All those pesky development charges paid by builders– and ultimately homebuyers – are being put to good use according to the 2015 development charges report presented to Woolwich council Tuesday night.
Council was shown the status of the township’s development charges reserve fund as of Dec. 31, 2015 with a final total of just under $4.3 million. This is slightly lower than the opening balance of the reserve on Jan. 1, 2015 of $4.5 million.
Their total influx brought them up to $4.9 million with $295,942 in developer contributions and $82,716 in interest earnings. A number of studies, and road and bridge construction projects used roughly $600,000 from the reserve.
Woolwich’s director of finance, Richard Petherick, says there’s definitely growth happening within the township.
“We do know that Lunor will continue to pick up and continue to go forward. We do have the Southwood subdivision, that’s going to be taking off. And then of course with the final Breslau settlement plan and the approval of it, and then in turn when they start building out with the new phases for the Empire or the Riverland subdivision and then the Thomas subdivision down in Breslau that will all be contributing to the development charges,” Petherick said.
Development charges are assessed against land development projects to help cover the cost of capital infrastructure necessary due to growth. They’re calculated based on a background study, which is required every five years. Woolwich’s last one was done in 2014.“The works that we have really centre either around studies that are leading into potential infrastructure and then of course there’s also growth related infrastructure that it’s going to be spent on. You’re talking stuff like bridges, road reconstructions and all of those that are occurring is because these are areas with which growth is touching,” Petherick said.
Some of the studies paid for through last year’s development charges include the Breslau secondary plan study ($69,139) and the roads needs study update ($13,915).
A fire prevention truck was fully funded at $36,713 from the reserve.
The priciest on the list is hot mix resurfacing for $251,385. That’s also helped from a separate fund, the infrastructure reserve fund for $650,509. Woolwich Street reconstruction cost $41,105. The capital bridge program received $87,325.
“We have some expenditures for the Woolwich Street reconstruction in 2015 that we’re going to have the big reconstruction occurring in 2016. The tender’s already been approved. And there’s some significant development charge dollars coming from that because it is with regards to doing some upgrading to the sewer system, some road works to be able to accommodate the growth that’s occurring in that area. So that’s a good example of some of the uses development charges are for,” Petherick said.
He says their development charges balance is pretty healthy. If one department is a little short they can borrow internally from another to complete a project. They have to report on each of the categories, such as fire, public works, and water, separately.
“When you do your background study part of the analysis is looking at what growth is going to occur and when is it going to occur. And of course if that doesn’t occur in the timeline you think it’s going to occur it does put some pressure on the growth-related projects and the fact you may not be able to do those because you won’t have the development charge money in hand.”
When doing the background study they look at the growth forecast and the expenditures they can expect in the future. When they’re looking at any given service area they have to examine the 10-year historical service level and that calculation actually starts to determine what the maximum amount is that you can collect for any given category.
“So say, for example, our service level says over the next five years you can only collect up to $1 million in development charges. And we say but we’ve got $1.5 million worth of work to do, we can still only put $1 million in our background study. We are kind of restricted as to what it is you can collect and it’s based on the 10-year historical service level. But you can definitely go underneath that,” Petherick explained.
The Development Charges Act underwent some amendments late last year, adding some reporting requirements. Luckily for Woolwich they were already doing some of them.
“Before you could summarize to say these are the categories we had… here’s the money that went in, here’s the interest that we earned and in summary form here’s the total amount we spent out of each of the areas, without specifically identifying what projects you were actually spending it on. We have been identifying what projects we spend it on at least since I’ve been here and I’ve been here 12, 13 years now.”
They’re also required to identify each of the projects being assisted by development charges, what other sources of funding they were receiving, and how much – all of which they’d already been doing.
“And that comes back to transparency,” Petherick said.