2 Council Approved Front-Ending Policy

Document 3 Background Study Update September 18, 2006 Monahan Drain (Area W-1) By‑law 2004-307

DISPOSITION

The report will be forwarded to City Council for a decision on January 24, 2007. Following the decision, any amendment to the By-law will be advertised in the Citizen and LeDroit within 20 days. The public will have 40 days to appeal the amendment to the Ontario Municipal Board. In regards to the Front-Ending agreement the final form of the agreement will be prepared by Legal Services in consultation with the Planning, Transit and the Environment Department. Building Services Division will be informed of the revised rates pending Council approval and the passing of the amended by-law for administration.

AMENDMENT TO DEVELOPMENT CHARGES BY-LAW 2004-307 MONAHAN DRAIN AND FRONT-ENDING AGREEMENT STORMWATER MANAGEMENT FACILITY AREA 2

MODIFICATION AU RÈGLEMENT MUNICIPAL SUR LES REDEVANCES D'AMÉNAGEMENT 307-2004 - DRAIN MONAHAN ET ACCORD DE FINANCEMENT ANTICIPÉ POUR L'INSTALLATION DE RÉGULATION DES EAUX PLUVIALES, SECTEUR 2

ACS2007-PTE-APR-0002 Kanata-North (4)

Mr. L. Morrison, Manager, Infrastructure Approvals Division, Planning and Infrastructure Approvals Branch, Planning, Transit and Environment Department, spoke to a brief PowerPoint slide presentation, which served to provide the Committee with an overview of the staff report. A copy of his presentation is held on file.

Mr. Morrison indicated staff had recently become aware that one developer within the collection area had concerns about the resulting increase to the residential component of the development charge (DC). He provided the following context with respect to the history related to the matter:

s The first phase of project was constructed in 1996.

s In 1999, Kanata undertook an amendment to its Development Charge By-law for this particular stormwater management facility. It broke the project into two collection areas. The first collection area was primarily made up of the community known as Bridlewood. This area was primarily residential, with some commercial mix. The second collection area was entirely commercial.

s Two different rates were being collected for those areas. One was geared to the residential component, which was underway in Bridlewood. The other rate related to the commercial area in which construction had yet to commence, and was why this matter is now before Committee and Council.

s In addition, a component of the drainage area lay within the area of the former Township of Goulbourn and at the time, it was unclear what would happen with that portion, though it was expected to be primarily commercial development with an assessed charge based on that expectation.

s In 2004, the City introduced its own DC By-law for the Monahan Drain Area. Because the former municipal boundaries no longer existed, it was decided that the Monahan Drain Area would become one collection area that would include the components of both the former City of Kanata and the former Township of Goulbourn.

s At approximately the same time, the City’s new Official Plan (OP) came into being and what had previously been expected to be a Commercial Area became known as an Enterprise Area. This reduced the amount of commercial development that would take place and increased the amount of residential development.

s The City is currently in receipt of two draft plans of subdivision; one by PCK Co-Tenancy, the other by Claridge Homes. These developers would now like to move forward with the second phase of construction on the Monahan Drain, the first phase of which was constructed in the 1990’s to accommodate the residential development in Bridlewood.

s Updated growth projections have been determined based on the concurrent development plans submitted by PCK Co-Tenancy and Claridge Homes and, now that the City has a more detailed design for the area, updated cost estimates have been prepared.

s The new information results in a need to amend By-law 2004-307.

s In 1993, the City of Kanata estimated the total cost of the project to be somewhere in the range of $6.5 to $6.6 million. Updated estimates put the cost of the project at approximately $8.5 million.

s One area developer has expressed concerns over the resulting increase to the residential development charge. It is increasing from about $550.00 per unit to about $2,300.00 per unit. This relates to the estimated $2 million increased cost to the project due to the availability of more detailed information with respect to land costs and construction costs. In addition, the increase on the residential side is a result of a large component of the commercial area changing to residential.

The Committee heard from the following delegations.

Ms. J. Bradley, Legal Counsel on behalf of Urbandale Corporation, indicated she had only been retained the previous day because that was when Urbandale learned of the proposed By-law amendment. She noted that the amendment would increase the area-specific development charges that apply to Urbandale’s Bridlewood lands from $556.00 to $2,370.00 on every building permit received, just as it relates to stormwater. She referred to the map contained in the staff presentation, noting that Eagleson Road ran through the middle of the area, and she reminded Committee that Urbandale had been a major builder in the area East of Eagleson Road since the late 1980’s. She remarked that the land owned by PCK Co-Tenancy was to the West of Eagleson Road, in Area 2.

With respect to the area East of Eagleson Road, she recalled that in 2004, the City had performed a comprehensive review of its DC By-laws and had established an area-specific DC for stormwater. That By-law set the cost at $556.00 for single family homes. She reported that all of the lands developed by Urbandale drained into the pond already constructed on the East side.

Subsequent to 2004, Urbandale proceeded to registered many plans of subdivision and continued to be active in executing subdivision agreements, all of which are ready to move forward. Urbandale has been developing and marketing, and some lots have been sold, all based on the $556.00 DC previously set, the basis upon which Urbandale had signed its subdivision agreements.

Ms. Bradley noted that generally, DC By-laws are reviewed every five years. Therefore, Urbandale assumed the previously set $556.00 was the DC to which they would be bound until 2009. She indicated Urbandale had learned, only by chance on the previous day, that the price on which they had based their house sales would increase by approximately $1,800.00 per unit. She referenced page 257 of the agenda and the staff presentation, noting staff’s explanation for the increase was that it related to a change in the designation of the lands on the West side of Eagleson Road and that the additional costs should be shared by everyone. She indicated Urbandale’s position was that the City was changing the rules in the middle of the game. She maintained that it was unfair to burden those who already had sales agreements, commitments to purchase and/or registered plans of subdivision, with additional costs that related primarily to Area 2 developers on the West side who needed a new pond.

Ms. Bradley concluded by re-iterating Urbandale’s position that the proposed amendment was unfair. She suggested that one of two things should happen; either the lands on the east side of Eagleson Road should be exempted from the increase, or at the very least, all registered plans of subdivision should be exempted.

Councillor Hume referenced the delegation’s comments about DC’s normally being reviewed every five years, and that therefore, Urbandale had assumed they were locked into the current rate until 2009. He noted that the City had the ability to recover costs by increasing DC’s through the normal review process; i.e., should the City build the pond and then discover that its previous cost estimates had been too low. Therefore, he asked Ms. Bradley whether the lands Urbandale sought to have exempted from this proposed amendment would be subject to the new fee or the old fee in the normal course of events and a five-year DC review. Ms. Bradley stated that if the City was actually amending its DC By-law to provide for new facilities, and should this by-law come into effect, the developer would be obligated to pay on the basis of the new fee.

Councillor Hume wondered what would happen if the City had under-estimated the cost of the service and subsequently sought to recover its full cost. Ms. Bradley responded by questioning whether the City had underestimated costs in 2004. She suggested it was hard to imagine that people would not have anticipated the costs of providing storm drainage for the area throughout the development process because, at that time, Bridlewood had been up and running, Urbandale had registered plans and Minto had been constructing. She maintained that was the basis on which the 2004 by-law was passed. She referenced the scope of the proposed increase and suggested it was the result of new growth projected for the west side of Eagleson Road. Therefore, she questioned whether existing developers on the East side should be burdened as a result of new growth on the West side. She maintained that to be fair, they should not.

Councillor Wilkinson requested clarification with respect to the lands Urbandale sought to have exempted. Ms. Bradley indicated Urbandale had approximately 600 lots registered, though they had not yet paid building permit fees, and a number of other lots as yet unregistered. However, she confirmed that at the least, they would like the 600 registered lots to be exempted from the proposed increase.

Responding to questions from Councillor Wilkinson, Mr. Morrison confirmed that the portion of the facility previously constructed was supporting the Bridlewood community. However, he advised that Phase 2 of the facility was needed in order to accommodate additional growth related to complete the build-out of the Bridlewood community. He estimated that even without development to the West of Eagleson Road, the existing facility would need to increase by approximately 25% to 30% in order to accommodate the aforementioned growth in Bridlewood.

Responding to a further question from the Councillor regarding the change from commercial to residential, Mr. Morrison suggested this would have contributed only minimally to the cost increase. He re-iterated that the main reason for the increase related to the additional $2 million in costs and the fact that commercial cost was now being attributed to the residential component.

Mr. J. Riddell, Novatech Engineering, representing Claridge Homes, indicated Novatech was the engineering firm that updated the design of the facility, the drainage report and the cost estimates. He felt staff had represented the situation well in that the DC By-law needed to be updated to reflect the actual costs based on the detailed designs, the actual unit count and the distribution of residential and non-residential use. He stated that the conversion from industrial to residential had resulted in virtually no increase to the costs. He explained that aside from some slight adjustments becaue of development patterns, there were no changes to the design of the previously approved Phase 2 pond, either in size or configuration. He indicated the size of the facility, the drainage area going into it and the volumetric calculations were virtually the same. There had been some changes to the facilities draining into it, but the facility was virtually identical to what was approved in 1993. He advised that the cost increases related primarily to the inclusion of land that was not included in the 2004 By-Law and updates to the construction estimates to properly reflect 2006 prices. Mr. Riddell reported that Claridge had been working with City staff for some time in order to have this updated. He advised that Claridge had begun construction and was eager to enter into a front-ending agreement in order to properly recover costs. In closing, he noted that the facility was always intended to serve and benefit the whole area, both East and West of Eagleson Road and that the City could not really distinguish between the old facility and the new because the new facility was simply Phase 2 of a previously-approved facility. He maintained that as it benefited the whole area, the whole area should share equitably in the costs. He felt it would be unfair to apply one rate to the people East of Eagleson Road and a different rate to those West of it simply because they were ahead of the competition. He suggested developers to the East had benefited because the rate had been set too low and should have been set at $2,300.00 two years earlier. He referenced the range in development charges across the City for stormwater facilities, noting they were between $2,000.00 and $4,000.00 for single family dwellings, and he submitted that the developers to the East of Eagleson Road had actually benefited from an $1,800.00 break on all the building permits they had pulled in the last two years.

Mr. B. Karam, TCK Co-Tenancy, noted there were essentially five owners affected: Minto and Urbandale to the East of Eagleson Road; TCK Co-Tenancy, Claridge and one other to the West. He suggested the real issue was the evolving concept of front-ending, that all parties were going through a learning curve and that there were some remaining inequities. He submitted that it came down to sharing, to responsibility and to learning to share the responsibility fairly. He felt this was not about increasing costs for the people East of Eagleson Road but about eliminating a temporary reduction they had been benefiting from thus far. He suggested further policy development was need on the City’s part as the concept of front-ending evolved. For instance, he noted that Minto had not sent a representative to the meeting because, knowing this proposal was coming forward, they pulled all their building permits in order to benefit from the lower rate before it could be increased. He maintained that policies would need to be implemented in order to avoid such situations in future. In this case, because the first units received the benefit of phasing, and because this benefit is being eliminated, TCK Co-Tenancy and Claridge will not enjoy the same benefit (i.e. the lower DC) for their units as Minto received for theirs and that Urbandale received for its first 200 or so units. Mr. Karam maintained that everyone should be on a level playing field. He advised that developers were not paying this cost because it would be passed onto future purchasers of the homes being constructed. Therefore, this increase will not affect Urbandale directly because they can build it into their agreements of purchase and sale. He noted that price increases were a common thing with respect to construction and servicing costs and that DC’s were simply another factor affecting such a moving target. In closing, he expressed support for staff’s recommendation and suggested it was the only way for business to proceed.

Councillor Bloess requested clarification with respect to the financial impact. Mr. Karam indicated there were approximately 4,000 units in the area served by the drainage facility, owned by five different developers, each of which owned approximately 15% to 25% of the total number of units. If shared equally, the cost of the facility would be $2,125.00 per unit. However, because Minto has already pulled its building permits at $500.00 and Urbandale has already pulled 200 of its building permits at $500.00, the balance of the units will each have to share a larger portion of the cost of the facility. Therefore, he suggested that to grant Urbandale’s request for an exemption would only compound the inequity. Furthermore, he submitted that further policy development was needed to ensure inequities did not happen in the future with front-ending agreements. He indicated the reason development charges were so low initially was because the facility was phased, and the initial charge only factored in the first phase of construction. He re-iterated the financial inequities and maintained that the implications were significant for future home buyers in the area.

Councillor El-Chantiry wondered if it would be beneficial to defer consideration of this item in order to allow additional time to resolve the issues. Mr. Karam maintained that this would only serve to give developers additional time to pull building permits at the lower development charge rate, thereby compounding the problem.

Councillor McRae requested clarification on the speaker’s references to an over-riding policy problem irrespective of this particular situation. Mr. Karam suggested it was not as much an over-riding policy problem as it was an evolving policy. He referenced page 262 of the agenda, which states that anyone who applies for a permit has to pay his/her fair share of the front-ending. In this case, Urbandale still has 600 units to go, but will apply for a permit for which they will only pay their individual charge of $2,700.00, and not their $1 million share, because of the lack of a formal policy.

Councillor McRae noted that both sides were arguing equity and fairness and, irrespective of the plan before Committee, she asked staff to comment on the broader policy issue, as referenced by Mr. Karam. Mr. Morrison acknowledged that Mr. Karam had raised some valid issues. He maintained that anytime there are amendments to the DC By-law, unfortunate situations might arise, particularly when the rate is increased. He confirmed that if the lands to the East of Eagleson Road were allowed to continue with a development charge of $550.00 per unit, the shortfall would have to be made up by being added onto the other areas as they come on-stream. He recalled other situations where DC’s had increased by approximately $1,700.00. In particular, he noted that in Cardinal Creek, the cost of the facility had gone from approximately $8 million to about $18 million because of the scope of the work and other factors such as development patterns.

Responding to questions from Councillor Feltmate, Mr. Karam explained that front-ending agreements allow development to proceed because the City does not have the money to fund needed improvements.

Councillor Feltmate concluded the benefit to developers was that they could move forward more quickly.

Councillor Brooks referenced Mr. Morrison’s comment about a previous project being estimated at $8 million and then actually costing $18 million and he suggested that perhaps there was something wrong with the way the City was doing business. He also had concerns with the way business was being done, though he gave credit to Minto and others who came in early and benefited from the $500.00 DC rate. However, he questioned how Minto and Urbandale (initially) were able to get in “under the line”. He also asked if all developers in the area had been notified of the proposed change and that it would be considered by the Corporate Services and Economic Development Committee (CSEDC) on this date. Mr. Morrison advised that the DC By-law required that amendments be advertised once, 20 days in advance of a meeting. He reported that in this case, staff had advertised twice in Le Droit and in The Ottawa Citizen.

With respect to why Minto and Urbandale were able to get in “under the line”, Mr. Karam suggested it was a question of people recognizing a bargain and being astute. He suggested if someone had told him last year that he could pre-pay all his development charges at a rate of $500.00 per unit, he would have willingly done so, had be been able to do so at the time.

Councillor Brooks wondered, should Committee and Council approve this item, and should it result in a challenge at the Ontario Municipal Board (OMB) whether the City Solicitor could give members some sense of what could be expected. Mr. M.R. O’Connor, City Solicitor, advised that he could not respond at present, although he advised that he would be pleased to do so prior to Council, during an In Camera session.

Responding to Councillor Brooks’ request to comment on Councillor Hume’s earlier comments, Mr. O’Connor believed Councillor Hume had been correct in his assumptions, although he advised he would confirm this prior to the Council meeting.

Responding to questions from Councillor Feltmate about when Minto had withdrawn its building permits, Mr. Morrison said he could not respond with certainty, but he believed Minto had done so around the time the new DC By-law was coming into effect. He advised that, if there was not a front-ending agreement in place, the developer would not be able to proceed with development and the DC would have to be adjusted to reflect the costs incurred. Urbandale would continue building its houses at the current rate and, once the new charge came in, further building permits would reflect the new rate.

Councillor Feltmate recalled that in 2004, when the DC By-law was being developed, people knew there was a problem in this area. Mr. Morrison explained that when the OP designated the area as Enterprise Area, it allowed more flexibility in terms of what type of development could take place. Therefore, staff had to wait to see what landowners were going to submit in terms of development plans.

Councillor Feltmate stated it was difficult to understand how there could be such a difference in two years when the biggest change seems to be going from a designation of commercial to one of residential, and with staff previously stating such a change would result in only a minor adjustment. Mr. Morrison re-iterated that in 1993, Kanata had estimated the facility would cost $6.5 million to construct. He noted that the intervening 13 years had seen considerable increases in the costs of construction, construction materials and land purchase. With respect to 2004, the only explanation he could provide was that, because of the change introduced by the new Official Plan, staff had to wait until plans were submitted in order to be able to assess potential impacts.

Knowing that costs had increased greatly since 1993 and that the rate in the area was significantly lower than in other areas across the City, Councillor Feltmate wondered why, at minimum, there was not an inflationary increase applied in 2004 when the DC was reviewed. Mr. Morrison could not answer this, but he explained that the costs identified in the report were not only associated with the construction of Phase 2 but that it also included outstanding costs associated with Phase 1 as well as the cost of adding storm sewers.

Councillor Feltmate indicated that although this facility was in her ward, because of confusion surrounding the new ward boundaries, she was only circulated a copy of the report late in the process. She referenced an earlier suggestion of deferring the matter to a subsequent meeting of the CSEDC and an earlier delegation’s contention that such a deferral would only compound the problem. Therefore, she asked whether the City could put a hold on the issuance of any new building permits for the deferral period. Mr. O’Connor indicated he did not believe such conditions could be imposed.

Councillor McRae felt it would have been patently unreasonable to expect staff to meet with each developer individually and she advised that she was prepared to vote in support of the report recommendations. She referenced page 259 of the agenda and Mr. Karam’s earlier comments with respect to a group of builders “acting as the bank” and with respect to their hands being tied. Mr. Morrison clarified that the purpose of a front ending agreement was to allow the developer to use his money to construct the facility. The agreement then guaranteed that the City would pay them back as the development charges were collected. With respect to their hands being tied, he submitted that without a front-ending agreement, developers probably could not proceed because the City was not in a financial position to construct such facilities.

Councillor Wilkinson noted that many issues had been raised during this discussion and she asked staff to look at the various scenarios and report back on their implications of a DC increase; i.e., if an agreement of purchase and sale has been signed, if a building permit has been pulled, etc. The City Solicitor indicated Legal Services staff would work with Mr. Morrison’s group to provide information prior to this report rising to Council.

The Committee then voted on and approved the report recommendations as presented.

That the Corporate Services and Economic Development Committee recommend Council:

CARRIED

Project Costs

Sub Total

BACKGROUND STUDY UPDATE

SEPTEMBER 18, 2006

MONAHAN DRAIN

BY-LAW 2004-307

Project Description

Monahan Drain, Charge Area W-1

Relevant Studies/ By-laws

Other Approvals