19

Eune 23,2009

CounciliBoard of Control City of London 300 Dufferin Avwue

London, Ow N a 4 L 9 P.O. BOX $035 I

Dear Board Wbem;

aocept this i c o r r e n m BE a ~ ~ r m a l request for w iea t ion regarding tke &ages to the rate for t h e m mmpnent of the nC By-law. Prewnttl;v the rate beh4 COWM fix ;9& aad Semi detached units is at $6,941 .OO, The rate proposed under the new Bybw is $3,2991.00. Et was our understanding that the Blue Ribbon panel was instituted b e a w of the back log of claims and the prognasively elongated payback periods which were ocnVring under the U W . To this end the reduction in the funding afthe WtaF component seems to be coMter intuitive and may only exacerbate p a y W dmm spedilcdly gmndfrrthere$. and those companies who have large ouMtadding amounts.

We regpectfuly FeqW that a cash flow d y s k be, wmpleted which wilt provide the Mwtry with a CCrmfDn 1-1 that paybaok &om a timing perspective win not be negativety SfEeCMJ by qpliwtim of the new te&lced ratea

If you have any questions or concerns please do not Wtate to cantact the undersigned.

those largsgrojects which are

Experience.The Difference-

June 24,2009

CouncillBoard of Control City of London 300 Dufferin Avenue P.O. Box 5035 London, ON N6A 4L9

Dear Board Members:

Re: Development Charges Background Study - UWRF Payment, Procedures and Cash Flow

Sifton Properties Limited is a member of the London Development Institute, and fully support their comments submitted to Board of Control in their letter dated June 24, 2009.

In staffs recommendation #5, we note that "Civic Administration BE DIRECTED to meet with LDl and Pacific and Western to review issues related to payout for existing works and works under construction in the Urban Works Reserve Fund " ... We note that while LDI represents their membership on Industry wise issues, it is specific Companies, such as Sifton, that have entered into Development Agreements with the City of London relating to construction of municipal works where a claim to the UWRF has been made. A review of Schedule 6, Appendix 0, clearly shows the interests that many companies have in this process. It is these companies that are directly impacted, financially and otherwise, by the proposed rule changes and management of the UWRF by the City of London.

While we have no objection with LDI continuing to speak for our association, specific landowners do have additional concerns and impacts that must be expressed and consideration provided for.

There are two specific issues bevond the LDI submission we would like consideration on. First, we see these proposed UWRF rule changes negatively impacting the cash flow of the UWRF, and extending the recoveries to Sifton for works we have already constructed. A list of these works was identified in my letter to Board of Control, dated May 13, 2009. We also have a number of works outside this letter that are in agreements with the City to construct, or have been constructed where a claim is now being made.

Sifton Properties Limited . Seniots'Living . Residential Rentals . New Homes . Neighbourhood Developments . Commercial Leasing

195 Dufferin Ave.. Suite 800 Tel. 519,434.1000 5iRon.com London, ON N6A 1K7 Fax. 519.434.1009

Of specific interest is the RiverBend Pump Station. While in 2001 Sifton did clearly agree to recover these funds through the UWRF when we entered into the agreement with the City of London, it was not our expectation that in 2009 we would still be awaiting full recovery. Over the last 8 years, it is not arguable that the majority of these years have been well above expectations, from a building permit and W R F revenue perspective. The issue at hand relates to the current and proposed UWRF rules. The existing rules allow for a penalty of recovery for works in excess of $1 million dollars where multiple years are required to recover. While new claims that have been submitted after our UWRF reduction of principle payment jump ahead of the cue, and further impact the cash flow of the UWRF. The UWRF rule that allows this ‘lumping o f the cue”, and in essence a penalty for large UWRF claims that have not been paid, must be amended to provide a fair and more predictable recovery. The proposed UWRF rules and rate does not provide any consideration that these UWRF works have already been constructed. The UWRF rate and rules that does not differentiate the existing constructed wbrks from future, unconstructed works, is not acceptable.

We respectfullv request that a cash flow.analv$is be completed which will provide the industrv with a comfort level that pavback from a timinq perspective will not be nenativelv affected bv application of the new reduced rate. We also request the UWRF rules be reviewed to not penalize recovefv of UWRF revenue to already constructed UWRF works.

If you have any questions or ciincerns, please do not hesitate to contact the undersigned.

SIF ON ROPERTIES LIMITED

Phil Masschelein Vice President Neighbourhood Developments

cc: London Development Institute Vic Cote Peter Christiaans David Ailles Ron Standish

Speaking notes - KLGC

Good afternoon. I am here today to speak to you on behalf of the Keep London Growing Coalition.

KLGC represents more than 50,000 taxpayers and their families in the city of London.

The primary interest of our group is to maintain and create jobs related to London’s building industry.

We are here today to ask Board of Control to make a recommendation to Council to defer the implementation of proposed Development Charge increase for a period of one year.

We are asking that the city delay implementing the 35% development charge increase recommendationfor aperiod ofone year in order to provide a stimulus to the building industry that will put people back to work.

Currently, job creation and economic stimulation are a top priority for the federal and provincial levels of government. We are asking our City to do the same.

To date, Council has not invested any monyy toward stimulating our local economy, even though we have the third highest unemployment rate in Ontario.

London’s proposed rate of $22,921 may be at the low end of mid-sized municipalities, but our unemployment rate is the third highest in the province, behind only Windsor and St. Catharines. The fact that our community has been hard hit during these times needs to enter into the analysis. It should also be noted, London wants to remain competitive during these times, not provide further incentive for people to build and live in areas just outside the city boundaries.

Other city councils across Ontario, whose unemployment rates are far less than ours, are stepping up to the plate to help their building industry and save jobs. In Cambridge, Kitchener, Waterloo, Oshawa, the Region of Durham, Pickering, Toronto, Brantford, Burlington, and Milton, their city councils have taken action and made tough, but necessary decisions to hold DCs at their current rates.

Some cities are also choosing to defer upconing Construction Price Index increases as well, something London did not do in January 2009.

Earlier this month, Hamilton’s City Council agreed to maintain their current DC, freezing it for one year with a review in 10 months - indicating that it flies in the fact of logic to do otherwise.

It has been raised that a deferral of DCs would not be entertained if there were an OMB appeal by the London Development Institute. While we understand it is the responsibility of City staff to focus on the financial aspects of the Development Charge, we do not see

any relation between our request for a deferral and staffs recommendation against a deferral based on a potential OMB appeal by the London Development Institute. This is not our issue.

As an industry, we know Council must increase the DC in London, but we strongly feel this is the worst possible time to do so.

By implementing an increase in residential development charges at this time, city council would not be showing the desire or the will to save jobs in this city or put people back to work.

Deferring the implementation of DC will not cost taxpayers as the growth share of projects will not change. If there is any shortfall, it would simply get picked up on the next DC, not by the taxpayer now. Further, due to current economic circumstances, it is quite likely that some projects within the cment GMIS may not go forward within the next few years, further decreasing any potential shortfall.

We need to work together - the building industry and the city - to stimulate our economy and save thousands ofjobs.

Please. Help the taxpayers who work in construction and related businesses that need your support by providing a stimulus to our local economy. Please make a recommendation to defer the 35% increase for one year. Please, show your support. Help to get people back to work in our city.

Thank you.

Urban League Presentation to Board of Control Five-Year Development CGarges Review/UWRF

June 23,2009

We are here to advise that we continue to fully support the Staff Report and Recommendations.

Sandy & I have been sitting on the Working Committee for UWRF/DC’s as the Urban League’s representative and alternate since late 2006 - the first meeting was in early Jan/07. You would think two and a half years is enough time.

First off, we’d like to thank Tony, Peter, David and Ron for their assistance and keeping us up to date throughout this process. They met with us early in the morning, late in the evening after our work hours and were very accommodating.

So here we are in mid 09, after 2 % years of fact finding, discussions and presentations (including 1 by a member of the Blue Ribbon Panel) and reports, to find ourselves still enmeshed, despite the considerable time, dialogue and effort expended by the public, developers and staff. We are not surprised to hear talk of delay and the OMB. We heard the same thing at the Working Committee.

We do not support an outright delay of the recommended D/C’s whether it’s 6 months or a year.

The benefit of $5 million dollars per year for 20 years to tax payers means debt avoidance by the City. Every growth dollar paid by development charges and not by the tax base means lower debt or even a lower capital levy. The recommended split puts more of the capital costs where they belong - on the growth share - not on the tax payer. In these economic times,

it makes sense to avoid debt.

We are all too familiar with how a delay works. A delay may generate a short term blip in building permit issuance but it creates a permanent gap in the required funding, meaning a higher rate later or a greater tax burden.

Our position is to follow Staffs recommendation exactly as outlined by Mr. Cote. The only delay that doesn’t hurt tax payers, is to implement the new rate now, but delay the collection of the difference between the old rate and the new rate until Jan 1,2010. This ensures taxpayers don’t contribute more than our fair share while allowing developers a cash flow break. I t also avoids the risk of a run on building permits at the old D/C rate.

You have a defensible rate. You need a good defense if this goes to the OMB. The League strongly urges Board of Control to support in full, Staffs Report and Recommendations.

Submitted by: Sandy Levin Gloria McGinn-McTeer UL representatives Working Committee UWRF/DC Review June 09

Speaking notes - LHBA

Good afternoon. Thank you for giving us the opportunity to explain the serious situation facing the home building industry.

There is urgency in our request today. We are here today to ask Board of Control to make a recommendation to Council to defer the implementation of proposed Development Charge increase of 35% for a period of one year in order to provide a stimulus to the building industry that will put people back to work.

London has the third highest unemployment rate in Ontario at 10.2%. This is higher than the national average of 8.4% and the provincial average of 9.4%.

Earlier this month, the CHMC stated “detached home starts in London are approaching the lowest level reached during the downturn in the early 1990s.” Between January and May 2009, starts of single-family homes were down 60% from the same time last year.

With this decrease already negatively impacting the building community, the proposal before Council today calls for an increase in Development Charges from $17,005 per single family home to $22,921 per home. New home owners already absorbed an increase of 4.1% as of January 2009.

In January 2004, development charges in London were $9,557. With the proposed increase, the new rate would be $22,921, or an increase of 140.3% over a five-year period.

These costs are ultimately absorbed by the homebuyer, pushing up the price of new homes in our community.

In these tough economic times, the home building industry, and the thousands of men and women it employs, is taxed to its limits. Implementing additional fees will not only negatively impact our industry, but all taxpayers in London.

To clarify, today we are asking Board of Control to support our request to delay the proposed DC increase for a period of one year to allow the industry to stabilize and hopefully rebound from the current recession.

We’ve heard the argument the taxpayer can’t afford to pay the potential $3 million shortfall that a one-year freeze could generate. Let me clarify.

The $3 million is based on an optimistic projection of the construction of 500 homes in the next year.

All Londoners will be affectedmby the lack of construction of new homes as each new home inputs an average of $300,000 into the local economy through employment of workers and materials and goods purchased. The construction of 500 new homes would equate to a significant $150 million into our local business community.

An Altus Group study in April 2009 showed an additional spin-off of approximately $46,000 per home into the local economy. This includes those items new home buyers purchase in addition to the cost of the home such as landscaping, furniture, home accessories, window coverings, legal fees and real estate fees. 500 homes equals another $23 million for local business.

Also, when our workers are employed, they spend at local restaurants, businesses, car dealerships, downtown stores and countless other small businesses.

If you consider the $6,000 increase could discourage 20% of the home buyers to either not buy or to purchase a resale home, then the business community stands to lose over $34 million and the City would lose upwards of $2.3 million as the fiill$22,921 would not be paid in Development Charges to the City.

We did not base our request on the number of pennits as an economic indicator as this does not provide surety to either the City or to new homebuyers. And, in prior discussions with city staff, using a date eliminates considerable administrative work that would be required to monitor permit levels.

Deferring the implementation of DC will not cost taxpayers as the growth share of projects will not change. If there is any shortfall, it would simply get picked up on the next DC, not by the taxpayer now. Further, due to current economic circumstances, it is quite likely that some projects within the current GMIS may not go forward within the next few years, further decreasing any potential shortfall.

Further, without growth, the taxpayer will pay incremental costs. Assessment from growth was used to lower everyone's taxes by 1.5% last year. Without growth, unemployment rates increase and local businesses suffer. Without jobs, the city's share of Ontario Works payments goes up,

not to mention the social issues that result due to the financial pressures of unemployment.

We ask that you recognize the value of construction jobs and understand the link to economic activity for local businesses as many other municipalities in Ontario already have and join these leaders in finding a way to defer the proposed DC increase.

Please consider carefhlly the impact this increase will have to not only the thousands of taxpayers who work in the building industry, but to all Londoners.

Thank you.

19