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5. POLICY
STATEMENTS ON THE DISPOSAL OF ROAD ALLOWANCES Déclaration de principes sur la cession des emprises routières |
Committee Recommendation
That Council adopt the Policy Statements on the Disposal of Road
Allowances.
Recommandation du comité
Que le Conseil adopte la Déclaration de principes sur la cession des
emprises routières.
Documentation
1. Executive Director's report (Business
Transformation Services) dated 7 January 2008 (ACS2008-BTS-RPM-0003).
2. Extract of Draft Minute, 15 January 2008.
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
7 January 2008 / le 7
janvier 2008
Submitted by / Soumis par : Stephen A.
Finnamore, Executive Director / Directeur exécutif
Business
Transformation Services / Services de
transformation des activités
Contact Person/Personne ressource : Gordon
MacNair, Manager, Real Estate Services
Real Property Asset Management/Gestion des actifs des biens immobiliers
(613) 580-2424 x21217, Gordon.MacNair@ottawa.ca
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SUBJECT: |
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OBJET : |
Déclaration
de principes sur |
REPORT RECOMMENDATION
That the Corporate Services and Economic Development
Committee recommend Council adopt the Policy Statements on the Disposal of Road
Allowances.
RECOMMANDATION DU RAPPORT
Que le Comité des services organisationnels et
du développement économique recommande au Conseil d’adopter la Déclaration de
principes sur la cession des emprises routières.
BACKGROUND
In accordance with the City’s Policy on the Disposal of Real Property, surplus road allowances are currently recommended for disposal at market value. A number of concerns regarding this practice have been raised by the Ottawa Carleton Home Builders Association (OCHBA) through the development approval process and in discussions with City staff. The OCHBA requested that staff review the current policy and, where warranted, recommend changes to ensure that a consistent and fair approach is implemented. A “Road Allowance” is defined on the attached Appendix A.
DISCUSSION
A Task Force was established to undertake a review of current practices regarding the disposal of surplus road allowances. This review was co-ordinated by Real Property Asset Management and included Planning, Transit and the Environment and Legal Services staff. Numerous meetings have been held with OCHBA representatives to discuss the issues and significant consultation was undertaken with other Ontario municipalities to determine how they approach similar issues. In addition, at a meeting of the Ontario Association of Municipal Real Estate Administrators held in Ottawa during the spring of 2007, a presentation was made regarding the proposed Policy Statements in order to solicit feedback on how similar issues are addressed in other municipalities.
A number of factors were considered in the review of the City’s current processes regarding the disposal of road allowances including current policies, a Best Practices Survey of other Ontario Municipalities, case law, financial considerations, fairness and accountability (cost recovery).
The City’s Policy for the Disposal of Real Property establishes that real property declared surplus to the City’s requirements be disposed of at market value. This principal applies to the disposal of all City-owned properties, including road allowances and road widening requirements that are acquired by the City through the planning/subdivision process in accordance with the Planning Act and which might later be determined to be surplus to the City’s requirements and are closed in accordance with the Municipal Act.
Below is a listing of the road allowance issues that were the subject of this review process, followed by a recommended policy statement and the rationale in support of the policy statement.
1. Road Allowances.
Policy Statement: Where a road allowance is to be closed and conveyed to another party, or where a road allowance has been closed and is to be conveyed to another party, and where a part(s) of that road allowance will be constructed as a road, that part will be conveyed for $1.00, provided that the said part(s) will be dedicated back to the municipality for road purposes at no cost to the municipality. The requirement to dedicate back will be established in the Agreement of Purchase and Sale. The balance of the closed road will be sold at market value.
Rationale: When a Plan of Subdivision is created, roads are often proposed that overlap existing or closed road allowances. Should a subdivision plan identify a road allowance or a portion of a road allowance where a current road allowance exists or where a closed road allowance previously existed, that portion of the road allowance will be transferred at nominal consideration. The portion of existing or closed road allowances that is to be used as development land will be transferred at market value. This “road for road” concept is considered to be a fair approach in that the development community will not be required to acquire road allowance lands that are to be developed as roads and then dedicated to the City.
With a large amount of current development occurring in more rural areas where few subdivision plans have been registered, we are dealing with original township road allowances, many of which have never been used as travelled roads. As a result, this road for road issue has become more significant for the development community. In 2007, two road allowance disposal transactions were negotiated where a portion of the road allowance was identified for future road purposes on the subdivision plans (Disposal of Temporary Road ACS2007-BTS-RPM-0001 and Disposal of Renaud Road ACS2007-CRS-RPM-0011). In the reports to City Council recommending these disposals, it was identified that the developers were not being charged for the portions of the closed road allowances that were identified in their subdivision plans as future road allowances. These two transactions represented potential lost revenue to the City of approximately $160,000.
2. Road Widening.
Policy Statement: In the event that no bonus/concession is made with the developer in exchange for the widening, the Site Plan/Subdivision Agreement will stipulate that if the City does not require all or a portion of the road widening, it may transfer the land back at $1.00 to the developer or its successor in title. The purchaser will pay all costs including an administrative fee.
Rationale: As a condition of development approval, the City can require that land be dedicated for road widening to meet Official Plan requirements. There have been instances when an Official Plan Amendment will reduce or negate the widening requirement. In these instances, the City may, upon request, transfer the road-widening requirement back to the developer or its successor in title for $1.00 plus an administrative fee to cover the City’s costs associated with the transfer. Where a bonus or concession was made to the developer in exchange for the road widening, e.g. a reduced parking requirement, the transfer back to the developer will be at market value.
There have been two recent transactions where road-widening requirements were transferred back to the developers as the road-widening requirement was not needed (Sale of Land – Part of Guigues Street and Dalhousie Street ACS2007-CRS-RPM-0021 and Sale of Land – Part of Innes Road adjacent to 3843 Innes Road ACS2007-BTS-RPM-0022). In both cases, staff recommended the sales at market value in accordance with the Policy on the Disposal of Surplus Real Property, however Council approved the transfers for nominal consideration.
Council has approved nine road widening disposal reports since amalgamation resulting in average annual revenue of approximately $24,000.00 over this period.
3. Subdivision Blocks identified for future roads.
Policy Statement: Where Subdivision blocks are identified for future roads, and are deemed to be surplus at a later date, the land will be sold at market value.
Rationale: Subdivision blocks are sometimes reserved for future connections to adjacent development lands. The issue at hand is whether these subdivision blocks, if determined not to be required for a road connection, should be transferred back to the developer at nominal consideration.
Pending development of adjacent lands, the City assumes all liability for these subdivision blocks, i.e., grass cutting, etc., and does not generate any tax revenue from these blocks. As well, future development of adjacent lands may require an alternate connection and the sale of the subject block can be used by the City to offset the requirement to acquire an alternate connection.
A review of case law indicates that unless the original conveyance stipulates that the land will be transferred back if not required for the intended use, or that the land is being held in trust by the municipality for the intended use, there is no requirement for the municipality to transfer the land back. In other words, the municipality can sell the land at market value.
4.
Lands required
for roads from City-owned property.
Policy Statement: Arterial roads that have been identified in the
Official Plan or as part of a Council approved EA process, that are located on
city-owned land, will be dedicated by by-law and there will be no cost to the
developer. In all other instances
market value will be paid to the City.
Rationale: Where any portion of
an arterial road identified in the Official Plan is on City-owned property, the
City will dedicate the land as road allowance.
Where a subdivision plan identifies any other road requirements, i.e.,
collector roads and local roads, that are on City-owned property, the developer
will be required to pay market value for those road requirements. While arterial roads are considered to be of
utility to the City at large, other roads are considered to be for the direct
benefit of the subdivision. This
approach is considered fair and reasonable and consistent with the approach
used between developers when road requirements cross over between their
respective lands, i.e., they pay market value to each other for the road
requirements.
At this point it is difficult to estimate the potential loss of revenue
for the dedication of City-owned lands for Arterial roads. A portion of the Blackburn By-Pass
immediately east of Trim Road is located on City-owned land and the estimated
land value is $1.8M. It is proposed that this land would be dedicated as part
of the arterial road allowances. It should also be noted that this does not
happen on a frequent basis.
5.
City
contribution to Road Acquisition and Construction.
Policy Statement:
i)
If the adjacent
City-owned lands are being held for public purposes, i.e., storm water
management ponds, pumping stations, parks, the City will not cost participate.
ii) Where adjacent City-owned lands are to be
developed by the City for municipal buildings such as fire stations or for
similar purposes to private sector development, the City will negotiate a
proportionate cost sharing formula for land value and construction of the road,
which will be paid at time of development of the City lands, subject to
agreement on cost sharing.
Rationale: The City will only
participate in road acquisition and construction costs when the road provides a
benefit to the adjacent City property.
For example, the City will not contribute when the City property is used
as a storm water management pond or parkland.
However, when the City develops its land for municipal purposes such as
a fire station or a recreation complex, or where the City is acting in the same
capacity as a developer of City-owned land, a proportionate cost sharing
formula will be negotiated as part of the planning approval process.
Supporting
Information for Policy Statement
A best practices survey was conducted of other Ontario Municipalities to determine how they address the disposal of road allowances. The results of the survey demonstrated that market value is a prevailing principle across the province. However, several municipalities indicated that specific circumstances often determine the value associated with the disposal of a road allowance, for example if the land is being transferred back to the original owner or if the circumstances of the reconveyance are a condition of the planning approval where the road allowance was dedicated to the municipality. Issues associated with road allowance conveyance seem to be common to most municipalities.
A review of case law regarding the disposal of road allowances that are dedicated to the municipality through the planning/subdivision process supports the position that the municipality can dispose of the property for market value. However, in considering the disposition of land that was originally acquired through the planning process and is not required by the City for that purpose, or the use of City-owned property for a use that benefits the City at large, these Policy Statements represent a number of concessions that are intended to represent a fair and reasonable approach.
CONSULTATION
Several meetings have been held between City staff and the OCHBA to discuss these issues. As well, a best practices survey was conducted of several municipalities across Ontario to determine their practices. A presentation on the proposed Policy Statements was made to the Ontario Association of Municipal Real Estate Administrators to seek their input and experience with these issues.
FINANCIAL IMPLICATIONS
With the adoption of the recommended policies, future revenue losses will vary from year-to-year, as this will depend on future development applications.
Appendix A - Definition of a Road Allowance.
DISPOSITION
Following Council’s approval of this report, RPAM, Planning and Legal Services staff will implement this policy with development applications and road closures.
RPAM and
Legal Services Branch will prepare a by-law to implement the approved application
and processing fees.
APPENDIX
A
A road allowance is typically an elongated corridor of land that has been established for use as a public highway. Pursuant to Section 26 of the Municipal Act, 2001, the following are deemed public highways, unless they have been closed:
1. Highways that existed on December 31, 2002.
2. Highways established by by-law of a municipality on or after January 1, 2003.
3. Highways transferred to a municipality under the Public Transportation and Highway Improvement Act.
4. Road allowances made by the Crown surveyors that are located in municipalities. (These are mostly road allowances shown on township layouts, generally called "Concession Roads or Side Roads, but could also Colonization Roads, etc.).
5. All road allowances, highways, streets and lanes shown on a registered plan of subdivision.
Road allowances may be categorized as “open and travelled”, “open and untravelled”, and “closed and untravelled”. For the purpose of this report, Road Allowance will include all three categories.
POLICY
STATEMENTS ON THE DISPOSAL OF ROAD ALLOWANCES
Déclaration de principes sur la
cession des emprises routières
ACS2008-BTS-RPM-0003 city-wide / À l’Échelle de la ville
Mr. P. Dufresne, representative of the Greater Ottawa Home Builders’ Association, began by expressing his organization’s support for the policy. He noted one of the statements in the policy indicated that, when the City was acting as a developer of lands, it would engage upon the rules of standard practice within the industry. He supported this. However, he referenced a statement with respect to stormwater management ponds and indicated it was not standard practice, knowing that a road would be conveyed as part of the development approvals process for a dollar, for any developer to charge another adjacent developer for the land.
In response to a request for a staff comment on the delegation’s intervention, Mr. S. Finnamore, Executive Director of Business Transformation Services, suggested having staff make their presentation in order to provide some context.
Appearing before Committee on this item were Mr. G. MacNair, Manager of Real Estate Services, Mr. T. Marc, Senior Legal Counsel, Ms. K. Currie, Manager of Development Approvals East/South, Mr. G. Lindsay, Manager of Development Approvals West/Central and Mr. R. Phillips, Program Manager, Infrastructure Approvals.
Mr. MacNair spoke to a PowerPoint presentation in which he provided an overview of the report. A copy of his presentation is held on file with the City Clerk.
In addition, Mr. MacNair addressed the comments made by the public delegation, which pertained to policy statement 5. He outlined staff’s position; that if adjacent city-owned lands were being held for public purposes or for some type of infrastructure, such as stormwater management ponds or pumping stations, the City would not cost participate in terms of building that road and in addition, the City should receive market value for its land. He referenced a specific situation pertaining to the Leitrim CDP, which he believed was the reason for Mr. Dufresne’s submission. He showed a map of the area, pointing out the stormwater pond, City-owned land and adjacent parkland, and he indicated the developer wanted the City lands dedicated for $1. He expressed staff’s opposition to this, noting that the City did not intend to develop those lands but the developer would benefit because the stormwater management pond and parkland would serve the subdivion.
Councillor Wilkinson felt there was a bit of a discrepancy between policy statements four and 5. She suggested that if the City paid market value to developers for land needed for road construction, then it should pay itself under the same circumstances. She argued that the cost of the road construction included the cost of acquiring the land. Therefore, it would all be funded through Development Charges. Mr. Marc believed the City could do it, if that was Council’s wish; transfer funds from a Development Charge account to a Real Property account.
Councillor Wilkinson re-iterated her feeling that this was an inconsistency between policy statements four and five.
In order to clarify the intent, Mr. Kirkpatrick paraphrased the points being made and suggested this matter could be examined in the context of the next Development Charge review.
Responding to a question from Councillor El-Chantiry with respect to this policy and another pertaining to road allowances being used to access waterways, Mr. Marc indicated the Official Plan required that road allowances used for access to waterways be maintained by the City and he confirmed that the proposed policy would not surplant what was in the Official Plan.
That the Corporate Services and Economic Development
Committee recommend Council adopt the Policy Statements on the Disposal of Road
Allowances.
CARRIED