Candidate Questions 10: What about those DCCs anyway?

Rossland Telegraph
By Rossland Telegraph
November 16th, 2011

Development Cost Charges (DCCs) have been a source of controversy for a few years now. Do low DCCs encourage development or merely subsidize real estate speculators while passing the burden along to feckless local taxpayers? Gulp. The question, then, is this: “Given the state of the economy, prospects for growth in Rossland, and the vision for future development spelled out in the Official Community Plan (OCP), do you think that DCCs, a subdivision fee intended for infrastructure, should be increased, or are the current rates reasonable?”

CARY FISHER:  I think DCC’s in a town with a negative growth trend make no sense at all.  We have a declining population.  The Red Mountain and Redstone are attempting to bring jobs and shoppers to Rossland.  DCC’s create a disincentive for people wanting to build.  The margins in a development in Rossland are low.  Why not graduate the DCC’s to ensure the viability of the community.  If we stop development we also stop the development of the amenities we so dearly enjoy.  Why not take the bold step of encouraging development.

JILL SPEARN: Development Cost Charges are only one means of collecting fees for infrastructure upgrades due to development. If infrastructure is upgraded in order to provide more capacity for a development then certainly that needs to be shared because both the city and the developers benefit. I don’t think we need to charge ‘excessive’ DCCs, particularly in this down turn.  Developers already pay the DCC charges of 2500.00 per lot, when lots are created and then when a house, for example, is built, are again charged for sewer connection of another $2500.00. To raise our DCCs to $13,000.00 per developed lot does not make sense in these challenging economic times.  One Connection charge per lot makes more sense because everyone is then on the same playing field. I have listened to builders, who are not even developing multiple lots, say that Rossland costs about 10-15 thousand dollars more to even get the ground ready in order to build due to topography and bedrock. We need to support our builders and that is why we must be very cautious about creating an untenable situation regarding this industry. Trail doesn’t have any DCCs as is common in many communities that don’t have a thriving economy and have small scale developments. Let’s be realistic and fair on this issue. Whatever costs are placed upon the developers will inevitably be passed to the buyer; remember the affordability piece we’re striving for?

 JODY BLOMME: It just makes sense that the developers should bear the costs of their own development projects, not Rossland taxpayers.  This issue needs to be settled as soon as possible.

SHARON WIEDER: No comment on this issue as I don’t know enough about it.

LAURIE CHARLTON: Development Cost Charges (DCCs) are fees obtained from developers to pay for infrastructure installations or upgrades (roads, water, sewer, and/or parks) that are only required as a result of new development.  In other words, if there was no development, there would be no need for changes to the infrastructure, and no need to collect those fees.  If DCCs are not collected, the costs of installing the necessary infrastructure will be borne by local taxpayers.  At the present time, little development is occurring and is unlikely to occur until the world economy improves.  However, a DCC plan looks at potential projects 20 years, and sometimes more, into the future.  While little is happening now, that does not mean that demand will not occur next year or the year after that.  We need to have the plan in place before the demand arrives.  Otherwise we lose the potential for revenue just as we lost the opportunity to gain hundreds of thousands of dollars in the early part of the last decade as development started at Red Mountain before a DCC plan was in place.

The DCC plan identifies all the projects that will be needed if proposed development occurs and calculates how many new units could be built before any particular project was needed.  That calculation establishes the order of priority for installation of the infrastructure.  DCC rates are set so that the first few projects can be paid for by the fees that are collected.  As a project is finished, the priority list is revised, new projects are added to the list and new DCC rates are calculated.  An expert engineering consultant, who specializes in DCCs, was hired by the City at significant cost, to review our DCC bylaw.  He recommended a significant increase in the fees to be charged.  Council chose not to implement his recommendations.  Now we are faced with the prospect of installing some of the projects identified in the DCC plan (for example, the upgrades to the sewer system on Washington and Columbia that are only required as a result of the current and potential development at Red Mountain) without having adequate DCC reserves to pay for those, and other upgrades, required now or in the near future.  Any lack of funds will be made up by taxpayers and there is no way that those funds can be retrieved from the developers in the future.  Current DCC rates are too low.

DAVID KLEIN:  We did have a consultant come in and say raise them. However, that was during the economic “boom” so I would say that report is out of date. It is a complex matter, and I would think for now the fee is reasonable but would work with the public and council if need be.

KATHY WALLACE: I think DCC’s are a problematic tool for Rossland. Population projections are foundational to their calculation and projecting population for Rossland has not proven accurate. They apply only to upsizing that development requires and the funds must be very specifically applied to projects rather than the general fund, i.e. a certain portion of a road rather than the general roads fund. The requirements on how funds are spent is too restrictive. There are other cost charge tools available and council has requested a staff report to recommend which one, or combination of, would be a better fit for the community.

KATHY MOORE: That is a deceptively complicated question. Certainly development should pay its fair share- but DCCs may not be the best tool to accomplish that goal. The discussion about DCCs was ongoing when I left town at the end of Sept and I am not sure where it stands right now. (I have a lot of reading to do to catch up with the two meetings I missed). I have an open mind as to how the costs of development should be paid. I don’t want any more burden on the existing taxpayers for new development but some of the comments I have heard in town seem to imply that development should pay for infrastructure renewal projects that are the responsibility of current residents. It isn’t fair to expect developers to pay for work that has been left undone for decades just because no one wants to foot the bill for the “unsexy” stuff like sewer, water or roads. My goal will be to look for a solution that is fair to everyone, but not necessarily one that makes everyone happy.

To read previous installments of Candidate Questions, click here. To go to the Telegraph’s Elections 2011 home page, click here.

Note: this article has been amended in order to include Jill Spearn’s response.

Categories: Op/EdPolitics

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