Oh, Those Darn DCC's

Editorial

Development Cost Charges (DCCs)

Development Cost Charges are a form of levy which developers pay to a municipality to help fund major infrastructure projects which will provide benefit to the new development. The types of infrastructure for which DCCs can be collected, as well as guidance on how DCCs should be calculated, are largely prescribed by the Provincial Government.

Cranbrook's half a million dollar growth Management Study was a foundational document containing information, which would support new Development Cost Charge rates for the City. The proposed DCC rates have however apparently been turned down by the Province.

The initial budget for the City’s $500,000 Growth Management Study was set in 2007 with the work to be carried out in 2008.  The City received it in the summer of 2009 and it was given to Council in September 2010 but then it underwent a staff review to establish accuracy.  It was not presented to the public until 2011.  It took a change in Council and until 2012 to propose the recommended raise in Development Cost Charges.  Cranbrook’s Development Cost charges are very low compared to other municipalities of similar size in the Province and a review was in order.

The Province according to City staff, has not approved the proposed DCC rates which came about as a result of the GMS.  The rationale for the refusal is unclear as no letter of reason was presented at the Council meeting.  In the discussion following the motion to rescind the bylaw recommending the new rates, the City Engineer can be heard to say(City Council Meeting video, ( http://cranbrook.ca/our-city/mayor-and-council/city-council-meeting ) :

"What we ran into in terms of growth- related needs that were identified  ….. The document was a reflection of the times; modelling and analysis, was done in 2007-2008, so we had difficulty justifying some of the growth related needs based on changes in population, growth expectations and on the fact that two very large developments had either failed or were in some form of a limbo situation - but timing of growth related needs, associated with those developments have changed quite drastically.

Then we were asked for justification on some improvements that were being reflected in water and sewer systems and it turns out that quite a number of these water related needs that had been identified had in fact been corrected.  It became apparent that the information is dated.  It was correct at the time.  I don’t think there has been a letter but the indications were that there were problems substantiating the costs, there were problems trying to substantiate the need for some of the storm project costs. Some of the recommendations we don’t know where they came from.  I just couldn’t substantiate them. This just led me to believe the DCC Bylaw as submitted and the report that went with it were going to be rejected basically because the information it is based on, is dated and the information changed too radically.  We need to look our needs and go at it."

It was also stated that there was at the time of the GMS, an expectation by some that growth would be substantial.  The GMS however stated:

“At an average annual growth rate of 1.2%, it would take 57 years for the City to reach a population of 36,000.”

If the predicted growth rate is based on historical growth it is difficult to understand how that statistic could change.

Does staff have a letter of rationale or not?

Major waste-water improvements have been made but are not complete yet although close.

Major water delivery issues and storm projects have not been completed and have they gone away? 

If staff reviewed the document for accuracy why can the infrastructure costs not be substantiated?

Is another study to establish needs really necessary? 

Have the infrastructure needs identified by the Growth Management Study changed that much?

Will a new study also be too be outdated by the time another DCC review is in order?

This doesn’t bode well for taxpayers in the future when improved road construction standards must be met for new subdivisions.  It does not bode well for taxpayers when improved water delivery and storm drainage to new subdivisions is required.  Developers may benefit but these infrastructure needs must be paid for somehow and improved revenue from updated DCC’s was going mitigate that burden just a little.

As new major developments had been approved before any new DCC application was made to the Province and with little chance at this time of any major new development approval, Cranbrook seems destined to continue to have some of the lowest DCC rates in the Province.