LETTER TO THE EDITOR: Finding A Realistic DCC Value

By Contributor
June 29th, 2009

To The Mayor and Council, City of Rossland

The challenge of setting DCC’s is that of matching possibilities and probabilities in a realistic scenario, absent complete information. I regret that other commitments prevented me from attending the open meeting to discuss this with you directly.

From what I know, the principal issue with water-related DCCs stems from an unclear rate of development. If the rate of development is to be rapid and significant (say ~4% annualized) the DCC’s must be greater and timed sooner than if they are much slower/lower (<1%). I personally believe the latter scenario is now much more likely than the former.

This dichotomy of scenarios is what is spooking the process -it must be one or the other (or bouts of both with development in fits & starts). The former scenario is the one the developers wish will happen (good revenue for them) but the citizens are owed protection from defaulted costs in the event that DCC planning goes the first route but development is slow.

An estimate which reflects the best estimate of development rate must be used. In my opinion, this should be conservative (protect the interest of the citizens, by default). The DCC bylaw resulting from this could contain provisions for rebate to the developers in the event that history proves the levied DCC’s too high.

I can see that setting these DCCs is politically challenging. Council naturally wants the town to succeed, so active development is good, thus keeping the DCCs below the threshold which would inhibit development seems desirable. However, if DCC’s are set too low and/or the development they anticipate does not occur, the unrecovered costs of infrastructure installed in anticipation of demand (the Ophir reservoir being an example) will certainly fall on the other taxpayers in the form of taxes. Council has to balance their budget and there is only taxation to cover shortfalls. People respond to excessive taxation by “voting with their feet” and moving elsewhere, thus too-low DCC’s are a certain way of (eventually) killing the community. Political will to preserve the quality of life for all (low costs etc) must trump the desire for glory accruing to Councilors from overtly fostering development. In this case foregoing the present kudos for a stable and assured future should prevail.

I believe that it behooves the Planning function at City Hall to state clearly their single best estimate of growth pattern and present data reconciling that projection with future infrastructure requirements and timing. This single scenario is the necessary basis for a DCC levy.

If we do have sufficient water for 50 years, development will not be proceeding at anything like the rate anticipated by some developers and thus the number of lots against which DCC’s were levied will fall and the DCCs should rise for the undeveloped lots to ensure recovery of sunk costs. If the more rapid rate is indeed correct, more infrastructure will be required sooner thus the future DCC’s must again rise from the present ~$3300/unit level, probably to the ~$14,000 range which the consultant (an expert) recommends. Raising DCCs will probably violate the expectations of some developers but they have no right to draw money from taxpayers (long term) to themselves (short term) by the simple promise of future development.

W F (Bill) Micklethwaite


Categories: Letters

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