Region proposes hiking development charges

DURHAM -- The Region is looking to hike development charges across the board in an effort to line up revenues with the actual cost of installing water, sewers and roads.

"The thrust this year is really to ensure growth pays for growth," said Jim Clapp, the Region's commissioner of finance, at a public meeting on the issue held during last Wednesday's council meeting.

As it stands, property taxpayers and water and sewer user rates cover 50 per cent of the cost of constructing water, sewers and roads for commercial developments and 100 per cent of the cost for industrial and institutional developments.

The Region's proposal would see commercial and institutional development pay the full cost while industrial development would pay 50 per cent.

The hike would be phased in, rising from the current $5.37 per square foot of gross floor area to $17.15 by July 1, 2010 for commercial developers. The institutional charge would increase to $4.75, the full cost of servicing, in 2010. Industrial development charges would rise to $4.13 per square foot in 2010.

Schools, municipal facilities and places of worship would be exempt from paying institutional charges. As well, office buildings larger than 25,000 square feet would pay only 25 per cent of the commercial fees.

That's because they're an attractive type of development, said Mr. Clapp.

"They provide high-quality jobs and they have a high employment-density factor."

The Region is also looking to increase the charges on residential developments by almost 30 per cent so they're in line with the actual cost of servicing. On a single detached house the fee would rise almost $4,000 to $18,536.

The biggest chunk, totalling almost $17,000 for that home, goes to water, sewer and roads. A smaller amount goes to police, emergency medical services, long-term care, studies and transit.

The increase means that compared to other municipalities, Durham's fees on a single detached home would be third among upper-tier municipalities, behind Halton's proposed hike and the current rate in York.

At the meeting, Oshawa Councillor Brian Nicholson questioned how increased fees would affect industrial development.

"In Oshawa, our industrial sector is under siege; our manufacturing sector is under siege," he said.

Mr. Clapp responded the Region wouldn't make the proposal if it was counter-productive.

"The flip side is whatever you don't get from the industrial developers, you're going to get from the taxpayers and those paying their water and sewer bills," he said.

Durham's industrial charges would remain lower than York Region's by more than half, and lower than those in Halton and Peel regions. Mr. Clapp also said that the Region had several meetings with the local development industry, including the Building, Industry and Land Development Association (BILD).

The industry members at the public meeting did not raise any major objections to the proposed increase.

However, Myron Pestaluky, representing west Whitby landowners, questioned why the Region would delay servicing the west Whitby lands until 2013 to 2018 when it was originally supposed to be serviced by 2010. He said there's historical support for developing the area.

"Even if we could get the planning approvals, the Region would not construct the sewer and water until a later date," he said.

Whitby Mayor Pat Perkins said the lands have been frozen for more than 10 years and she wants to see them serviced.

"My problem is we've got all sorts of people who own land there. I've got two doctors in town who are well into their 80s who bought land 40 years ago," she said. "I see them on a regular basis and they say, 'is our land still frozen'?"

The Region is delaying the servicing because the Hwy. 407 extension will run through the area, but Mayor Perkins is worried the delay will cripple development for years.

The new development charges bylaw will go to council for approval in June.

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