MONAHAN DRAIN STORMWATER DEVELOPMENT CHARGE

REDEVANCES D’AMÉNAGEMENT POUR GESTION DES EAUX PLUVIALES – DRAIN MONAHAN

Committee recommendationS

That Council:

1. Endorse the changes to By-law 2007-66 set forth in this report; and

2. Direct staff to prepare and submit to Committee and Council a revised background study incorporating the revised residential and non-residential growth forecasts.

RecommandationS du Comité

Que le Conseil :

1. approuve les modifications au Règlement 2007-66 énoncées dans le présent rapport; et

2. donne instruction au personnel de produire et de soumettre au Comité et au Conseil une étude révisée tenant compte de la modification des prévisions de développement résidentiel et non résidentiel.

Documentation

1. Deputy City Manager of Planning, Transit and the Environment and City Solicitor’s report, dated 15 January 2008 (ACS2008-CMR-LEG-0003).

Report to/Rapport au :

Planning and Environment Committee

Comité de l'urbanisme et de l'environnement

and / et

Council/ Conseil

15 January 2008 / le 15 janvier 2008

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

Directrice municipale adjointe,

Planning, Transit and the Environment/

Urbanisme, Transport en commun et Environnement

and / et

Submitted by/Soumis par : M. Rick O'Connor, City Solicitor, Legal Services/

M. Rick O'Connor, Chef du contentieux, Direction des services juridiques

Contact Person/Personne ressource : Timothy C. Marc/Timothy C. Marc,

Senior Legal Counsel/Conseiller juridique principal

Legal Services/Services juridiques

(613) 580-2424 x 21444, Timothy.Marc@ottawa.ca

Kanata South (23)

Ref N°: ACS2008-CMR-LEG-0003

SUBJECT:	MONAHAN DRAIN STORMWATER DEVELOPMENT CHARGE
OBJET :	REDEVANCES D’AMÉNAGEMENT POUR GESTION DES EAUX PLUVIALES – DRAIN MONAHAN

REPORT RECOMMENDATIONS

That Planning and Environment Committee recommend Council:

1. Endorse the changes to By-law 2007-66 set forth in this report; and

2. Direct staff to prepare and submit to Committee and Council a revised background study incorporating the revised residential and non-residential growth forecasts.

RECOMMANDATIONS DU RAPPORT

Que le Comité de l’urbanisme et de l’environnement recommande au Conseil :

1. d’approuver les modifications au Règlement 2007-66 énoncées dans le présent rapport; et

2. de donner instruction au personnel de produire et de soumettre au Comité et au Conseil une étude révisée tenant compte de la modification des prévisions de développement résidentiel et non résidentiel.

BACKGROUND

On 14 February 2007, City Council approved an amendment to the Monahan Drain stormwater development charge (see ACS2007-PTE-APR-0002). From the prior by-law, the amendment resulted in the following increases (the rates from prior to the 2004 by-laws are also shown).

	Post-2007 Amendment	Pre-2007 Amendment	Pre-July 14, 2004
Non-Residential (Per Square Foot)	$1.24	$0.46	$0.53
Singles	$2373.00	$584.00	$1,579
Multiples	$1895.00	$459.00	$1,164
Apartments	$842.00	$203.00	Two bedroom -$852 One bedroom -$541

The amending by-law, By-law 2007-66, was appealed to the Ontario Municipal Board by Urbandale Corporation and Cavanagh Construction. Claridge Homes, another developer in the area, has been granted party status in the appeals. Urbandale Corporation has a registered subdivision within the drainage area and advanced the position that it should not be subject to the increased charge. Both Urbandale and Cavanagh raised concerns that past and future expenses and revenues had not been properly addressed in the revised background study.

DISCUSSION

STORMWATER DEVELOPMENT CHARGE AREAS-POLICY

In July 2004, Council approved a different approach to recovering the cost of stormwater ponds from that taken to recover other growth-related costs. The cost of other growth-related capital costs were recovered through one by-law with a combination of attributing such costs on a City-wide or to inside the greenbelt, outside the greenbelt and rural areas. However, on July 14, 2004, an area specific approach was taken with respect to stormwater ponds. The Stormwater Development Charge Background Study, as approved by Council, contained the following principles:

· The system requirements have been described and costed, with timing estimated.

· These requirements have been clustered into defined DC recovery areas which are small enough to reflect related requirements, but large enough to make administration of the cost recovery system workable.

Consistent with the above principles, the approximately 34 stormwater ponds and similar facilities were divided into 17 area specific by-laws, with 10 of those by-laws covering more than one pond for a total of 29 of the ponds and facilities. Sharing of the costs of these ponds and facilities within these 10 by-laws helped to ensure that developers within close geographical proximity bore the same cost with respect to stormwater facilities.

At the time of the enactment of the 17 stormwater development charge by-laws in 2004, only one appeal challenged the manner in which the City had grouped stormwater ponds together. By-law 2004-305 provided for a drainage area in south Nepean that includes two ponds with different drainage areas but subject to the payment of the same development charge. Minto Developments Inc. appealed the by-law to the Board and argued that different charges should apply. On February 3, 2006, the Board dismissed the appeal, stating:

The Board agrees with the submissions by counsel for the City that the decision by City Council to create area-specific development charge by-laws that combine different drainage areas based on the stated objectives referred to earlier in this decision is a matter of policy, which the Board should not easily interfere with.

While it was suggested by the appellants that the City should consider two by-laws for the Monahan Drainage area, the above decision of the Ontario Municipal Board supports the policy approach of a single by-law.

RESIDENTIAL-NON-RESIDENTIAL SPLIT

An initial step in attributing growth-related capital costs such as stormwater ponds is to divide the cost between residential and non-residential growth. The background study supporting the 2007 amendment divided the cost between residential and non-residential areas on the basis of a 84%/16% split. Further work that has been done by both staff and the consultants for Cavanagh has identified that a revision to this split is necessary to properly account for the non-residential potential in the drainage area. Employing City growth forecasts, the split for development with the drainage area on the west side of Eagleson Road and the undeveloped land north of Hope Side Road is 52%(residential)-48%(non-residential).

The result of this revision will be a higher charge for the non-residential uses. The Development Charges Act does not permit the Ontario Municipal Board on an appeal to increase the amount of a charge, the Board only has the authority to confirm or reduce the charge enacted by Council. As a result, in order to implement this change a new background study will have to be completed, a public hearing under the Act held and a new amending by-law enacted. It is anticipated that this will occur in spring, 2008.

TRANSITIONAL CHARGE

Urbandale has advanced the argument that, as much of their land holdings are subject to registered plans containing lots for which agreements of purchase and sale have been signed, that they should not be subject to the increased rate. It is the opinion of City staff that there is no legal entitlement to be exempted from a higher charge where such has been justified by a background study completed pursuant to the Development Charges Act.

However, the City and its predecessor municipalities have in the past recognized transitional provisions where development approvals were in place.

A possible expectation in early 2004 may have been that the Monahan Drain Stormwater Development Charge would have continued with its then present rate subject to annual indexing in accordance with the Development Charges Act. If such an approach had occurred, the residential rates would have been as follows:

	2004	Indexed to April 1, 2005	Indexed to April 1, 2006	Indexed to April 1, 2007
Singles	$1,579	$1,618	$1,701	$1,801
Multiples	$1,164	$1,179	$1,239	$1,312
Apartments (Two Bedroom)	$852	$863	$907	$958

While staff are of the view that there is no legal obligation to address Urbandale’s concerns, given that transitional measures have been approved in the past, a reasonable approach would be to amend By-law 2007-66 to impose the rates in effect prior to the comprehensive development charge review in 2004, subject to the subsequent annual indexing. The lands that will be subject to this lower charge are shown as Area “A” on Document 1.

With respect to apartments, the Monahan Drain Stormwater Development Charge By-law only provides for one apartment rate. Given that many of the apartments are stacked townhomes with contain two or more bedrooms, it is the view of staff that the appropriate rate to carry forward is the two bedroom rate. However, because the Ontario Municipal Board cannot increase the amount of the charge, the rate to be sought will be the rate in the by-law as enacted: $842 per apartment. This rate is also subject to indexing as of 1 April 2007 and thus for an apartment unit being constructed today the stormwater development charge would be $892.

For the balance of the lands within the drainage area, (Area “B” on Document 1) the residential rates imposed by By-law 2007-66 will remain in place. This will assist in ensuring that the developers who are constructing and front-ending the stormwater facilities west of Eagleson Road will be able to recoup the monies that they have expended in that regard.

CONSULTATION

Staff have met on several occasions with the representatives of the parties to the appeals to the By-law (Urbandale, Claridge Homes and Cavanagh Construction). The appellants and Claridge have indicated that they will support the approach outlined in this report.

FINANCIAL IMPLICATIONS

Subject to the two comments below, the total costs attributable to the residential lands in the drainage area are estimated to be $5.497 million. The development charges recommended by this report are estimated to result in a revenue of $6.213 million or $716,000 more than the estimated costs.

Land was expropriated in 1996 by the former City of Kanata for an earlier phase of the stormwater facility. It appears that the landowner chose not to cash the cheque provided to him for compensation. This is an outstanding liability to the City.

Furthermore, the remaining debentures issued for the past construction of the stormwater facility mature in 2011. To the extent that not all of the development in the drainage area has occurred by then, there will be further carrying costs incurred by the City not accounted for in the estimate of cost above.

SUPPORTING DOCUMENTATION

Document 1 – Map of Monahan Drain Stormwater Drainage Area.

DISPOSITION

Legal Services will seek the approval of the Ontario Municipal Board for the revised residential stormwater development charges for Area A. As part of the ongoing proceedings for the appeals to By-law 2007-66, a motion date has been set aside for 5 February 2008. Should Council to adopt this report on 23 January 2008, this would enable Legal Services to seek a decision from the Board at that time.

Planning, Transit and the Environment will bring forward a background study and staff report to revise the stormwater development charges for non-residential development within the drainage area.