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LETTER TO THE EDITOR: Development Cost Charges in Rossland

by ken holmes on 31 May 2009
in

This letter will hopefully serve as a “wake-up call” to those citizens of Rossland who do not wish to see their taxes increased to pay for infrastructure for future development.

To refresh peoples memories, a Development Cost Charge (DCC) bylaw was introduced in Rossland in December 2004. It set the amount for a single family dwelling at $2,400.  When there was a change in Council in December 2005, this amount was increased to $3,300.

A few residents repeatedly expressed their concerns to Council that the DCC amounts were inadequate for the extent of infrastructure upgrades identified by engineering consultants needed to service the amount of development approved in the OCP. The City took no action until early 2008 when a consultant, UMA…now AECOM was hired to review DCCs.

A draft report was issued by UMA (AECOM) on June 26th 2008. It includes a schedule of rates for different types of development and for two areas of the City, Red Mountain and the remainder (City/Redstone). This draft report recommended that the DCCs for a single-family dwelling should be increased from $3,300 to $14,921 at Red Mountain and $9703 for City/Redstone.

The consultant presented the report to developers and the proposed amount was reduced to $13,779 for Red Mountain and $8,624 for City/Redstone in a revised draft report. There was no public consultation and the report “sat on the shelf”. After raising the issue with a few Councillors in February, a public meeting was eventually scheduled for May 26th 2009.

This public consultation meeting was held as scheduled and was poorly attended by the general public with only 5 members of the public attending.

My main concern has always been that the existing DCCs were set too low. If they are not increased, taxpayers will have to pay the difference between the amount currently charged and the amount that has been recommended. This means that for every $3,300 paid by developers as a DCC, an additional $10,479 will have to be paid by taxes for every unit built at Red Mountain and $5,324 for every new unit built in the City or at Redstone. Note that this is in addition to about $4.9 million deemed to be the City’s portion of infrastructure upgrade projects totaling almost $12 million.

My perception is that a majority of Councillors are not in favour of increasing DCCs. I emphasize that this is a perception. The report, with the consultant’s recommendations, has sat on the shelf now for almost a year. If I were a betting man, I would bet that if a motion was made to council, right now, to increase DCCs, it would be defeated by a vote of 4 to 3.

The issue is should DCCs be increased in accordance with the recommendations of the expert consultant or should DCCs remain unchanged or eliminated altogether?

The DCC Best Practices Guidelines published by the BC Government mentions a few guiding principles including, beneficiary pays, fairness and equity.

In my opinion, it is unfair and inequitable for a large portion of infrastructure costs for future development to be subsidized by taxpayers who are not the main beneficiary.

I’ve no doubt that developers are actively lobbying councillors not to increase DCCs. If citizens remain silent, in my opinion, there is a high probability that DCCs will remain unchanged and taxpayers will pay for infrastructure upgrades for future development.

I urge all citizens who do not want to see their taxes increased and who support increasing DCCs as recommended by the expert consultant, to phone, write, or e-mail Rossland’s mayor and councillors to let them know your opinions. 

Ken Holmes

Rossland  

Comments

email set to Rossland City Counsil re: DCC

by PaulPicard47 on 08 Jun 2009 at about 18:29.
To the city council of Rossland, First a word of heartfelt thank you for the energy and time that you are contributing to the current and future affairs of Rossland. Better late than never as my mother used to say, thank you for taking the time to deal with the important issue of DCC. You are the elected representatives and no citizen including myself can dictate to any member of the council what she/he should do. As an interested citizen however it is my duty to share my point of view regarding what I feel about this. I do not even wish to recommend what amount should be voted for future DCC. My most important consideration is total transparency: what are the real DCC costs that will have to be paid by the developer or the community, what amount you decided to charge and the logic explaining your decision. Another important point is for total transparency and accuracy in reporting of the DCC financial transactions. As an example, if the stated cost of DCC is valued at $15,000 per new unit and council votes for a DCC fee of $5,000, then the financial entry for each DCC transaction should read in the financial journal: that we incurred a cost of $15,000 which was paid by the combination of $5,000 contribution by Mr X and a subsidy of $10,000 to Mr. X At the end of the fiscal year we can know the exact cost to the citizen of the municipality and the total amount of direct subsidy to each person. I believe that we elected you to do the difficult job of running the city to the best of your knowledge and abilities. You each have a combination of strong points and weaknesses. However the common points stressed by all of you at election time were transparency and communication. My focus is in that transparency in the recording of the financial transaction, and communication in each one of you telling us how you came to your ratio of splitting the DCC expenses between the developer and the community. Regards, Paul Picard www.picardacl.com 1-250-362-7642

DCC's are important

by Kathy Moore on 04 Jun 2009 at about 17:58.

I greatly appreciate the comments and concern expressed by both Ken and Michelle.

DCCs are an important topic that involves the entire community. These regulations determine how we allocate the infrastructure improvements that are needed as our community grows. The consultants that the city hired produced a comprehensive report that council is carefully considering. I was disappointed that more people did not come out to the public consultation to learn more about this subject and to voice their opinions about it. I strongly encourage everyone to take a look at the report (its posted on the city's website) and to communicate your views with council. We were elected to represent you, not to think for you! We need to hear your thoughts and opinions.

I am not sure where Ken got the idea that council is likely to reject the report, make no changes or remove DCCs entirely. As a member of council I have not heard anything that would lead me to make such a statement. I feel confident that it is council's intention to revise and update our DCCs to be fair to all taxpayers.

thank you

DCC learning

by Michelle Laurie on 01 Jun 2009 at about 15:29.
Understanding the DCC issue is important to ensure that the burden of infrastructure development costs to service NEW development should not be borne by the existing resident population of Rossland. I hope our mayor and council will consider the following points: 1. The DCC is not a discretionary charge. The consultants have set the DCCs at a rate that reflects the real cost of infrastructure development associated with commercial, industrial, and commercial development. DCCs are governed by tight provincial legislation to ensure that the rate is based on real costs and does not constitute an additional tax. DCCs are not a tax, or a cost download - this is municipal government ensuring that the cost of development is borne by developers and not by the community at large. Asking the municipality to lower the DCC rate is like asking the municipality for a free grant to offset the cost of development. No other business class in the community would ever come to the municipality to ask for such a grant. Imagine if the accountants of Rossland, for example, came to the municipality and said "Our cost of doing business is rising, and we need new software (read "infrastructure") in order to allow us to get more clients. We think the municipality should pay for it". 2. Despite hard economic times, developers will ultimately pass on DCC charges to the home buyer, thus not affecting their ability to develop. If the upfront payment of DCCs at time of subdivision or building permit are the issue, then, working closely with other resort municipalities facing the same issue, Rossland should work with the province to find means of spreading the DCC cost over phases or stages of the project. Alternatively, developers have the option of posting a bond for the DCCs. Moreover, with the new stipulations of Bill 10, the municipality now has many means available to it to implement incentive based bylaws to encourage the reduction of DCCs for the provision of affordable, energy and water efficient, or compact footprint developments.. If developers want to "avoid" the infrastructure related costs of their development, the municipality can provide them the means to do so IF developers are providing development that meets the goals of a sustainable Rossland. 3. Rossland should send the message out to citizens and developers regarding the type of development we want to promote. If the claim of affordability is concerning council, develop a housing needs assessments, and an affordable housing strategy that will allow for the development of a suite of strategic market and non-market based tools to ensure that Rossland is an affordable place to live in future. Providing an infrastructure discount to developers by lowering DCCs will not ensure long term housing affordability in Rossland - it will only ensure that the existing community has to pay even more through taxation. 4. Rossland should encourage development within the city core to maintain principles in line with the strategic sustainability plan. This includes adopting the necessary bylaws allowed by bill 10 to reduce DCCs for green, water efficient, energy efficient, compact footprint, and affordable housing. This will create the incentives and disincentives required to ensure that new development in Rossland meet the needs of our community. 5. Rossland should not take out any loans (even if low-interest) to pay for new burdens due to infrastructure related to new developments - doing so would only further shift the burden of new infrastructure development to the existing community.