2019 Development Charges Study

Technical Stakeholder Consultation

Wednesday, November 21, 2018

Burnhamthorpe Community Centre

Today we will discuss...• Introductions

• City DC Survey Results

• Overview of the Development Charges Act

• Development Charges Study Process

• Preliminary Development Forecast

• Historical Inventories

• 2019 DC Policies Review

• Next Steps

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Introductions• City of Mississauga Staff:

– Elizabeth McGee, Manager, Financial Strategies

– Susan Cunningham, Manager Development Financing & Reserve Management, email: susan.cunningham@mississauga.ca

– Rebecca Aza, Policy Analyst, email: rebecca.aza@mississauga.ca

– Jahnavi Ramakrishnan, Policy Analyst, email: jahnavi.ramakrishnan@mississauga.ca

• Hemson Consulting:

– Craig Binning, Partner

– Jackie Hall, Consultant

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

DC Survey Results

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DC Survey Results

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DC Survey Results

DC Survey Results

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DC Survey Results

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DC Survey Results

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DC Survey Results

DC Survey Results – Summary

• City staff has gained some valuable insight

• Identified that the City needs to provide a greater understanding about DCs in the public forum– How DCs are spent in Mississauga?

– The difference between Regional and City DCs

• Strong viewpoints exist in certain areas related to DCs

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DC Survey Results – Summary (2)

• Almost 60% of those that took the survey were developers• 50% of those taking the survey considered themselves

knowledgeable about DCs• Developers are looking for a change in the City’s DC rate structure

– Example, back-to-back and stacked townhouses category

• The bulk of the residential development respondents develop units related to a high density built form

• Greater number of non-residential developer respondents build commercial developments

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DC Survey Results – Summary (3)

• City will continue to accept feedback throughout the DC process in developing its recommendations to Council, as part of the 2019 DC Background Study and By-law update

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Development Charges Recap

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What Are Development Charges?• Fees imposed on development to fund “growth-related” capital

costs

• DCs pay for new infrastructure and facilities to maintain service

levels

• Principle is “growth pays for growth” so that financial burden is not

borne by existing tax payers

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Background

• City Council passed DC By-law 0161-2014 in June 2014 that

imposed DC rates for eligible City services

– In June 2019, the 2014 DC By-law will expire

• In order for the City to continue to collect DCs, a new DC

Background Study must be completed and the City must hold at

least one public meeting

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Overview of the Development Charges Act (DCA)

• Service exclusions:– Cultural and entertainment facilities, including museums,

theatres and art galleries

– Tourism facilities including convention centre's

– Parkland acquisition

– Hospitals

– Headquarters for general administration of municipalities and

local boards

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Eligible Capital Costs

• Costs to acquire and improve land

• Building and structure costs

• Rolling stock with a useful life of 7 years or more

• Furniture and equipment, excluding computer equipment

• Development-related studies

• Engineering fees, contingencies

• Past expenditures still to be funded through future DCs

• Interest and financing costs27

Changes to the DCA as of Jan 1, 2016• Transit services are no longer subject to a 10% reduction and

based on a “planned” level of service

• Asset Management Plan (AMP) must demonstrate that assets are

“financially sustainable” over their full lifecycle

• Longer consultation period – DC Background Study must be made

available 60 days prior to the passage of a DC By-law

• Additional reporting requirements

• DCs payable at first building permit (for multiple building permits)

• DC Background Studies must consider Area Specific DCs

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Overview of Study Process

Q1-Q3 2018

Development Forecast

Historical service levels

Funding envelopes

Capital programs

DC Policy Review

Preliminary DC rates

Q4 2018Cost of Growth Analysis

Draft DC Background

Study

Consult with Stakeholders

Finalize Preliminary Draft Rates

Q1 2019

Finalize DC Study

Continued consultation with

Stakeholders

Q2 2019

Release DC Study to

Public

Passage of DC By-law

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Overview of Study Process

Anticipated amount, type and location of development must be estimated

Increase in the need for service attributable to the anticipated development must be estimated

Increase in need may not exceed average level of service immediately preceding background study

Allocation of eligible costs by type of development

Reduce capital costs by legislated deductions

Calculate 10-Year Historical Service Levels

Grants/OtherContributions

Required Service Discount

Replacement/Benefit to Existing

Available DC Reserves

Post-Period Benefit

Costs Eligible for DC Recovery

Residential Sector(per unit)

Non-Residential Sector(per m2 of GFA)

Development Forecast

Identify Growth-related Capital Needs

Operating & Replacement Cost Analysis (Incl. AMP)

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Key Steps in Calculating DCsDEVELOPMENT FORECAST

• Forecast amount, type and location of development

• Establish area to which DCs apply

• Establish planning periods

• Types of development

– Residential: population and dwelling units

– Non-residential: non-residential floor space and employment

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Development Forecast: Key Assumptions• Population and employment forecasts based on 2017 Growth Plan

(Amendment 2)

• Region and City staff are currently working on new growth

allocations, but nothing has been approved

• Assumptions for 2019 DC Background Study

– Based on Council-endorsed population and employment targets from the 2014

DC Study

– Considers growth in many areas including Ninth Line, strategic waterfront sites,

the Hurontario Corridor and the Downtown

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Development Forecast• Planning Horizons

– General services = 2019-2028

– Engineered services = 2019-2041

• Council-approved population and employment targets

2031 2041

Total Population 829,000 878,000

Total Employment * 527,000 552,000

* Includes place of work, no fixed and work at home employment

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Residential Growth Forecast

* Census population excludes an undercoverage of 3.37%34

General Services2019-2028

Engineered Services2019-2041

Residential TypeAt

2018Growth

2019-2028At

2028Growth

2019-2041At

2041

Total Occupied Dwellings

- Ground-Related Units- Apartments

243,462 21,398

5,12016,278

264,860 49,373

11,47237,902

292,835

Total Census Population - Census Population*- Total Pop in New Private Dwellings

731,693 50,64656,393

782,339 117,707129,686

849,400

Non-Residential Growth Forecast

* Non-residential GFA is calculated based on employment in new space

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General Services2019-2028

Engineered Services2019-2041

Non-Residential TypeAt

2018Growth

2019-2028At

2028Growth

2019-2041At

2041

Employment - Employment in New Space

463,094 31,81434,920

494,908 62,67970,925

525,773

Non-Residential GFA (m2)* 1,760,014 3,389,041

Historical Inventory Analysis

General Service Level Methodology

• 10-year historical average service level period (2009-2018)

• Inventories data developed with City staff

• Quantity and quality of service considered

– Quantity = number of items

– Quality = replacement cost of assets

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What is Included in the Inventories?

• Historical inventories reflect– Demolitions of buildings

– New buildings

– Updated information for assets (e.g. building gross floor area)

to reflect best available information

– Historical inventory was reconciled with various data sources

(e.g., TCA)

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Summary of Historical Inventory Analysis

* The 2014 DC Study was based on a Fire Response Times approach. For the purposes of the 2019 DC Study response times are being used as input to the

determination of services levels, servicing capacity and the development-related capital program38

Service 2014 Methodology 2019 Methodology

General Government Net Pop. + Emp Net Pop. + Emp

Library Net Pop. + HHE Net Pop.

Public Works Emp. + HHE Net Pop. + Emp

Fire Services* Fire Response TimesNet Pop. + Emp and Fire Response Times

Parks and Recreation Net Pop. + HHE Net Population

Parking Net Pop. + Emp Net Pop. + Emp

Development-Related Studies N/A Net Pop. + Emp

TransitEmp + HHE and Transit Adjst.Factor

Planned Level of Service

Living Arts Centre N/A N/A

Roads & Related Net Pop. + Emp Net Pop. + Emp

Rate Structure Comparison

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Category 2014 DC Study Proposed for 2019 DC Study Comments

Residential • Other Residential • Apartment (700 sf or

greater)• Small Unit (

Exemptions

• Statutory

– City, Region, School Board-owned development

– Creation of additional residential units (subject to the rules of the DCA and associated regulation)

– 50% industrial expansion

• Non-Statutory

– Consistent with the 2014 DC Study, no new non-statutory exemptions will be provided

– Grant in lieu of payment of DCs will be continued for places of religious assembly for a portion of the facility

– Any relief from development charges will be at Council’s discretion 40

Next Steps• Inventories will be sent via email - Week of November 19th• Next Stakeholder Meeting - December 6, 2018 1:30pm –

3:30pm, Committee Room “B”, Civic Centre(To be rescheduled)• Agenda items include:

– Response to questions arising from inventories

– Continued discussion of proposed policies

– City’s growth capital program to be provided following meeting• Questions and/or feedback to be directed to:

Susan CunninghamManager, Development Financing & Reserve ManagementEmail: susan.cunningham@mississauga.ca

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jahnramCross-Out

Questions?

Thank you for your participation

Keep informed, visit City’s Website:

www.mississauga.ca/developmentcharges

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