There is much evidence to support the theory that development does not pay for development. If the Development Cost Charges (DCC's) are also insufficient the problem is magnified. Development Cost Charges are used as a method for funding infrastructure to accommodate new growth. They are paid by the developer.
Cranbrook only implemented DCC's in the year 2000, whereas many communities across Canada implemented them in the 1960's. Despite recommendations from Cranbrook's Growth Management Study the issue of underfunded DCC's remains. The Growth Management Study recommended over a year ago that at minimum, the DCC's be doubled to $6531.00 per dwelling unit.
The maintenance of Cranbrook's existing infrastructure has also severely lagged behind. We must ask where the responsibility for that lies and how we will solve the problem. Growth may well be part of the solution but where, what and how are very important questions.
The City of Cranbrook in May of 2010 was forced to amend its five year financial plan in order to fund the extension of water and sewer lines through the Havaday/Wildstone lands to accommodate the Shadow Mountain Development.
"Growth isn’t something to be feared" said Sean Campbell at the all candidates forum.
We agree it should not be feared but if the current structure of government does not cover the cost, no amount of increased growth will solve the problem we have inherited. It will only make it worse.
"1.2% growth is insufficient going forward. We need to aim higher. We have significant development within the city that would allow us to broaden and grow our tax base. That will give us the additional tax dollars that will address that deficit." Sean Campbell continued.
However with the current rate of DCC recovery, it will not solve the problem.
Jim Fennel stated, " There is fixation that has appeared over growth. Let’s not worry about how the growth is implemented"
We would suggest how growth is implemented is incredibly important. How it is implemented determines how much it costs the city as a whole.
Jay Savage stated, " To pay for our infrastructure we need to increase our tax base. I think looking backwards at looking at our historical growth is not the best necessary foundation to look forward. I think we need to look forward with a renewed vision of what Cranbrook can be."
Indeed we need to look forward with a renewed vision but historical growth is what it is and learning from history is vital. Mistakes have been made and we need to learn from those.
There is much information available on this topic. Cranbrook is not alone. Several of our speakers over the last few years have discussed the issue and potential ways costs of new development may be eased. The following are just two examples of written documents that readers may find useful. With the current economic world difficulties this topic must be taken very seriously.
The first is a presentation made by the City of Edmonton on May 24th 2011
http://www.gfoa.org/downloads/GFOA_2011AnnualConferenceACCOUNTING_DevelopmentsinGovernmentFinanceACanadianPerspectiveKLSiu.pdf
This paper from Queen's University also backs up the arguments that development does not pay for development.
The Effects of Property Taxes and Development Cost Charges on Urban Development: Perspectives of
Planners, Developers and Finance Officers in Toronto and Ottawa
Andrejs Skaburskis and Ray Tomalty
School of Urban and Regional Planning
http://www.cjrs-rcsr.org/archives/23-2/Skaburskis.pdf
Excerpts from the Growth Management Study on the topic of DCC's are available under the tab GMS 1 and 2 at the top of the page.
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