A report presented to councillors this morning claims that development charges will more than cover a steep increase in the cost of the Red Hill Creek Expressway. But the figures in the report are much different than those presented in the official city budget.
Monday's report says the city has already collected $39.9 million in development charges for the road. The 2004 budget says that only $18.9 million has been taken in. No explanation is offered for the missing $21 million.
Page 135 of the 2004 city budget provides a detailed breakdown of the costs and financing of the combined east-west and north-south expressways. It says that "Development Charge Collections" prior to 2004 amounted to just $18.855 million, and that no further revenue from this source is expected over the next 10 years.
The exact same $18.855 million figure also appears in the 2003 budget as "pre-2003" collections. The 2002 budget shows that 2001 was the last year in which development charges were collected for the expressway.
The apparently erroneous figures undermine a key argument in the staff report that development charges will " mitigate the impact of the project budget increase of $15.5 million" for the Barton to Brampton section of the valley expressway.
The report says that additional development charge collections will be $25 million under a new bylaw adopted in June. But this is largely negated if the actual collections so far are $21 million less than claimed.
The mitigation argument is weak to start with because the new bylaw did not take into account the $15.5 million cost hike when it calculated the amount that should be collected from development charges. The staff reports says "the $15.5 million dollar project cost increase will be added to the City's next development charge By-law review", but that review isn't scheduled until 2009.
The staff report only predicts that 16% of the expressway cost will ever be covered by development charges. The connection between the valley expressway and new subdivisions was made clear earlier this year when Multi-Area Developments began construction of the 3200-house Summit Park at the south end of the proposed expressway. Owner Aldo DeSantis frankly declared that his project could proceed because the valley road was now under construction. |
|
Development charges are assessed against new subdivisions to help cover the costs of providing services to these areas. Ninety-five percent of the costs of new roads are normally supposed to be paid through these charges which are also called lot levies.
The June by-law only assesses 44% of the costs of the expressway to development, continuing an agreement struck with the Hamilton-Halton Homebuilders Association in 1999. Various discount and exemption policies of city council mean that far less that 44% will actually be collected. The staff report, for example, only predicts that 16% of the expressway cost will ever be covered by development charges.
The connection between the valley expressway and new subdivisions was made clear earlier this year when Multi-Area Developments began construction of the 3200-house Summit Park at the south end of the proposed expressway. Owner Aldo DeSantis frankly declared that his project could proceed because the valley road was now under construction.
The city staff report on the Barton-Brampton expressway contract can be viewed at
http://www.city.hamilton.on.ca/Clerk/
agendas-minutes-reports/public-works/
2004/Oct04/PW04111.pdf.
