June 14, 1999

To:Policy and Finance Committee

From:Virginia West, Commissioner, Urban Planning & Development Services

Wanda Liczyk, Chief Financial Officer & Treasurer

H.W.O. Doyle, City Solicitor

Subject:Claims for Credit pursuant to the Development Charges Act

Purpose:

To obtain Council approval of staff recommendations with respect to claims received for Section 14 credits pursuant to the Development Charges Act.

Funding Sources, Financial Implications and Impact Statement:

Not applicable

Recommendations:

1. That Council endorse the recommended decisions presented in this report with respect to the section 14 credit applications.
2. That the applicants for credits be advised in writing of Council's decision prior to September 1, 1999.
3. That where a credit is being recognized, the applicant be advised that the amount of the credit will not exceed the amount of the development charge to be otherwise paid.

Council Reference/Background/History:

The City is currently considering enacting a new development charge by-law. The new by-law will be City-wide in application and enacted pursuant to the new Development Charges Act which received Royal Assent on December 8, 1997. Regulations pursuant to the new Act set out a procedure with respect to credits given or required to be given under section 14 of the previous Development Charges Act. The regulations serve to preserve the entitlement of an owner to section 14 credits pursuant to the old Act for payments made pursuant to agreements entered into by the owner prior to the enactment of the new development charge by-law. The intention is that the owner should not be required to pay twice. For example, an owner may have previously paid for services pursuant to an agreement and those services are now included in the development charge by-law. The owner should not pay a second time for the same service pursuant to the development charge by-law but, should receive a credit for the payment made against any future development charges.

The regulations require applicants to apply for the credit by March 1, 1999 and the municipality is required to give written notice by September 1, 1999 whether it agrees to recognize the credit or refuses to recognize the credit. Where the City refuses to recognize the credit application, the applicant may appeal to the Ontario Municipal Board within 30 days of receiving notice of the City's refusal.

The City is in receipt of twenty-four credit applications submitted by the March 1, 1999 deadline. Staff from the Planning, Finance and Legal Departments reviewed the applications and reviewed the agreements on which the application for credit was based. The applications, together with staff's recommended decisions are set out below.

There are five applications for credits listed below where the agreement entered into by the former municipality with the owner specifically exempted the development from any future development charges. The City must recognize this contractual obligation. One application (West Hill Redevelopment Company Limited) should be exempted based on a decision made in 1988 by the Council of the former City of Scarborough which permitted owners to prepay their levies on development applications in return for an exemption from future development charges. This commitment should also be recognized. There are a number of applications where staff recommend that the credit request should be recognized in accordance with the terms of agreements previously entered into. The recognition of the credit will prevent a duplication of payments. It should be noted however, that the amount of the credit cannot exceed the total development charge which will otherwise be payable pursuant to the new by-law.

There are also a number of applications which staff recommend that the credit request not be recognized. In large part, these applications relate to developments which were the subject of agreements pursuant to section 37 of the Planning Act. Section 37 is applied only where an owner seeks an increase in the height and/or density otherwise permitted in the zoning by-law. The value of the public benefits contribution is commonly proportional to the value of the increased density. In effect, there is, as is required by the legislation, an exchange between the developer and the City, of extra height or density for the specified facilities or benefits. Section 37 matters are negotiated as a package of benefits in return for the increased height or density. Development which complies with the Zoning By-law does not trigger a section 37 contribution. Any cash contributions received through section 37 for a particular project are deducted from the capital cost of that project in the Background Study in accordance with the provisions of the Act. Therefore, a service or facility project completely funded or provided through section 37 and other grants, subsidies or contributions would not be included in the project list on which the development charge calculation was based or, if only partly funded by a contribution through section 37, would be discounted in the calculation of the development charge to the extent of that financial contribution.

The credit applications are summarized as follows:

Conclusions:

Staff are satisfied that the recommended decisions are appropriate and should be approved by Council. The applicant has the opportunity to appeal Council's refusal to recognize a credit to the Ontario Municipal Board.

Contact Name:

Anna Kinastowski, DirectorBarbara Leonhardt, DirectorJoe Farag, Director Planning & Development LawPolicy & ResearchDevelopment, Policy & Research

Legal Services DivisionCity Planning DivisionFinance Department

Tel: (416) 392-0080Tel: (416) 392-8148Tel: (416) 392-8108

Fax: (416) 397-4420Fax: (416) 392-3821Fax: (416) 397-0835

H.W.O. DoyleVirginia WestWanda Liczyk

City SolicitorCommissioner, Chief Financial Officer

Legal ServicesUrban Planning && Treasurer

Development ServicesFinance Department

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