Proposed reductions in exemptions to development charges are being challenged at two public meetings tomorrow of council’s Audit, Finance and Administration committee. Some registered speakers want the city to maintain an exemption from growth fees for academic institutions; while at least one other wants a modified system that would cut subsidies for greenfield development.
The development charges bylaw must be renewed at least once every five years, and provincial law requires the city to hold a public meeting and hear from anyone who wants to speak about it. That’s taking place on April 16 in council chambers at city hall and will be in two parts – a regular 9:30 AM gathering and a special 7 PM one to accommodate residents who can’t attend during the day. The meetings will be live-streamed.
The bylaw sets out the fees to be paid to cover at least part of the servicing costs of new growth projects such as subdivisions, apartment buildings, big box complexes, office towers, and industrial facilities. It also applies to construction of individual homes and to expansions of existing commercial and industrial facilities.
Staff warn that the current exemptions will mean a $40 million hit per year to existing taxpayers. Staff have argued that some of those exemptions must be eliminated, so costs imposed on taxpayers won’t exceed $12.5 million annually.
The biggest change would end the exemption for academic buildings and is being strongly opposed by McMaster, Redeemer and independent schools such as Calvin Christian. Staff estimate if this exemption is not eliminated, the cost to taxpayers over the next decade will be $85 million. Registered speakers for the April 16 meetings include the presidents of both McMaster and Redeemer universities.
The new bylaw also recommends reduced fee exemptions for downtown development which currently enjoy a 70 percent discount. That would fall to 40 percent if the draft rules are approved.
The downtown discounts are defended because roads, pipes and other services are already in place there, as opposed to greenfield development where all new services are required. That approach is frustrating many councillors such as Brad Clark, Maureen Wilson and JP Danko who have been pushing for an alternative system of variable fees.
Currently fees are calculated by dividing total expected city costs of servicing new growth over the next decade and then dividing that between individual projects. Hamilton charges the same rate across the entire city and then provides exemptions for preferred development such as in the downtown core.
An alternative approach is to charge variable fees – higher for greenfield growth where all the services have to be provided new, and lower for infill development such as downtown where roads, pipes and other services already exist. The new bylaw goes part way in this direction by separating out the costs of new stormwater facilities and charging a higher fee for development on greenfields. That will mean new greenfield houses will pay about $9000 more than those being constructed in the already built-up area.
But the fees for other services such as roads are not proposed to be separated out and councillors like Wilson, Danko and Clark contend this means sprawl development isn’t actually paying its way and still enjoys a significant financial advantage. In effect, sprawl is favoured over the intensification that city and provincial policies say is more efficient for taxpayers.
It was recently revealed the city has accumulated by $55 million deficit as a result of exemptions and discounts to growth fees. The plan is to gradually fill in this financial hole with monies from property taxes and water rates.