DEVELOPMENT CHARGES BACKGROUND STUDY

Transcription

1 DEVELOPMENT CHARGES BACKGROUND STUDY Revised City of Mississauga C o n s u l t i n g L t d. September 2009

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3 TABLE OF CONTENTS EXECUTIVE SUMMARY... 1 I INTRODUCTION II METHODOLOGY IS BASED ON A CITY-WIDE APPROACH A. City-wide Development Charges Are Proposed B. Key Steps in Determining Development Charges for Future Growth-related Projects C. Debt Outstanding for Ineligible Services III POPULATION IN NEW HOUSING UNITS IS FORECAST TO INCREASE BY NEARLY 56,500 AND NON-RESIDENTIAL BUILDING SPACE BY 2.64 MILLION SQUARE METRES BY A. Residential Forecast B. Non-residential Forecast IV SUMMARY OF HISTORIC SERVICE LEVELS V THE GROWTH-RELATED CAPITAL FORECAST A. A Growth-related Capital Forecast Is Provided for Council's Approval B. The Growth-related Capital Forecast VI PROPOSED DEVELOPMENT CHARGES ARE CALCULATED IN ACCORDANCE WITH THE DCA A. Development Charges Calculation B. Proposed Residential and Non-residential Development Charges C. Comparison of Calculated Development Charges to Current Rates VII LONG-TERM CAPITAL AND OPERATING COSTS A. Net Operating Costs for the City s Services to Increase by $16.2 Million over the Forecast Period B. Long-term Capital Financing from Non-development Charges Sources Totals $204 Million VIII DEVELOPMENT CHARGES ADMINISTRATION APPENDICES

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5 1 EXECUTIVE SUMMARY The following summarizes the findings of this revised Development Charges Study for the City of Mississauga. (i) BACKGROUND On June 24, 2009, Mississauga City Council approved the 2009 Development Charges (DC) By-law , based on the calculations found in the May 2009 DC Background Study. The City received an appeal from the Building Industry and Land Development Association (BILD) and another from Amacon Development (City Centre) Corp. (Amacon) following the passage of By-law In holding a consultation session with BILD, and through further discussions with City staff, it was determined that the best course of action would be to repeal the 2009 DC By-law, produce a revised DC Background Study and pass a new DC Bylaw. Through these discussions, four major issues were identified by either BILD, City staff or Hemson, which formed the basis for the recommendation to repeal the 2009 DC By-law. The four issues can be summarized as follows: Inclusion of the Living Arts Centre (LAC) in the Recreation historical service level calculation; Inclusion of the Central Library parking in both the Library and Parking historical service level calculation; Incorrect average Person Per Unit (PPU) factor applied to the Other Residential unit type in calculation of the rate for that category; and Basing the employment forecast on net employment rather than employment growth in new non-residential space. While a number of issues will still need to be addressed through further discussion with the development industry, the calculations found in this revised background study correct the foregoing issues and will form the basis for the passage of the new 2009 DC By-law.

6 2 (ii) THE STUDY IS CONSISTENT WITH THE DEVELOPMENT CHARGES LEGISLATION This study calculates development charges for the City of Mississauga in compliance with the provisions of the Development Charges Act, 1997 (the DCA) and its related regulation Ontario Regulation 82/98 (O.Reg. 82/98). (iii) ALL SERVICES WITH GROWTH-RELATED COSTS ARE INCLUDED IN THE ANALYSIS The following City services have been included in the development charges analysis: General Government Library Fire Recreation Transit Public Works (Buildings & Fleet) Living Arts Centre (Debt Recovery) Parking Roads (and related infrastructure) and Storm Water Management (iv) THE GROWTH FORECAST COVERS THE PERIODS AND Two growth forecast periods are included in the study: and The 10-year period, , forms the basis for calculating development charges for all services except Roads and Storm Water Management. The longer forecast period, , is used for the Roads and Storm Water Management services. The growth forecast used in the study is based on the forecasts prepared by Hemson entitled Long-Range Forecasts, City of Mississauga, and adopted by Council in April It should be noted that the growth projections used in the Development Charges Background Study will show a variance from those in the Long-Range Forecasts, City of Mississauga, report. This variance reflects the inclusion of an estimated 4 per cent net undercoverage factor in the Long-Range Forecasts, City of Mississauga, report which is not included in the development charge forecast.

7 3 The City s population in new housing units is forecast to increase by about 56,500 over the next ten years and by 115,000 over the period. The population is forecast to reach about 732,200 by 2018, and 777,500 by Employment in new non-residential floor space is forecast to increase by about 55,650 over the next ten years. Between 2009 and 2031, an increase of about 91,500 employees in new floor space is forecast. By 2018, an additional 2.64 million square metres of non-residential building space (gross floor area) is forecast. Between 2009 and 2031, a total of 4.16 million square metres is forecast to be added. (v) A CITY-WIDE APPROACH IS USED TO CALCULATE DEVELOPMENT CHARGES A City-wide average cost approach is used to calculate development charges for all City services. For all services except Storm Water Management the charges will be imposed on housing units (differentiated by housing unit type) and on gross floor area (GFA) of non-residential building space. Storm Water Management development charges will be imposed on the basis of net developable land area.

8 4 (vi) A PORTION OF GROWTH-RELATED COSTS REQUIRES FUNDING FROM NON-DEVELOPMENT CHARGES SOURCES The following is a summary of the growth-related capital program for nonengineered services. However, of the $270.3 million net capital cost, only $195.1 million will be recovered from development charges. DC Total Recoverable General Services Net Share Cost (1) ($000) ($000) 1. General Government $6,252.1 $3,684.5 Recovery of Reserve Fund Shortfall $5,143.1 Capital Program $1, Library $20,340.0 $12, Fire Department $15,303.9 $11,288.1 Recovery of Reserve Fund Shortfall $8,604.9 Capital Program $6, Recreation $130,657.7 $102,212.8 Recovery of Oversized Hershey Centre Debt $7,644.1 Capital Program $123, Transit $52,327.0 $43, Public Works $22,185.0 $11, Living Arts Centre Debt $2,009.1 $1, Parking $16,000.0 $7,833.2 Total - Ten Year Services $265,074.8 $194,354.0 Recovery of Reserve Fund Shortfall Incl LAC Debt $23,401.2 Capital Program $241,673.6 (1) Net costs exclude a $4.2 million share has been identified which is represented by a recovery for the Training and Mechanical Centre for Fire as this building will be shared with the Peel Regional Police and the Department of National Defence. In addition, a $1.0 million donation form a local business group for the development of Zonta Meadows Park has been identified. The DCA requires that the growth-related net capital costs for most of these services be reduced by 10 per cent in calculating the applicable development charge (with the exception of Fire). The 10 per cent share of growth-related net capital costs not included in the development charges calculation must be funded from non-development charges sources. In total, $20.3 million is identified to provide for the required 10 per cent reduction.

9 5 A portion of the capital program is deemed to provide service to growth which has already occurred in the City and for which development charges have been paid. This portion of the capital program totals $11.1 million for all non-engineered services. A share of the capital forecast relates to portions of projects that will service growth in the post-2018 period (for which future development charges could be collected) or represents a service level increase. In total, about $33.0 million is allocated to this category. This amount can be funded from future development charges, but interim financing would need to be provided until post-2018 development charges could be collected. A non-growth share of $6.3 million has been identified for Recreation. This share is for cash-in-lieu contributions applied to the renovation of the Meadowvale Community Centre. The following summarizes the growth-related capital programs for the engineered services. Slightly under $506.2 million of the net capital cost of $724.7 million is to be recovered from development charges over the period. The balance of $218.5 million will require funding from non-development charges sources. DC Total Recoverable Engineered Services Net Share Cost (2) ($000) ($000) 9. Roads $495,552.3 $435, Storm Water Management $229,103.6 $70,756.7 Total - Twenty-three Year Services $724,655.9 $506,161.5 (2) Net costs exclude $17.5 million of which: $14.1 million relates to roads and related cost-sharing agreements with Brampton (for a grade separation project) and by works done by developers through subdivision agreements. In addition, $3.4 million is identified as a developer contribution for a stormwater conveyance project. Non-development charges funding for replacement portions of the capital forecast and for portions of growth-related projects that benefit existing development totals $144.3 million for the Storm Water Management and Roads Services. These portions of capital costs would have to be funded from non-development charges revenue sources.

10 6 A portion of the capital program provides service to growth which has already occurred in the City and for which development charges have been paid. The existing development charges and lot levy reserve fund balances for the engineered services total $74.2 million. This amount will be applied to fund a portion of the capital program. In addition to the portions of capital costs that will require funding from nondevelopment charges sources (as described above), it is estimated that net annual operating costs will increase by about $16.2 million by 2018 as the facilities and infrastructure embodied in the capital forecast are operated and maintained. These costs would be funded from the increase in property tax revenue generated by new development. (vii) CALCULATED DEVELOPMENT CHARGES ARE HIGHER THAN EXISTING CHARGES The calculated residential charge is recommended to vary by unit type, reflecting the different occupancy levels expected in various unit types and the associated differences in demand that would be placed on City services. Based on the growthrelated capital programs contained in this background study, new residential development charges have been calculated as follows: Service Charge Per Capita RESIDENTIAL DWELLINGS Small Apartment Other Units <70 m 2 Units Residential Percentage of Total General Government $50.04 $65.05 $ $ % Library Board $ $ $ $ % Fire Services $ $ $ $ % Recreation $1, $2, $4, $5, % Transit $ $ $ $1, % Public Works $ $ $ $ % LAC Debt $37.59 $48.87 $93.98 $ % Parking $77.07 $ $ $ % Roads $2, $2, $5, $6, % Total Charge $4, $6, $12, $16, % Based on a population per unit of Roads charge based on a population per unit of 3.20

11 7 In addition to the above charges, a uniform Storm Water Management development charge of $77,000 per net developable hectare is proposed to apply to both residential and non-residential development. The Storm Water Management charge will apply only to those lands that are not within a pre-existing registered plan of subdivision or do not have a waiver under pre-dca agreements. The calculated residential charge for Apartment Units represents an increase of 46 per cent over the City s current charge and that for Other Residential Units, an increase of 36 per cent. The calculated non-residential charge is recommended to apply to two property types, industrial and non-industrial (as in the City s current by-law).the following is a summary of the fully calculated non-residential non-industrial charge: Non-Residential Non-Industrial Percentage of Service Charge Total per m 2 of GFA General Government $ % Library Board $ % Fire Services $ % Recreation $ % Transit $ % Public Works $ % LAC Debt $ % Parking $ % Roads $ % Total Charge $ % For non-industrial uses (e.g. retail, office), the calculated rate of $64.55 per square metre is $12.06 (23 per cent) higher than the current rate of $52.49 per square metre.

12 8 The calculated non-residential industrial charge is proposed as follows: Non-Residential Industrial Percentage of Service Charge Total per m 2 of GFA General Government $ % Library Board $ % Fire Services $ % Recreation $ % Transit $ % Public Works $ % LAC Debt $ % Parking $ % Roads $ % Total Charge $ % At $52.49 per square metre of GFA, the calculated charge for industrial uses represents an increase of $9.84 (23 per cent) over the current rate of $42.65 per square metre of GFA. The percentage split between the non-industrial and industrial development charges has been maintained at 23 per cent as per the 1999 and 2004 Development Charges by-laws. (viii) DEVELOPMENT CHARGES ADMINISTRATION It is recommended that present practices regarding collection of development charges and by-law administration continue to the extent possible. As required under the DCA, the City should continue to codify any rules regarding application of the development charges within the by-law proposed for adoption. It is recommended that the City continue its reporting policies consistent with the requirements of the DCA.

13 9 It is recommended that the proposed by-law permit the payment of a development charge in cash or through services-in-lieu agreements. The municipality is not obligated to enter into services-in-lieu agreements. It is recommended that Council adopt in principle the growth-related capital forecast included in this background study, subject to annual review through the City s normal capital budget process. The in principle adoption of the growth-related capital forecast will signify Council s intention to ensure that the increase in need for services attributable to growth will be met as required under the DCA, s.5.(1) 3. It is recognized, however, that specific projects and project timing as contained in the forecast included in this study may be revised from time to time at the discretion of Council. The proposed 2009 Development Charges By-law will maintain transition rules consistent with past practices where if a complete application for a building permit has been submitted to the City s Chief Building Official on or before December 4, 2009 and where the building permit is issued on or before April 30, 2010, the applicant would pay the development charges rates in effect under the 2004 Bylaw.

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15 10 I INTRODUCTION This City of Mississauga Development Charges Background Study is presented as part of a process to lead to the approval of a new development charges by-law in compliance with the Development Charges Act, 1997 (DCA). On June 24, 2009, Mississauga City Council approved the 2009 Development Charges (DC) By-law based on the results found in the May 2009 Development Charges Background Study. After the passage of the 2009 DC By-law, the City received two appeals prior to the expiry of the appeal period of August 4: one from the Building Industry and Land Development Association (BILD) and the other from Amacon Development Corp. While a number of issues will still need to be addressed, after reviewing the appeal issues, four major issues were identified by either BILD, Hemson or City staff that are addressed in this revised Development Charges Background Study. After reviewing the resulting changes, staff are recommending the repeal of By-law This revised 2009 Development Charges Background Study, incorporating corrections to the four major issues, will form the basis for passing a new 2009 DC By-law. The four main changes addressed in the revised study are summarized as follows: Removal of non-recreation program space included in the Living Arts Centre (LAC) historical service level calculation for Recreation; Removal of the Central Library parking space in the historical service level calculations for the Library service to eliminate the double count of parking space which are included in the Parking service; Revising the average Persons Per Unit (PPU) factor applied to the Other Residential unit type in the calculation of the charge for that category; and Basing the employment forecast on employment in new space, rather than on net employment growth. By identifying and correcting these matters in this revised Background Study, the City can ensure that the calculation of the development charge is appropriate. As a result of

16 11 addressing these issues, a number of modifications are now included in this revised development charges calculation. The DCA and Ontario Regulation 82/98 (O. Reg. 82/98) require that a development charges background study be prepared in which development charges are determined with reference to: A forecast of the amount, type and location of housing units, population and non-residential development anticipated in the City; The average capital service levels provided in the City over the 10-year period immediately preceding the preparation of the background study; A review of future capital projects and growth-related oversized projects already emplaced, including an analysis of gross expenditures, funding sources, and net expenditures incurred or to be incurred by the City or its local boards to provide for the expected development, including the determination of the growth and non-growth-related components of the capital projects; and An examination of the long-term capital and operating costs for the capital infrastructure required for each service to which the development charges by-laws would relate. This study presents the results of the review of these factors which lead to the determination of the growth-related net capital costs attributable to development that is forecast to occur in the community. These growth-related net capital costs are then apportioned among various types of development (residential, non-residential) to arrive at proposed development charges. The DCA provides for a period of public review and comment regarding the proposed development charges. Following completion of this process in accordance with the DCA and Council s review of this study and the comments it receives regarding this study or other information brought to its attention about the proposed charges, it is intended that Council will pass new development charges for the City. The remainder of this study sets out the information and analysis upon which the proposed development charges are based.

17 12 Section II designates the services for which the development charges are proposed and the areas within the City to which the development charges will apply. It also reviews the methodologies that have been used in this background study. Section III presents a summary of the forecast residential and non-residential development expected to occur within the City over the period and over the longer period (the longer-term forecast is utilized as the basis for Roads and Storm Water Management capital plans as allowed under the DCA). Section IV summarizes the historic 10-year average capital service levels that have been attained in the City which form the basis for the development charges calculations. In Section V, the growth-related capital forecast that has been developed by various City departments (for some services, in conjunction with consultants) is identified. Section VI summarizes the calculation of applicable development charges and the resulting proposed development charges by class and type of development. Section VII provides an examination of the long-term capital and operating costs for each service included in the development charges calculation. Section VIII provides a review of development charges administrative matters.

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19 13 II METHODOLOGY IS BASED ON A CITY-WIDE APPROACH Several key steps are required in calculating any development charge. However, specific circumstances arise in each municipality which must be reflected in the calculation. In this study, therefore, the approach is tailored to the City of Mississauga s unique circumstances. The approach to the proposed development charges is focussed on providing a reasonable alignment of growth-related costs with the development that necessitates them. This study recommends a City-wide average cost approach for all services. A. CITY-WIDE DEVELOPMENT CHARGES ARE PROPOSED Mississauga provides a wide range of services to the community. These services are supported by an extensive inventory of facilities, land, infrastructure, vehicles and equipment. The DCA permits municipalities to define services that will be included in their development charges by-law, provided that its other provisions, as well as those of O. Reg. 82/98, are met. The DCA also permits municipalities to choose whether a by-law will apply to a specific area or all lands within the municipality. Mississauga has chosen to apply a uniform charge (differentiated by land use type) to all lands within the City. For the services that Mississauga provides, a range of capital facilities and infrastructure is available for use by all residents and businesses throughout the City: recreation facilities, libraries, fire stations, arterial roads, parks, etc. As new development occurs, new facilities and infrastructure will need to be added so that overall service levels in the City do not decline. A widely accepted method for sharing the growth-related capital costs for such City services, and the one that has been used historically in Mississauga, is to apportion them over all new anticipated growth.

20 14 The following services are included in the City-wide development charges calculation: General Government Library Fire Recreation Transit Public Works (Buildings & Fleet) Living Arts Centre Debt Parking Roads (and related infrastructure) and Storm Water Management These services form a reasonable basis for planning and administration of development charges. It is noted that the analysis of each of these services examines the individual capital facilities and equipment that make them up. For example, the Fire service includes various buildings, fire fighting vehicles and associated land requirements as allowed under the DCA. The resulting development charges for these services would be imposed against all development throughout the City. B. KEY STEPS IN DETERMINING DEVELOPMENT CHARGES FOR FUTURE GROWTH-RELATED PROJECTS Several key steps are required in calculating development charges for future growth-related projects. These are summarized below. 1. Growth Forecast The first step in the methodology requires a development forecast to be prepared for the 10-year study period, , and for a longer period to 2031 for the Roads and Storm Water Management components of the analysis. The forecast of the future residential and non-residential development by location used in this study is based on the forecast prepared by Hemson entitled Long-Range Forecasts, City of Mississauga,

21 15 For the residential portion of the forecast, the new population that will result from the addition of new housing units is estimated. This population estimate determines the need for additional facilities and provides the foundation for development of the growth-related capital forecast. In calculating the development charge, the growth-related net capital costs are spread over the total additional population growth resulting from the addition of new housing units. This represents the population over which residential development charges will be collected. The non-residential portion of the forecast estimates the GFA of new building space to be developed over the 10-year period, , and to build-out, The forecast provides estimates for three categories: population-related development, major office development, and employment land development. The forecast of GFA is based on land consumption and the employment forecast for the City. Factors for floor space per worker by category are used to convert the employment forecast into gross floor areas for the purposes of the development charges study. 2. Service Categories and Historic Service Levels The DCA states that the increase in the need for service attributable to anticipated development:... must not include an increase that would result in the level of service exceeding the average level of that service provided in the municipality over the 10-year period immediately preceding the preparation of the background study...(s. 5. (1) 4.) For services excluding Storm Water Management, historic 10-year average service levels form the basis for development charges. A review of the City s capital service levels for buildings, land, vehicles and other capital assets has therefore been prepared as a reference for the calculation in order to determine the extent to which future capital projects may be included in the development charges. The historic service levels used in this study have been calculated based on the period For Storm Water Management, historic service levels are less applicable and reference is made to the City s engineering standards as well as Provincial regulatory and conservation standards. Furthermore, historic service levels were calculated for roads using vehicles per lane and lane kilometres per 1,000 population and employment as a measure. 3. Growth-related Capital Forecast and Analysis of Net Capital Costs to Be Included in the Development Charges A growth-related capital forecast has been prepared by the City s departments with the assistance of outside consulting firms for Roads and Storm Water Management. The forecast identifies growth-related projects and their gross and net costs, after allowing for capital grants, subsidies or other contributions as required by the DCA, s.5.(2). It is

22 16 noted that there are no grants or subsidies included but there are subsidies for works done by developers through subdivision agreements for roads projects and a cost sharing agreement with the City of Brampton for a grade separation project. A developer contribution for a conveyance storm water project is also expected. The capital forecast provides another cornerstone upon which development charges are based. The DCA requires that the increase in the need for service attributable to the anticipated development may include an increase:... only if the council of the municipality has indicated that it intends to ensure that such an increase in need will be met (s. 5. (1) 3.). This, in conjunction with the DCA s.5.(1)4. referenced above, has the effect of requiring that development charges be calculated on the lesser of the historic 10-year average service levels or the service levels embodied in the future plans of the City. The growth-related capital forecast prepared for this study ensures that development charges are only imposed to help pay for projects that are intended to be purchased or built in order to accommodate future anticipated development. It is not sufficient in the calculation of development charges merely to have had the service in the past. There must also be a demonstrated commitment to continue to emplace facilities or infrastructure in the future. In this regard, O. Reg. 82/98, s.3. states that: For the purposes of paragraph 3 of subsection 5 (1) of the Act, the council of a municipality has indicated that it intends to ensure that an increase in the need for service will be met if the increase in service forms part of an official plan, capital forecast or similar expression of the intention of the council and the plan, forecast or similar expression of the intention of the council has been approved by the council. For some projects in the growth-related capital forecast, a portion of the project may confer benefits to existing residents. As required by the DCA s.5.(1)6., these portions of projects and their associated net costs are the funding responsibility of the City from non-development charge sources. The amount of non-development charge funding for such non-growth shares of projects is also identified as part of the preparation of the growth-related capital forecast. There is also a requirement in the DCA to reduce the applicable development charges by the amount of any uncommitted excess capacity available for a service. Such capacity is available to partially meet the future servicing requirements. Adjustments are made in the analysis to meet this requirement of the DCA. Finally, in calculating development charges, the growth-related net capital costs must be reduced by 10 per cent for all services except Storm Water Management, services related to highways and Fire (DCA, s.5. (1) 8). The 10 per cent discount is applied to other services, e.g. Recreation, and the resulting City funding responsibility from non-development charges revenue sources is identified.

23 17 4. Attribution to Types of Development The next step in the determination of development charges is the allocation of the growth-related net capital costs between the residential and non-residential sectors. This is done by using different apportionments for different services in accordance with the demands which the two sectors would be expected to place on the various services and the different benefits derived from them. Some services (Recreation, Library and LAC Debt) are deemed to provide benefit only to the residential sector, while other services are deemed to benefit both the residential and non-residential sectors. The apportionment of costs for these latter services is based on the expected demand for, and use of, the service by each sector (e.g. transit apportioned based on shares of population in new units and employment in new space) and consideration of other factors affecting the demand for specific municipal services. Finally, for all services except Storm Water Management, the residential component of the development charge is calculated based on the population to be generated in new housing units during the respective planning periods and the per capita amount determined is applied to different housing types on the basis of average occupancy factors. The non-residential component is calculated based on the growth that is forecast in non-residential gross building space in square metres. For Storm Water Management, a uniform charge is calculated for both sectors based on allocating the growth-related net capital costs to the net developable residential and non-residential land remaining in the City that has not yet been registered in a plan of subdivision (and for which development charges remain to be paid). 5. Final Adjustment The final determination of the development charges results from adjustments made to growth-related net capital costs for each service and sector resulting from a cash flow analysis that takes account of the timing of projects and receipt of development charges. Interest earnings or borrowing costs are therefore accounted for in the calculation as allowed under the DCA.

24 18 C. DEBT OUTSTANDING FOR INELIGIBLE SERVICES Under the DCA, a number of services that were included in the pre-1999 by-laws are ineligible for future development charges. However, an exception is provided by the DCA for instances where a municipality had incurred debt for an ineligible service. In such cases, the repayment and interest cost of that obligation may be included in the development charges if the requirements outlined in s.18 of O. Reg. 82/98 are met. The internal borrowing incurred by the City in respect of the Living Arts Centre meets these requirements and is therefore included in the development charges calculation.

25 19 III POPULATION IN NEW HOUSING UNITS IS FORECAST TO INCREASE BY NEARLY 56,500 AND NON-RESIDENTIAL BUILDING SPACE BY 2.64 MILLION SQUARE METRES BY 2018 This section provides the basis for the growth forecasts used in calculating the development charges and provides a summary of the forecast results. The forecast is based on the report prepared by Hemson entitled Long-Range Forecasts, City of Mississauga, Details of the forecast for development charges purposes are provided in Appendix A. Table 1 provides a summary of the growth forecast for two planning periods: a 10-year planning period, , and a 23-year period, The 10-year planning period is used throughout this study for the City s soft services (including Fire). The 2031 development forecast has been utilized for the calculation of the Roads and Storm Water Management components of the development charge. A. RESIDENTIAL FORECAST The City s population in new housing units is expected to increase by nearly 56,500 over the next ten years. Overall, the population is expected to reach about 732,200 by 2018 after accounting for the expected decline in population in the existing housing stock. The population is forecast to reach slightly over 777,500 by The 10-year growth in population will be accommodated in nearly 21,500 new housing units and the growth to 2031 in about 45,700 new housing units. The population in new units referred to above reflects the gross increase in population. The importance of this to the development charges calculation is that the increase in need for services is related to the anticipated development in the new housing units.

26 20 B. NON-RESIDENTIAL FORECAST The non-residential space forecast prepared for development charges purposes is summarized also in Table 1. Approximately 2.64 million m 2 of new building space is forecast to come on-stream over the next decade. During the period , it is forecast that 4.16 million m 2 will be added. Table 1 also provides a summary of the employment forecast for the period and to Over the next ten years, employment in new non-residential floor space is projected to grow by nearly 55,700 employees. Between 2019 and 2031, a further 35,900 employees are forecast to be accommodated in the new non-residential floor space.

27 21 TABLE 1 SUMMARY OF GROWTH FORECAST RESIDENTIAL DEVELOPMENT Mid-Year Forecast As at Forecast As at 2008 Change Mid-Year 2018 Change Mid-Year 2031 Population in Existing Units 683,581 (7,778) 675,803 (21,591) 661,990 Housing Units 221,216 21, ,701 45, ,876 Forecast Population in New Units 56,433 56, , ,518 Total Population 683,581 48, ,236 93, , NON-RESIDENTIAL DEVELOPMENT Mid-Year Forecast As at Forecast As at 2008 Change Mid-Year 2018 Change Mid-Year 2031 Forecast of Non-Residential Building Space (sq. m) n.a. 2,643,000 n.a. 4,164,630 n.a. Net Employment 443,191 46, ,331 75, ,988 Employment in New Space 55,654 55,654 91,491 91,491

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29 22 IV SUMMARY OF HISTORIC SERVICE LEVELS The DCA and O. Reg. 82/98 require that the development charges be set at a level no higher than the average service level provided in the municipality over the 10-year period immediately preceding the preparation of the background study. For non-engineering services (Fire, Library, Recreation, etc.), the legislative requirement is met by documenting historic service levels for the preceding ten years, in this case, for the period Typically, service levels for non-engineering services are measured as a ratio of inputs per capita. For roads and related infrastructure, engineering standards and indicators of road network service levels are also used. Storm water management projects are designed to meet standards approved through engineering reviews, reports and analysis as well as Ministry/conservation authority standards and principles. O. Reg. 82/98 requires that, when defining and determining historical service levels, both quantity and quality of service be taken into consideration. In most cases, the service levels are initially established in quantitative terms. For example, service levels for buildings are presented in terms of square feet per capita. The qualitative aspect is introduced by the consideration of the monetary value of the facility or service. In the case of buildings, for example, the cost would be shown in terms of dollars per square foot to replace or construct a facility of the same quality. This approach helps to ensure that the growth-related capital facilities that are to be charged to new growth reflect not only the quantity (number and size) but also the quality (value or cost) of service provided historically by the City. Both the quantitative and qualitative aspects of service levels used in the present analysis are based on information provided by City staff and consultants based on historical records and the City s experience with costs to acquire or construct similar facilities, land, equipment and infrastructure. Table 2 summarizes service levels for all City services included in the development charges calculation. Appendices B through J provide detailed historical inventory data upon which the calculation of service levels is based.

30 23 TABLE 2 HISTORIC AVERAGE SERVICE LEVELS BY SERVICE COMPONENT SERVICE Historic 10 Year ( ) Average Service Level GENERAL GOVERNMENT $26.63 /pop & emp LIBRARY BOARD $ /capita - Buildings 0.55 sq. ft./capita - Land 0.08 ha/10,000 pop - Materials $59.21 /capita FIRE SERVICES $ /pop & emp - Buildings 0.14 sq. ft./pop & emp - Land 0.08 ha/10,000 pop & emp - Furniture and Equipment $4.83 /pop & emp - Vehicles $29.53 /pop & emp RECREATION $2, /capita - Major Facilities 2.58 sq. ft./ capita - Land for Major Facilities 1.02 ha./10,000 pop - Parkland Development 2.67 ha./10,000 pop - Park Facilities $ /capita - Special Facilities /capita PUBLIC WORKS $ /pop & emp - Buildings 0.2 sq. ft./pop & emp - Land 0.19 ha/10,000 pop & emp - City Fleet /pop & emp TRANSIT SERVICES $ /pop & emp - Buildings 0.41 sq. ft./pop & emp - Buses $ /pop & emp PARKING $77.65 /pop & emp - Spaces spaces/10,000 pop & emp - Meters meters/10,00 pop & emp ROADS & RELATED $3, /pop & emp STORM WATER MANAGEMENT Based on Engineering & Regulatory Standards

31 24 V THE GROWTH-RELATED CAPITAL FORECAST A. A GROWTH-RELATED CAPITAL FORECAST IS PROVIDED FOR COUNCIL'S APPROVAL The DCA requires the Council of a municipality to express its intent to provide future capital facilities at the level incorporated in the development charges calculation. As noted above in Section II, O. Reg. 82/98 s. 3 states that: For the purposes of paragraph 3 of subsection 5 (1) of the Act, the council of a municipality has indicated that it intends to ensure that an increase in the need for service will be met if the increase in service forms part of an official plan, capital forecast or similar expression of the intention of the council and the plan, forecast or similar expression of the intention of the council has been approved by the council. Based on the growth forecasts summarized in Section III and detailed in Appendix A, City staff with the assistance of outside consultants for roads and storm water management developed a growth-related capital forecast identifying those projects that are required to service anticipated growth for the 10-year period and, for Roads and Storm Water Management, One of the recommendations contained in this background study is for Council to adopt the growth-related capital forecast developed for the purposes of the development charges calculation. It is assumed that future capital budgets and forecasts will continue to bring forward the growth-related projects contained in this study that are consistent with the growth occurring in the City. It is acknowledged that changes to the forecast presented in this document and schedules may occur through the City s normal capital budget process. B. THE GROWTH-RELATED CAPITAL FORECAST A summary of the growth-related capital forecast is shown in Table 3. The table provides a separate total for services analysed over the 10-year period, , from the roads and storm water management programs which are analysed to Further details on the capital plans for each individual service category are available in Appendices B through K.

32 25 TABLE 3 GROWTH-RELATED CAPITAL FORECAST Page 1 Net Gross Subsidy/Other Capital Cost Revenue Cost Total Net Capital Forecast ($000) Service ($000) ($000) ($000) SERVICES General Government $1,109.0 $0.0 $1,109.0 $0.0 $0.0 $0.0 $0.0 $508.0 $201.0 $0.0 $0.0 $0.0 $400.0 Growth Studies $1,109.0 $0.0 $1,109.0 $0.0 $0.0 $0.0 $0.0 $508.0 $201.0 $0.0 $0.0 $0.0 $ Library $20,340.0 $0.0 $20,340.0 $100.0 $648.0 $2,876.0 $2,876.0 $0.0 $0.0 $0.0 $0.0 $904.0 $12,936.0 Library Buildings & Land $18,440.0 $0.0 $18,440.0 $100.0 $648.0 $2,876.0 $2,876.0 $0.0 $0.0 $0.0 $0.0 $904.0 $11,036.0 Materials $1,900.0 $0.0 $1,900.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $1, Fire Department $10,943.1 $4,244.1 $6,699.0 $0.0 $6,574.0 $38.0 $0.0 $0.0 $42.0 $0.0 $0.0 $45.0 $0.0 Fire Buildings $10,818.1 $4,244.1 $6,574.0 $0.0 $6,574.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Land for Fire $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Fire Studies $125.0 $0.0 $125.0 $0.0 $0.0 $38.0 $0.0 $0.0 $42.0 $0.0 $0.0 $45.0 $ Recreation $124,013.6 $1,000.0 $123,013.6 $3,442.0 $11,561.0 $10,659.0 $11,981.1 $1,505.0 $9,894.0 $28,595.0 $16,090.0 $13,563.3 $15,723.3 Parkland Development $75,893.5 $1,000.0 $74,893.5 $2,666.0 $2,525.0 $722.0 $2,548.5 $1,325.0 $7,980.0 $26,607.0 $14,509.0 $10,076.0 $5,935.0 Park Facilities $9,293.6 $0.0 $9,293.6 $57.0 $147.0 $7.0 $6,048.6 $180.0 $467.0 $0.0 $465.0 $1,600.0 $322.0 Special Facilities $22,472.5 $0.0 $22,472.5 $221.0 $2,738.0 $2,430.0 $1,372.0 $0.0 $1,266.0 $1,976.0 $1,116.0 $1,887.3 $9,466.3 Major Facilities $16,161.0 $0.0 $16,161.0 $498.0 $6,151.0 $7,500.0 $2,012.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Studies $193.0 $0.0 $193.0 $0.0 $0.0 $0.0 $0.0 $0.0 $181.0 $12.0 $0.0 $0.0 $ Transit $52,327.0 $0.0 $52,327.0 $3,643.0 $4,134.0 $4,769.0 $6,114.0 $10,117.0 $7,932.0 $3,837.0 $3,837.0 $3,972.0 $3,972.0 Conventional Fleet $36,184.0 $0.0 $36,184.0 $3,136.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 $3,672.0 Other Vehicles $485.0 $0.0 $485.0 $60.0 $95.0 $60.0 $60.0 $35.0 $35.0 $35.0 $35.0 $35.0 $35.0 Equipment $580.0 $0.0 $580.0 $150.0 $70.0 $80.0 $40.0 $40.0 $40.0 $40.0 $40.0 $40.0 $40.0 Fareboxes $1,438.0 $0.0 $1,438.0 $162.0 $162.0 $412.0 $162.0 $90.0 $90.0 $90.0 $90.0 $90.0 $90.0 Shelters, Loops, Signs $945.0 $0.0 $945.0 $135.0 $135.0 $135.0 $135.0 $135.0 $0.0 $0.0 $0.0 $135.0 $135.0 Terminals $12,695.0 $0.0 $12,695.0 $0.0 $0.0 $410.0 $2,045.0 $6,145.0 $4,095.0 $0.0 $0.0 $0.0 $0.0

33 26 TABLE 3 GROWTH-RELATED CAPITAL FORECAST Page 2 Net Gross Capital Total Net Capital Forecast Cost Sub / Rec Cost ($000) Service ($000) ($000) ($000) Public Works $22,185.0 $0.0 $22,185.0 $6,350.0 $350.0 $950.0 $525.0 $525.0 $525.0 $505.0 $5,365.0 $505.0 $6,585.0 Work Yard Space $16,960.0 $0.0 $16,960.0 $6,000.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $4,860.0 $0.0 $6,100.0 Storage Facilities $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Works Yard Equipment $1,760.0 $0.0 $1,760.0 $200.0 $200.0 $200.0 $180.0 $180.0 $180.0 $160.0 $160.0 $160.0 $140.0 Municipal Fleet $1,965.0 $0.0 $1,965.0 $0.0 $0.0 $600.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 Winter Maintenance Equipment Allowance $1,500.0 $0.0 $1,500.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $ Parking $16,000.0 $0.0 $16,000.0 $0.0 $1,000.0 $15,000.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Parking Structure Design $1,000.0 $0.0 $1,000.0 $0.0 $1,000.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Parking Structure Construction $15,000.0 $0.0 $15,000.0 $0.0 $0.0 $15,000.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 TOTAL TEN-YEAR SERVICES $246,917.7 $5,244.1 $241,673.6 $13,535.0 $24,267.0 $34,292.0 $21,496.1 $12,655.0 $18,594.0 $32,937.0 $25,292.0 $18,989.3 $39,616.3 SERVICES Roads $509,665.4 $14,113.1 $495,552.3 Arterial Roads $149,517.1 $2,367.5 $147,149.6 Major Collector Road System $151,803.7 $3,745.6 $148,058.1 Grade Separations $46,000.0 $8,000.0 $38,000.0 Bicycle Facilities $86,700.0 $0.0 $86,700.0 Stand Alone Noise Walls $1,499.0 $0.0 $1,499.0 Stand Alone Sidewalks $21,781.6 $0.0 $21,781.6 Studies $7,062.0 $0.0 $7,062.0 Traffic Signals & Intersection Improvements $45,302.0 $0.0 $45, Storm Water Management $232,536.1 $3,432.5 $229,103.6 Erosion Control $110,777.5 $0.0 $110,777.5 Conveyance $22,187.0 $3,432.5 $18,754.5 Storm Water Ponds $90,310.6 $0.0 $90,310.6 Oversizing $4,701.0 $0.0 $4,701.0 Studies $4,560.0 $0.0 $4,560.0 TOTAL SERVICES $742,201.5 $17,545.6 $724,655.9 TOTAL ALL SERVICES $989,119.2 $22,789.7 $966,329.5

34 27 The growth-related capital forecast for 10-year City services includes projects at an estimated gross cost of $246.9 million. The net cost for 10-year services totals $241.7 million after allowing for the inclusion of $4.2 million in recoveries for the Fire Training Centre as it will be shared with the Peel Regional Police and the Department of National Defence. A $1.0 million donation from a local business group for the development of Zonta Meadows Park has also been identified. Over the period, the road and related infrastructure program totals $509.7 million gross and $495.6 million net, and the storm water management program totals $232.5 million gross and $229.1 million net. As already noted, no senior government grants or subsidies are anticipated, but developer contributions to the roads and storm water management programs total about $14.1 million and $3.4 million respectively. This capital forecast incorporates those projects identified to be related to growth anticipated over the next ten years and to 2031 for roads and storm water management. It is not implied that all of these costs are to be recovered from new development by way of development charges (see the following Section VI for the method and determination of net capital costs attributable to growth). Portions of this capital forecast may relate to prior growth (for which existing development charges and lot levy reserve fund balances are available), for shares of projects that provide benefit to the existing community or for growth anticipated to occur beyond the planning period. In addition, the amounts shown in Table 3 have not been reduced by 10 per cent for various soft services as mandated by s.5(1)8. of the DCA. Of the $241.7 million in 10-year growth-related net capital costs, $123.0 million (50 per cent) is related to Recreation services. The program includes all aspects of the recreation services provided by the City with a large focus on parkland development ($74.9 million). The remainder of the recreation capital program includes provisions for additional outdoor park facilities, playing fields, the renovation and expansion of the Meadowvale Community Centre, and various growth-related studies. The next largest capital program at $52.3 million is related to the provision of Transit services. The capital program reflects the addition of 80 new buses, the construction of a satellite terminal in Meadowvale, other vehicles, transit radio systems, fare boxes and shelters, loops and signs.

35 28 The other 10-year capital programs include: Library Services at $20.3 million; Fire Services at $6.7 million; Public Works at $22.2 million; Parking, which is a new service, at $16.0 million; and General Government (growth studies) at $1.1 million. In addition to the growth-related capital forecast for 10-year City services, sections 9 and 10 of Table 3 show estimates of $495.6 million net and $229.1 million net for roads and related infrastructure and for storm water management respectively. The roads program provides for road widenings, grade separations, traffic signals, bicycle facilities, standalone noise walls, stand-alone sidewalks and studies as detailed in Appendix J. The storm water management program includes land and construction costs for storm water management ponds in various locations throughout the City, for stormwater conveyance, downstream erosion control works, stormwater ponds, allowance for oversizing credits and studies (see Appendix K for details).

36

37 29 VI PROPOSED DEVELOPMENT CHARGES ARE CALCULATED IN ACCORDANCE WITH THE DCA This section summarizes the calculation of development charges for each service and the resulting total development charge by type of development. For all services except Storm Water Management, the calculation of the unadjusted 1 per capita (residential) and per square metre (non-residential) charges is reviewed. Adjustments to these amounts resulting from a cash flow analysis that takes into account interest earnings and borrowing costs are also discussed. For Storm Water Management, the development charge is calculated on the basis of net developable land, whether residential or non-residential. A uniform per hectare charge is calculated. For residential development, the adjusted total per capita amount is then converted to a variable charge by housing unit type using various unit occupancy factors. The person per unit (PPU) applied to the large and small apartments are consistent with the factor used in the 2004 DC Background Study, while taking into consideration the Census data for apartment units built in the period. The PPU factor applied to the Other Residential unit type represents a weighted average of the singles, semis and rows unit type. For non-residential development, uniform charges per square metre of gross floor area are calculated for industrial and non-industrial development for all services except roads. The non-residential rate for roads is differentiated for industrial and non-industrial development so that the overall industrial and non-industrial charges maintain the same relative relationship to each other as the rates under the 2004 by-law (non-industrial charge is 23 per cent higher than the industrial). It is noted that the calculation of the development charges does not include any provision for exemptions required under the DCA, for example, the exemption for enlargements of up to 50 per cent on existing industrial buildings. Such legislated exemptions, or other exemptions which Council may choose to provide, will result in a loss of development charges revenue for the affected types of development. Any such 1 The term unadjusted development charge is used to distinguish the charge that is calculated prior to the cash flow analysis.