IN COMPLETING DEVELOPMENT related WORKS
RECOMMANDATION DU RAPPORT
On November 9, 2005 City Council passed a motion (see Document 1) seeking the preparation of a staff report to address concerns raised about some developers not completing works in a timely fashion. The main works of concern listed were active and passive parks, tot lots, road works and sidewalks in developing neighbourhoods.
The Council motion directed staff to investigate measures that would “‘give teeth’ and strengthen the ability of the City to ensure land developers and builders deliver on commitments” and further that such measures include, but not be limited to:
1. Denying any further planning approvals,
2. Denying early servicing agreements and conditional permits,
3. Denying issuance of building permits,
4. Establishing charge back costs or penalty payments associated with additional staff time required to ensure developers are meeting their obligations.
Though many of the expectations between pre-amalgamation and post-amalgamation agreements remain consistent, there are some works that are no longer provided in the same manner. These works pertain mostly to the provision of parks and related works. For example, in some of the previous municipalities, it was a requirement, through development agreements, that developers construct the required parks and related works to municipal standards. Typically, the former municipality retained securities in order to ensure that these works were completed as expected.
The new City of Ottawa no longer requires developers to build our parks; rather the developer may be required to bring the park to an acceptable standard, following which, the City takes on the design and construction of the park, subject to Council approval of Development Charge funding to do so. Therefore, in the current environment, the onus is on the City to deliver the final park product. It should be noted, however, that there are circumstances that can delay or impede the City's ability to proceed with the construction of park facilities, such as road frontage may not have arrived to the park facility, servicing may not yet be available, etc. Notwithstanding the foregoing, there are exceptions to when the City is responsible for park related works, especially when it comes to providing some of the off-site walkways or pathway systems, as well as some of the more passive pathway systems, such as those found along ravine systems and stream corridors. Pathway systems are still typically required as a condition of planning approval and are constructed by the developer. The City ensures their completion through the provision of securities in the development agreement. There is a general feeling, through consultation with the development industry, that there is a need to complete an internal and external review of the delivery of parks, including but not limited to funding, development charges, delivery of construction and timing.
It should be noted that for the most part, there has not been, nor is there currently any specified completion timelines for park related works, as the need for these works is dependant upon the rate of growth which can vary throughout the life of an agreement or a combination of agreements.
Though varied in expected timelines for completion, most former municipalities required that the developer provide securities to guarantee the construction of infrastructure works such as roads, sewers, watermains, sidewalks on public roadways, etc. Should a developer fail to complete the required works within specified timelines, the City could call upon the Letter of Credit to complete the works. This, for the most part, has remained unchanged with the new City of Ottawa. There have been instances where developers were slow to complete works such as lot grading, sidewalks or roadway modifications to name a few and securities were used by former municipalities and the new City to clean up incomplete and deficient works.
It is worth noting that the current City development agreements and most of the former municipalities do clearly specify expected completion times for major works. The major works that have specified timelines include underground services, road works, streetlights, walkways and pathways, fencing, lot grading, noise barriers, etc. External roadway modifications are not specified in the body of these agreements, because they are largely dependant on phasing and ultimate build out of the lands. Therefore, subject to the satisfactory completion of a traffic impact study, the City would include “special conditions” in the development agreement that would outline the specific expectations for the completion of roadway modifications. For example, certain roadway modifications may not be required until a certain threshold of units or floor space has been built out. It is more fiscally responsible, from an operations and maintenance funding point of view, to not have the developer construct these roadway modifications until such time as the warrants are met for the works, thereby keeping both on-going operational costs, as well as long term life cycle costs to a minimum for the City.
It should also be noted that the subdivision agreement allows for extensions of the specified completion timelines, subject to the approval of the Director, Infrastructure Services, for weather related issues. For example in the event of an early winter, it may not be possible to complete road works or concrete works for items such as curbs and sidewalks. It is also possible as seen this past construction season wherein supply of materials could be delayed due to acts of God, as was the case during Hurricane Katrina when it was difficult to obtain supplies from the region affected by the hurricane. Other works stoppages such as last year’s Hydro strike also delayed some projects as well.
Staff has investigated the four measures proposed as mechanisms to ensure greater compliance as contained in the November 9, 2005 Council motion. We have arrived at the following conclusions.
Deny Any Further Planning Approvals
The City cannot deny or even delay planning applications in order to seek compliance on a separate planning file. The City must respond to, and process each planning application received pursuant to the provisions of the Planning Act, and we can only deny such applications for valid reasons associated with that specific planning application in hand. Any denials would always be subject to appeal with the Ontario Municipal Board.
Denying Early Servicing Agreements or Conditional Building Permits
Early Servicing Agreements are issued at the City's discretion. There is no obligation on behalf of the City to permit Early Servicing to occur in advance of the preparation of a development agreement. The City could therefore deny Early Servicing privileges.
Conditional building permits are issued at the discretion of the Chief Building Official based on the Official’s assessment of whether certain conditions set out in the Building Code have been met or not. The discretionary authority must be exercised with reasonableness and thus while the management, by the permit holder, of other permits issued may be considered by the Official in determining whether a conditional building permit may be issued, the management of site works as per development agreements may not be considered. Thus, denial of conditional building permits is not a recommended tool for exacting compliance with a development agreement.
Denying the Issuance of Building Permits
The Building Code Act stipulates that the Chief Building Official shall issue a permit unless the proposed construction, if constructed, will not meet the standards set out in the Building Code or any of the applicable laws. There is no discretion to refuse to issue a permit due to a lack of compliance with conditions set out in development agreements or pursuant to the planning approvals. The appropriate means for dealing with non-compliance is through enforcement of the applicable provisions of the development agreement.
Establishing Charge Back Costs or Penalties
The City’s current development agreements allow the City to assess any reasonable charges associated with the City having to complete developer works in the case of a default; however, these costs can only be on a cost recovery basis, which could include costs related to enforcement of the agreement but not costs that are punitive in nature.
Having noted the above, there are measures to accelerate completion of works, or seek greater compliance. Staff either are currently or will implement the following actions.
1. Aggressive Monitoring and Use of Securities (Current Practice Modified)
It is believed that the most effective method of guaranteeing compliance for works within timeframes identified in development agreements is to ensure that full securities are collected, that works are aggressively monitored for compliance and that securities are utilized whenever a developer is in default of completing the works. Public Works and Services inspection staff have, in the past two years, taken a more aggressive approach to ensure that the works are being completed, and in several instances have called upon securities to complete outstanding works. It should be noted that many of the sites that required more aggressive approaches have tended to be legacy files.
One factor that can greatly delay the speedy implementation of these works, should the City undertake them is the current requirement of the City’s Purchasing By-law. An amendment to the Purchasing By-law that grants Delegated Authority to the Director, Infrastructure Services to bypass the normal procedures is recommended in order to award a contract would be effective in speeding up the City’s ability to respond quickly when needed to complete works. Often the need for the City to undertake the work of developers comes early in the Fall and by the time normal purchasing procedures are carried out it becomes too late in the year (due to weather conditions) to complete the work. Permitting the Director, Infrastructure Services to single source the work, and most often it would be best to use the developer's contractor, greatly increases the turn-around time for the City to respond once the securities have been obtained. The Financial Services Branch is currently proposing to bring recommended amendments to the Purchasing By-law forward to Corporate Services and Economic Development Committee in the very near future which will deal with this issue.
2. Adjust Completion Dates Where Early Servicing is Undertaken
For those developers who request Early Servicing, the City can stipulate that the commencement date, for the purposes of calculating specified completion dates of works, will be the date of the City’s issuance of a Commence Work Notification and not the registration date of the development agreement. Currently, the time to complete works is measured from the time of registration of the development agreement. For example, the current subdivision agreement requires, underground services such as sewers to be completed within 24 months of registration of a subdivision agreement. Measuring the time for completion from the Commence Work Notification stage at Early Servicing versus at registration of the agreement would accelerate the overall time for completion. Staff are currently reviewing the Standard Conditions for Subdivision and Site Plan Control Agreements with the development community and the time for completion conditions will be raised with the view to compressing the current completion date provisions.
3. Compress Completion Timing for Underground Services
Staff intends to amend development agreements by compressing some of the standard completion timelines. Compressing the completion timeline for underground services such as municipal watermains or sewers, by six months, would have a net effect in accelerating the overall completion dates equally. This combined with the foregoing action, will accelerate delivery of major infrastructure works. The industry may indicate that implementing this will result in increased costs.
4. Withhold Early Servicing
The Director of Planning and Infrastructure Approvals will withhold Early Servicing, from those developers who have been delinquent in completing required works pursuant to development agreements.
5. Internal/External Parks Delivery Review
The Deputy City Manager, Community and Protective Services will initiate an internal and external review of the delivery of parks and park related works, and report back to Planning and Environment Committee with recommendations on the delivery of parks. This will include consideration to establishing timelines and triggers for the delivery of parks and park facilities.
City staff has discussed these issues with the development industry via the Development Industry/City Steering Liaison Committee and the Engineering Sub-Committee. Staff continues to engage the industry on these and related issues on an on-going basis. There has been no further consultation.
Costs associated with a developer default and a need for the City to complete the works will be at no cost to the City since the developer securities will be used to complete the work and staff time will be recovered as an administrative charge under conditions of the development agreement. Any shortfall will be invoiced to the developer and a refusal to pay will be applied to the property taxes for the land.
The Director, Financial Services Branch will amend the Purchasing By-law in order to grant Delegated Authority to the Director, Infrastructure Services to by-pass the normal requirements for awarding contracts where works need to be completed expeditiously.
Moved by Councillor J. Stavinga
Seconded by Councillor P. Feltmate
WHEREAS there are longstanding concerns that public amenities and infrastructure, such as active and passive parks, tot lots, pathways, road works and sidewalks in developing neighbourhoods are not being completed in a timely manner or to the performance specifications required by the City of Ottawa;
AND WHEREAS the collection and hold back of securities appears to be an insufficient motivator to ensure land developers and builders are completing these works;
AND WHEREAS these same land developers and home builders continue to disregard or minimize the impact of these incomplete works on the quality of life and enjoyment of those homeowners who purchased homes in these subdivisions with the expectation that public amenities and infrastructure would be built in a reasonable time period;
AND WHEREAS these land developers and home builders are seeking from the City approvals for additional housing units and building permits for the development of new residential neighbourhoods, yet have not completed commitments within previously approved subdivisions;
AND WHEREAS similar concerns of incomplete and unsatisfactory works are also prevalent in the development of commercial and industrial projects across the City;
THEREFORE BE IT RESOLVED that City staff report to the appropriate Standing Committee and City Council in early January 2006 on mechanisms that can be implemented to “give teeth” and strengthen the ability of the City to ensure land developers and builders deliver on commitments and performance specifications in existing subdivision and site plan agreements in a timely manner;
AND that such measures may include but not be limited to 1) denying any further planning approvals; 2) denying early servicing agreements or conditional permits; 3) denying the issuance of building permits; 4) establishing charge back costs or penalty payments associated with the additional staff time required to ensure developers are meeting their obligations.