September 28, 1999

To:Policy and Finance Committee

From:Chief Financial Officer and Treasurer

Acting Commissioner of Urban Planning and Development Services

Commissioner of Works and Emergency Services

Subject:Storm Water Management Facilities Funding Options

 Purpose:

To discuss the available funding options for off-site storm water management facilities arising from new growth.

Financial Implications:

There are no immediate financial implications arising from this report.

Recommendations:

That this report be received for information.

Council Reference:

At its meeting held on July 27, 28, 29 and 30, 1999, City Council amended and adopted Clause No. 1 of Report No. 4 of the Policy and Finance Committee, related to the Development Charge By-law. In doing so, City Council enacted a new City-wide Development Charges by-law and further directed that the Chief Financial Officer and Treasurer, the Acting Commissioner of Urban Planning and Development Services and the Commissioner of Works and Emergency Services be requested to submit a report on contribution mechanisms, including possible conditions of development approval, that ensure adequate funding of storm water quality controls and treatments to address quality impacts caused by new development or redevelopment, where implementing controls, partially or completely, on individual sites, are not feasible.

Comments:

The foregoing request refers to funding for off-site storm water treatment and control measures to address storm water runoff quality impacts. The planning approval processes for development in which off-site storm water facilities might be considered include plan of subdivision, severance, official plan amendment, zoning by-law amendment, and site plan approval. The City Solicitor was consulted in the preparation of this report.

Storm water facilities for new growth and provided off-site by the municipality represent a service which can be, and is most appropriately, funded through development charges. However, the provisions of the Development Charges Act apply equally to storm water services as to other services addressed in the Development Charge By-law, requiring, among other things, that a background study be carried out to document the increase in the need for the service attributable to anticipated development, and that a 10-year forecast of capital projects and related costs necessary to provide the increased service be approved.

Consideration was given by staff to including a site-specific formula for a storm water charge in the Development Charge By-law (By-law 476-1999). However, the By-law as adopted does not provide for such a charge. The City is currently undertaking a study to produce a Wet Weather Flow Management Master Plan, which will provide a framework to address storm water runoff quality issues. The necessary 10-year forecast of capital facilities to provide the storm water management service for new growth could then be derived and considered by City Council. Once the Master Plan and related capital program is completed, a development charge for storm water facilities can be calculated and the Development Charge By-law may be amended to include such a charge.

Apart from development charges, the legislative authority for imposing conditions of approval on development applications to provide such funding for off-site storm water facilities is limited, and for the majority of development applications is non-existent. The plan of subdivision approval process does provide the municipality with the authority for requiring on-site storm water management facilities and for imposing conditions requiring funding for, or provision of, off-site facilities. Similar authority exists for the severance, or consent, approval process. The imposition of conditions on the approval of a plan of subdivision or a severance to require cash-in-lieu of storm water facilities is defensible if the conditions are reasonable, justified and relevant to the proposed development. The amount charged to the development must be related to the benefit gained by the development. However, a common difficulty in dealing with off-site facilities on an ad hoc basis lies in determining what portion of facilities or costs are attributable to the specific development. The City Solicitor is currently developing provisions regarding storm water management for inclusion in a standard subdivision agreement.

Applications to amend the Official Plan or Zoning By-law may be refused if adequate services are not available for the development, but a specific legislative mechanism to impose conditions requiring the developer to provide or fund off-site services does not exist. A developer may elect in certain circumstances that it is in the development's interests to make a financial contribution toward necessary off-site services, and do so voluntarily. Such contributions can be secured in development or collateral agreements, or could be secured in a Section 37 agreement if such agreement was contemplated as a result of an increase in density in exchange for public benefits. Storm water management facilities comprise an essential hard service rather than a "public benefit" to be provided in exchange for increased height and/or density, however, if secured in a Section 37 agreement, would be incidental to other matters to be secured.

The majority of developments are approved through the Site Plan Approval process, in "as-of-right" situations where no amendments to the Official Plan and Zoning By-law, and no plan of subdivision, are required. In the Site Plan Approval process, storm water management plans can be requested for the proposed development, but again such plans deal primarily with on-site drainage facilities, and not usually with on-site quality control facilities. The City Solicitor has advised that on-site storm water quality as well as quantity control facilities can legally be addressed in the Site Plan Approval process. However, on-site quality control facilities are not often physically feasible in the Site Plan Approval process. The City Solicitor further advises that there is no legislative authority for imposing conditions requiring developer funding for, or provision of, off-site storm water facilities in the Site Plan Approval process.

As with the Official Plan and Zoning By-law amendment process, it is possible in the Site Plan Approval process, on a site-by-site basis where funding for off-site facilities is needed, to reach a negotiated agreement with the developer and to include relevant conditions in an agreement related to the approval. However, such conditions might be thrown out if challenged in a planning tribunal or in the courts, and the City should not establish general policies where there is no authority in legislation for such policies.

Conclusions:

Apart from the plan of subdivision and severance (consent) approval processes, there are no specific contribution mechanisms available in legislation and which are generally applicable to the majority of development applications to address funding requirements for off-site storm water management facilities. For other planning approval processes, negotiated agreements which are not explicitly authorized in legislation can be reached on a case-by-case basis, but cannot be required by a City policy, since such a policy would have no legislative basis. Development charges remain the best tool to consistently address the funding of off-site storm water management facilities. In order to implement the relevant development charge, the necessary Wet Weather Flow Management Master Plan and capital forecasts must first be completed and the amount of the charge calculated. The completion of the Master Plan is estimated to be a two-year process. City Council could then adopt an amendment to the existing by-law to impose the charge for storm water management facilities on new development.

Until such time as the Wet Weather Flow Master Plan is complete and the Development Charge By-law is amended, staff will continue to utilize all mechanisms legally available to address funding or provision of off-site storm water facilities in the development approval process. Staff from Works and Emergency Services and the Finance Department are working in concert to produce the information necessary to establish a development charge for storm water facilities.

Contact Names:

Peter Langdon, Urban Planning and Development Services, 392-7617

Joe Farag, Finance Department, 392-8108

Michael Price, Works and Emergency Services, 392-8200

     Wanda LiczykJames Ridge

Chief Financial Officer and TreasurerActing Commissioner

Urban Planning and Development Services

    Barry Gutteridge

Commissioner

Works and Emergency Services