TOWN OF MILTON LONG-TERM FISCAL IMPACT ASSESSMENT OF GROWTH Draft For Discussion Purposes

Transcription

1 TOWN OF MILTON LONG-TERM FISCAL IMPACT ASSESSMENT OF GROWTH Draft For Discussion Purposes DECEMBER 6, 2010

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3 CONTENTS Page 1. INTRODUCTION 1.1 Background FORECAST POPULATION, HOUSING, AND EMPLOYMENT GROWTH WITHIN THE TOWN 2.1 Population and Housing Growth, 2011 to Non-residential Growth, 2011 to Conclusions FINANCIAL IMPACT ASSESSMENT 3.1 Overview of Financial Evaluation Capital Requirements FINANCING CAPITAL COSTS 4.1 Summary of Capital Cost Financing Alternatives Development Charges Act, Municipal Act, Grant Funding Availability Debenture Financing Infrastructure Renewal Bonds Capital Financing for Milton Development Charges Capital Provision Other FINANCIAL IMPACT ON EXPENDITURES, REVENUES, TAX RATES AND DEBT CAPACITY 5.1 Introduction Forecast Operating Expenditures and Revenues for Milton Forecast Impact on Development CONCLUSIONS AND RECOMMENDATIONS 6-1 APPENDICES A B C D DETAILED CAPTIAL PROJECT LISTING BY SERVICE OPERATING EXPENDITURE AND REVENUE ANALYSIS TAX RATE AND DEBT CAPACITY SUMMARY RESIDENTIAL AND NON-RESIDENTIAL WEIGHTED ASSESSMENT FORECAST H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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5 1. INTRODUCTION H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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7 INTRODUCTION 1.1 Background The Town of Milton has experienced widely changing growth levels over the past two decades, from a declining population during the mid-1980 s to 2000 (due to water and wastewater servicing constraints) to being quoted as being the fastest growing municipality in Canada. In preparation for growth, the Region, with significant input from the Town, undertook numerous studies during the 1980 s, the Halton Urban Structure Review (HUSR), which examined various options for accommodating anticipated growth in the Region,. This process culminated in the 1990 s with ROPA 8, the Halton Urban Structure Plan (HUSP). HUSP established, among other matters, that Milton would grow from its then current population of approximately 32,000 people to 150,000 people. HUSP also established that this growth would take place in three phased urban expansion areas and provided for a fourth area for employment growth (see map on page 2-4 in chapter 2, denoting these areas). : Phase 1 (Bristol Survey) area generally to the east and south of the pre-husp urban boundary, extending to James Snow Parkway at the east, and midway between Derry Rd. and Britannia to the south (now Louis St. Laurent Blvd). Phase 2 (Sherwood Survey) area generally to the west and south of the pre-husp urban boundary extending from Tremaine Rd. in the west and midway between Derry Rd. and Britannia to the south (now Louis St. Laurent Blvd). Phase 3 (Boyne Survey) extends from the midpoint between Derry/Britannia (now Louis St. Laurent Blvd.) to Britannia in the south with the western and eastern boundaries being Tremaine Rd. and James Snow Parkway, respectively. As noted, given the substantial levels of projected growth (note that the target population for Milton has been revised to over 160,000 people), the Town has undertaken extensive studies to ensure that the growth in the community is well planned and that service levels are maintained at a level that will contribute significantly to the quality of life for all residents. Generally, planning and servicing studies have been undertaken with each phase of development to address these matters. In conjunction with these studies, the Town has also undertaken H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

8 1-2 financial planning studies which have provided a basis for the Town to negotiate financial agreements with developing landowners to assist financially in constructing the infrastructure to maintain quality services for new and existing residents. The first financial agreement was signed with the Phase 1A landowners (Bristol Survey was divided into two sub phases) to allow them to commence development. Subsequently in 2004, the Town entered into its second set of financial agreements with Phase 1B and Phase 2 landowners (note that Milton Heights landowners entered into a financial agreement with the Town at a later date). Over the past four years, the Town has been preparing the planning and servicing studies which would allow the lands within Phase 3 (Boyne Survey) to proceed. In conjunction with the Phase 3 planning process, the Town has also proceeded with a secondary plan process, including servicing studies, to bring on-stream approximately 291 ha of net developable non-residential lands. This secondary plan area is referred to as the Derry Green Corporate Business Park and is generally bounded by the 401 to the north, south of the extension of Louis St. Laurent Blvd. to the south, James Snow Parkway to the west and Sixth Line to the east. has been retained by the Town to assist in the financial evaluation of these secondary plan areas. The study provided herein will address the following elements: capital infrastructure needs and timing for all Town services; capital financing alternatives; operating costs for infrastructure and services to accommodate new population and employment; potential impact on taxpayers over the planning horizon; Provide conclusions and policy recommendations for consideration of Council. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

9 2. FORCAST POPULATION, HOUSING, AND EMPLOYMENT GROWTH WITHIN THE TOWN H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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11 FORECAST POPULATION, HOUSING AND EMPLOYMENT GROWTH WITHIN THE TOWN This Chapter summarizes forecast population, housing, employment and gross floor area (GFA) for the Town of Milton by development area, over the 2011 to 2021 forecast period. Additional details regarding population, housing and non-residential growth are provided in the (draft) Town of Milton 2010 Development Charges Background Study. The residential and nonresidential forecast herein was prepared by Watson & Associates in conjunction with Town staff, based on the following information: Historical residential and non-residential building permit data available over the past 10 years (2001 to Oct. 2010); Review of vacant housing units in the development approvals process and vacant designated residential land (including infill and redevelopment but excluding units or infrastructure associated with the intensification planned for the Urban Growth Centre.) Review of designated net developable vacant commercial and industrial land supply; Discussions with Town staff regarding the growth outlook and phasing of residential/nonresidential development by development area; and Discussions with Halton Region staff regarding the Town of Milton population, housing and employment forecast prepared as part of Accommodating Halton 2009 and the draft 2010 Halton Region Best Planning Estimates (released internally to each of the Region s local municipalities). 2.1 Population and Housing Growth, 2011 to 2021 Table 2-1 summarizes the Town-wide population and housing growth forecast from 2011 to Over this time period: The Town s population is forecast to increase by 78,855 persons from 84,655 in 2011 to 163,510 in 2021; The number of total housing units across the Town of Milton is forecast to reach 57,238, an increase of 28,281 housing units over the 10-year forecast period; and H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

12 New housing development is forecast to be well-balanced across a range of housing density types, with 46% of new units categorized as low density, 31% medium density, and 23% high density. Table 2-1 Town of Milton Summary of Population and Housing Forecast, 2011 to Population 84, , ,510 32,887 78,855 Total Housing Units 28,957 40,731 57,238 11,774 28,281 Low-Density 1 20,959 26,859 34,072 5,900 13,113 Medium-Density 2 5,747 8,509 14,430 2,762 8,683 High-Density 3 2,251 5,363 8,736 3,112 6,485 Percentage Housing Growth by Type Total Housing Units 100% 100% 100% 100% 100% Low-Density 1 72% 66% 60% 50% 46% Medium-Density 2 20% 21% 25% 23% 31% High-Density 3 8% 13% 15% 26% 23% Source: 1 Single and semi-detached units 2 Townhomes and apartments in duplexes 3 Apartments 2-2 Table 2-2 summarizes forecast housing unit growth for the Town of Milton by development area. The following observations can be made: A total of 431 units (43 units per year) are forecast for the pre-husp urban area of Milton over the next 10 years, which represents approximately 2% of total housing growth; Additional longer term infill and redevelopment opportunities (i.e. post 2021) will be explored within the pre-husp area as part of the Town s Official Plan requirements for this area; The Phase 1 development area is now approaching buildout. As such, forecast housing growth for this area represents only 9% of total forecast housing growth for the Town over the next 10 years; Considerable housing growth potential still remains within the Phase 2 area, with approximately 28% of forecast total Town-wide housing growth between 2011 and 2021; Phase 3 (Boyne) will represent the Town s largest residential growth area over the next ten years, with approximately 61% of total housing growth; and Minimal housing growth is forecast for the rural area (average of 6 new units per year). H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

13 2-3 Total Housing Units Average Annual Housing Growth % Housing Growth by Development Area Total Housing Units Average Annual Housing Growth % Housing Growth by Development Area Development Area Rural Milton % % Pre-HUSP Urban Area % % Phase 1 - Bristol 2, % 2, % Phase 2 - Sherwood 5,749 1,150 49% 7, % Phase 3 - Boyne 3, % 17,359 1,736 61% Total 11,774 2, % 28,281 2, % Source: Table 2-2 Town of Milton Summary of Housing Growth by Development Area Map 2-1 geographically illustrates the location of the Town s HUSP and pre-husp urban development areas within the 2021 planning horizon. Maps 2-2 and 2-3 specifically delineate the location of vacant designated residential lands within Phases 1 and 2. Figure 2-1 summarizes the phasing of residential development within the Town over the next 10 years. Key observations include: Phase 1 is forecast to reach full built-out by approximately 2017/2018; Annual housing growth within Phase 2 is forecast to gradually diminish as this area reaches buildout by 2021; and Residential development within Phase 3 (Boyne) is forecast to start in Boyne is also forecast to reach buildout by ,500 Figure 2 1 Town of Milton Phasing of Housing Growth by Development Area 3,000 2,500 Housing Units 2,000 1,500 1, Year Pre HUSP Urban Area Rural Milton Phase 1 Bristol Phase 2 Sherwood Phase 3 Boyne H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

14 2-4 H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

15 MAIN STREET C.P.R. DERRY ROAD M M M M M M M M M M M M M M-850 Town of Milton PHASE 1 - BRISTOL SURVEY Draft Plans of Subdivision Status Last Update: November 16, 2010 STEELES AVE. (Reg. Rd. 8) FIFTH LINE 20M M M-786 THOMPSON ROAD NORTH JAMES SNOW PKWY 20M M M M M M M M M M M M M M M M M-862 FOURTH LINE 20M M M M M M M-941 THOMPSON ROAD SOUTH 20M M M M M M M M M M M M M M M M M M M M-818 Railway Bristol Survey Boundary SUBDIVISION STATUS Development Block Draft Approved Existing Institutional and Open Space Uses Application Received Assumed Subdivision Registered Subdivision Draft Lots 20M M M M M M M M-1076 Map 2-2 REGIONAL ROAD 25

16 Map Map HIGHWAY PHASE 2 - SHERWOOD SURVEY Draft Plans of Subdivision Status TREMAINE ROAD STEELES AVENUE ONTARIO STREET PHASE 2 BOUNDARY APPLICATION RECEIVED DRAFT APPROVED REGISTERED EXISTING INSTITUTIONAL & OPEN SPACE USES DEVELOPMENT BLOCK 166 units Last Update: December 3, 2010 MAIN STREET 20M units 100 units 20M units 20M M M M M M M M M-1021 BRONTE STREET DERRY ROAD ONTARIO STREET 20M-1011 Milton District Hospital Milton Sports Centre 20M M M M-1049 Milton 20M M M M M M M-1082 Community Park LOUIS ST. LAURENT AVENUE

17 2-7 Table 2-3 summarizes the residential phasing schedule for Phase 3 (Boyne) which has been assumed for the purposes of the fiscal impact analysis. A total of 17,359 housing units are forecast for Boyne between 2013 and 2021, which represents an annual forecast of approximately 2,170 units. The forecast phasing schedule (neighbourhood phasing schedule), moving from west to east is as follows: Phase 3a - from Tremaine Road, east to Sixteen Mile Creek; Phase 3b from Sixteen Mile Creek east to James Snow Parkway. Map 2-4 geographically illustrates the phasing schedule for Phase 3 (Boyne) used for purposes of this report. Additional details regarding both the broader phasing schedule and neighbourhood phasing schedule for Boyne are provided in the Town of Milton 2010 DC Background Study Phase Total Housing Units Annual Housing Units % Housing Units Total Housing Units Annual Housing Units % Housing Units Phase 3a Quadrants 1 and 2A 3,270 1,090 91% 3, % Quadrants 2b and 3 west of Bronte Creek % 4, % Phase 3b Quadrant 3 east of Bronte Creek - - 0% 2, % Quadrants 4 and % 6, % Total 3, % 17,359 2, % Source: Table 2-3 Town of Milton Phase 3 Boyne - Phasing Schedule 2.2 Non-residential Growth, 2011 to 2021 Table 2-4 summarizes the Town s employment growth forecast by major employment sector from 2011 to Over the next 10 years: The Town s employment base is forecast to reach 67,694, which represents an increase of 35,929 employees; Of this total, approximately 50% of employment is forecast within the commercial sector (both retail and non-retail), followed by the industrial sector at 36% of total employment growth; and H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

18 Institutional employment is forecast to comprise the remaining 14% of total employment growth for the Town Total Employment 31,765 43,147 67,694 11,382 35,929 Primary (6) Commercial Retail 11,500 15,212 24,194 3,712 12,694 Commercial Non-Retail 2,555 4,362 7,917 1,807 5,362 Industrial 11,134 15,225 23,898 4,091 12,764 Institutional 5,842 7,614 10,957 1,772 5,115 Percentage Employment Growth by Type Total Employment 100% 100% 100% 100% 100% Primary 2% 2% 1% 0% 0% Commercial Retail 36% 35% 36% 33% 35% Commercial Non-Retail 8% 10% 12% 16% 15% Industrial 35% 35% 35% 36% 36% Institutional 18% 18% 16% 16% 14% Source: Table 2-4 Town of Milton Summary of Employment Growth by Major Sector, 2011 to 2021 H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

19 Map A4 Map

20 2-10 Table 2-5 summarizes employment growth by development area within the Town over the 2011 to 2021 forecast period. Key observations include: The Hwy. 401 Business Park (BP I) and Derry Green (BP II) represent the Town s primary employment areas, comprising approximately 50% of total Town-wide employment growth over the next 10 years; Forecast employment within the Hwy. 401 Business Park (BP I) and Derry Green (BP II) is primarily geared toward employment lands (i.e. industrial, office commercial and ancillary commercial retail uses); and The remaining population-related (i.e. retail commercial and institutional) employment growth forecast for the Town has been allocated to Phase 1(Bristol), Phase 2 (Sherwood) and Phase 3 (Boyne) and the pre-husp urban area, generally in accordance with forecast population growth. Maps 2-5 and 2-6 geographically illustrate the location of vacant developable employment lands within Milton 401 Business Park and Derry Green Business Park. Employment by Development Area Employment Allocation by Development Area Employment by Development Area % Employment Allocation by Development Area Development Location Rural Milton - 0% (6) 0% Pre-HUSP Urban Area 412 4% 1,301 4% Phase 1 - Bristol 1,292 11% 4,338 12% Phase 2 - Sherwood 1,938 17% 5,818 16% Hwy. 401 Business Park 1,535 13% 5,518 15% Phase 3 - Boyne 1,743 15% 6,212 17% Derry Green (BP II) 4,462 39% 12,749 35% Total 11, % 35, % Source: Table 2-5 Town of Milton Summary of Employment Growth by Development Location H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

21 Revised: November HIGHWAY 2-11 Map 2-5 ESCARPMENT WAY REGIONAL ROAD 25 Town of Milton Economic Development Phase 1 Business Park Available Land for Development ESQUESING LINE Available for Development Proposed Hwy 401 Interchange* Phase 1 Boundary Future Roads* 401 HIGHWAY Future James Snow Parkway Information contained on this map is subject to change, and should be verified by calling the Economic Development Office at (905) Future Interchange (Tremaine Road and Hwy 401) PERU ROAD REGIONAL ROAD 25 LAWSON ROAD ESQUESING LINE INDUSTRIAL DRIVE MARKET DRIVE STEELES AVENUE Copyright 2010: The Town of Milton, Teranet Inc. This map is for informational purposes only and may contain errors and omissions. Please contact the Economic Development Office for detailed information. THIS IS NOT A LEGAL SURVEY. MARTIN STREET STEELES AVENUE THOMPSON ROAD STEELES AVENUE

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23 2-13 Table 2-6 summarizes forecast non-residential Gross Floor Area (GFA) growth between 2011 and 2021 in accordance with the employment forecast set out in Table 2-4. Over this period, the Town of Milton is forecast to add a total of 25.9 million sq.ft. of non-residential GFA to its base non-residential building inventory. Forecast non-residential GFA has been derived based on the following assumptions regarding average square feet per employee: Employment Sector Average Sq.ft./Employee Industrial 1,100 Commercial 400 Institutional 900 In accordance with the above sq.ft. per employee assumptions, approximately 54% of forecast non-residential GFA has been allocated to the industrial sector. The remaining 46% of forecast non-residential GFA has been allocated to commercial and institutional sectors. Employment Sector Total GFA by Sector % GFA by Employment Sector Total GFA by Sector % GFA by Employment Sector Commercial Retail 1,484,800 18% 5,077,600 20% Commercial Non-Retail 722,800 9% 2,144,800 8% Industrial 4,521,000 54% 14,040,400 54% Institutional 1,594,800 19% 4,603,500 18% Total 8,323, % 25,866, % Source: Table 2-6 Town of Milton Summary of Gross Floor Area by Major Sector, Table 2-7 provides a summary of forecast non-residential GFA by development area in accordance with the employment forecast set out in Table 2-5. Given the relatively high average level of sq.ft. per employee for industrial development, the majority (i.e. 63%) of forecast non-residential GFA is allocated to the Town s industrial business parks (Milton 401 Business Park and Derry Green Business Park). The remaining 37% of forecast non-residential GFA, which largely represents retail commercial and institutional development, has been H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

24 2-14 allocated to Phase 1 (Bristol), Phase 2 (Sherwood), Phase 3 (Boyne) and the Town s existing built-up urban area. GFA by Development Area % GFA Allocation by GFA by Development Development Area Area % GFA Allocation by Development Area Development Location Rural Milton - 0% - 0% Pre-HUSP Urban Area 231,146 3% 672,752 3% Phase 1 - Bristol 627,418 8% 1,988,260 8% Phase 2 - Sherwood 1,208,736 15% 3,320,388 13% Hwy. 401 Business Park 1,441,200 17% 5,267,700 20% Phase 3 - Boyne 891,200 11% 3,405,800 13% Derry Green (BP II) 3,923,700 47% 11,211,400 43% Total 8,323, % 25,866, % Source: Table 2-7 Town of Milton Summary of Gross Floor Area by Development Location 2.3 Conclusions The following conclusions can be drawn regarding forecast residential and non-residential development within the Town of Milton over the 2011 to 2021 planning horizon: The Town s population is forecast to increase steadily as the new greenfield areas such as Phase 2 (Sherwood) and Phase 3 (Boyne) are developed; Annual housing growth is forecast to average approx. 2,828 units per year over the next 10 years, which is above average historical housing growth levels experienced over the past 10 years; The make-up of future housing is forecast to gradually shift from low-density housing forms to more medium and high-density housing forms. Notwithstanding this shift, approximately 46% of new housing development is forecast within the low-density category; The Town s employment base is also forecast to increase steadily, largely given the supply of designated vacant employment lands within the Town along the Hwy. 401 H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

25 2-15 corridor and the adoption of the secondary plan for the Derry Green Corporate Business Park; Steady population growth will also bring a steady increase in population-related employment (i.e. retail/non-retail commercial and institutional), which is forecast to comprise approximately 46% of total employment growth over the next 10 years. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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27 3. FINANCIAL IMPACT ASSESSMENT H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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29 FINANCIAL IMPACT ASSESSMENT 3.1 Overview of Financial Evaluation The approach to this financial evaluation is similar to that undertaken in prior studies for the Town. Figure 3-1 provides a schematic overview of the analysis to be undertaken herein, which is described as follows: Pink Boxes denote the anticipated development within the Town of Milton to the year The lower box denotes the long range forecast which was detailed in Chapter 2. Fuchsia Boxes denote the capital infrastructure needs to service the anticipated development. The capital requirements to support the servicing needs (roads, fire, parks and recreation, etc.) were developed and validated with input from various departmental staff. These needs were derived from numerous background studies including ENTRA s transportation reports dated December, 2010; Monteith Brown Planning Consultants Analysis of Parkland & Recreation Facility Needs within the Boyne Secondary Plan report dated November 2010, with input from Cosburn Giberson; as well as the Town s existing Trails Master Plan, Fire Master Plan, Library Master Plan, previous transportation reports, sub-watershed plans, etc. The resultant capital needs are detailed in Appendix A and are summarized in latter sections of this chapter. Financing methods for funding the infrastructure are discussed in Chapter 4. For the purpose of this analysis, any unfunded capital infrastructure is generally assumed to be funded from property taxes (either by direct contributions or by debenturing). Orange Boxes denote the additional operating expenditures anticipated over time. These costs have been assessed on two different bases: operating costs related to infrastructure and operating costs related to population/employment. The former identifies the specific operating costs anticipated to be incurred as additional infrastructure (i.e. roads, facilities, etc.) is constructed. The latter identifies program expenditures which are linked to population and employment growth. Blue Boxes denote anticipated operating revenues commensurate with growth. The upper box identifies the additional assessment anticipated as residential, commercial and industrial building activity occurs over the forecast period. This new assessment H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

30 3-2 gives rise to additional property tax revenue. The lower box identifies non-tax revenues such as user fees, permits, licences, etc., which are anticipated to grow in concert with population and employment growth. Yellow Box denotes the overall financial impact on property taxes over the forecast period. It is this impact that Council has directed be minimized, which is discussed further in Chapter 5. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

31 Figure 3-1 Overview of Financial Model 3-3 H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

32 Capital Requirements As part of the process for this financial evaluation, detailed discussions were undertaken with Town staff and various outside consultants who prepared the background studies which identify future infrastructure to service new growth. Regard was given to the location, timing, and amount of growth commensurate with each of the growth areas. Evolving from this process was a comprehensive list of capital requirements which is provided in Appendix A. As the financial evaluation extends out over a ten year forecast period, consideration was also given to existing infrastructure which may require replacement, maintenance or upgrades. Discussions with staff on the lifecycle costs of Town assets were also undertaken. A summary of the growth related capital needs is provided in Table 3-1 along with a provision for non-growth related capital works for the forecast period. A discussion on each service is provided below. Executive Services Executive Services capital requirements relate to the general administration operations and corporate initiatives (i.e. strategic plans for the Town, ward boundary reviews, needs related to future elections and economic development initiatives). The total capital cost for Executive Services is estimated at $2.5 million for the forecast period Corporate Services Corporate Services capital requirements relate to specific initiatives and studies to support the Corporate Services Department (i.e. Finance, Human Resources, Purchasing, etc.) and include needs to service future growth, growth related financial analysis including future DC studies, and human resources initiatives. The project total capital cost for Corporate Services is estimated at $0.77 million for the forecast period H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

33 TABLE 3-1 TOWN OF MILTON CAPITAL EXPENDITURE FORECAST Service Description Capital Cost (2010$) Executive Services Executive Services 2,524,000 Corporate Services Corporate Services 769,600 Community Services Civic Facilities 25,000,000 Community Services Parkland Development 105,667,473 Community Services Parks & Recreation Studies 1,409,700 Community Services Recreation Services 124,488,921 Engineering Services Engineering Studies & Misc. 264,700 Engineering Services Rural Roads 2,794,900 Engineering Services Major Roads 286,193,931 Engineering Services Sidewalks 35,385,000 Engineering Services Bridges/Culverts 61,983,428 Engineering Services Asphalt Overlay Program 31,049,100 Engineering Services Traffic Services 2,641,100 Engineering Services Transportation (Facilities & Vehicles) 35,896,024 Engineering Services Parking Services 11,850,700 Engineering Services Transit 23,203,300 Engineering Services Stormwater Management Monitoring 2,545,600 Planning & Development Services Planning & Development Services 4,335,800 Fire Services Facilities 10,892,422 Fire Services Vehicles 2,125,086 Fire Services Equipment 339,500 Library Services Facilities 19,533,900 Library Services Collection Material 8,320,000 Library Services Furnishings 890,100 Various Services Computer Equipment 8,277,000 Hospital Hospital 40,000,000 Various Services Non-Growth Related Capital 96,461,925 Total 944,843, Community Services: Civic Facilities Community Services Department oversees the future needs for civic facilities, including the general administrative facility of the Town. In regard to administrative facility needs, a study was completed by EDA Collaborative Inc., dated July 2003 which presented the location and phasing needs for this service based upon the approved population forecast in With the revisions to the growth forecast, the phasing and cost estimates have been updated based on the costs of the recently completed expansion to Town Hall. The estimated total cost of $25 million provides for the next phase of expansion to the Town Hall facility. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

34 3-6 Parks The capital forecast provides for the growth related works that are outstanding in Phases 1 & 2 of the urban area along with the non-growth parks requirements (i.e. replacement of amenities, continued implementation of the Town s trails master plan, and improvements/redevelopment to existing parkland) related to other areas within the Town. These projects were identified through discussions with Town staff and were based on the standards development by Monteith Brown Planning Consultants. In addition the capital needs for Phase 3 (Boyne) and Derry Green parkland development were costed by Cosburn Giberson Landscape Architects. The total parkland development capital needs for the forecast period is $ million. It is noted that the growth related trails in the Derry Green Secondary Plan, as identified by Cosburn Giberson, have been scaled back through discussions with staff, however they may be included subsequently should Sustainable Halton growth targets be considered further. The total amount (in 2010$) that has been removed from this analysis is $5,348,800. Recreation Future capital requirements relating to recreation were identified by Town staff based on service level standards developed by Monteith Brown Planning Consultants. The service level standards are contained within their report, Analysis of Parkland & Recreational Facility Needs within the Boyne Secondary Plan, dated November, The total recreation capital needs for the forecast period is $ million. The identified growth related needs, including any outstanding infrastructure for Sherwood and Bristol, include eight additional ice surfaces (including the completion of the expansion to the Milton Sports Centre), three additional aquatic facilities, three additional gymnasiums, and other multi-use community space. As well, an indoor soccer facility has been identified within the report. Lastly, for DC financing purposes, we have included the total amount of existing outstanding debt (discounted) for the Milton Sports Centre in the capital costs. Parks and Recreation Studies Capital requirements relating to parks and recreation studies have been identified for future growth, implementation strategies, master plans/updates to master plans, and various other areas of concern such as needs for youth. The total cost of studies identified for the forecast period is approximately $1.41 million. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

35 3-7 Engineering Services: Studies & Miscellaneous Works Future capital requirements have been identified by Town staff in the amount of $264,700 over the forecast period. Capital needs include studies required for future growth and updates to the Town s engineering standards. Roads The total cost of the road needs is $420 million over the forecast period. The capital needs identified for growth are contained in the transportation background report undertaken by ENTRA. The capital road needs identified in the capital forecast also include the replacement, upgrade and/or expansion of rural roads, major roads, sidewalks, bridges and structures, traffic services and the asphalt overlay/surface treatment program. Transportation (Facilities & Vehicles/Equipment) Discussions with staff identified the need for additional facility space for the forecast period. The need for facility space includes the replacement of the current Nippising works yard and a future expansion of space at the new location. The capital needs for operations vehicles include the replacement of existing vehicles & equipment as well as providing for additional vehicles & equipment to service growth over the forecast period. The operations department services roads, parks and recreation. The total capital needs is $35.9 million over the forecast period. Parking With the growth over the forecast period staff have recognized that there is a need to expand the amount of parking available throughout the Town, but primarily in the downtown core. Discussions with staff identified that both additional surface spaces along with a multilevel parking facility will be required to accommodate future needs. The estimated cost identified is $11.85 million, including a vehicle for parking enforcement. Transit Transit capital needs were identified for the Boyne and Derry Green surveys as part of the transportation work undertaken by ENTRA. These capital needs were reviewed by Town staff and refined for both vehicles and facility space where necessary for inclusion in the capital forecast. As well, discussions with staff were undertaken to ensure that the forecast period includes additional vehicles and facility space required to service the existing urban areas (including the completion of the Bristol and Sherwood surveys and the 401 industrial park). The total capital costs identified for inclusion in this analysis is $23.2 million. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

36 3-8 Stormwater Management In accordance with the Town s Local Service Policy, stormwater quality and quantity management works are considered a direct developer responsibility. The Town however, is responsible for stormwater management monitoring programs. As with the prior secondary plans, these monitoring programs have been included in this assessment and are assumed to be fully funded from area specific development charges within each of the secondary planning areas. The capital needs provided herein were developed by AMEC Earth & Environmental based on discussions with Conservation Halton. The total amount of stormwater monitoring included in the capital forecast is $2.55 million which relates to the Sherwood, Boyne and Derry Green Secondary Plans.. Planning and Development Planning capital requirements consist of various study costs associated with development within the Town over the forecast period. These include masterplan updates, secondary plans, reviews & updates to the Town s official plan and zoning by-law, etc. The total costs projected over the forecast period are $4.34 million. Fire The capital needs for fire services arise from the recommendations of the Town s Fire Masterplan and discussions with staff. To accommodate growth, an additional fire station (No. 5) has been identified for the forecast period. As well, it has been determined that Station No. 3 will require replacement and expansion to accommodate growth. This facility will also accommodate the relocated fire administration. Further, Station No. 1 will be renovated to provide upgrades as well as to convert a portion of the building into a training facility. The total cost of works related to the facilities totals $10.89 million. Provision has also been made to accommodate the debt payments for Station No. 4. New vehicles, equipment and gear have been identified for the additional fire station along with the outstanding debt on vehicles for Station No. 4, all totalling $2.46 million over the forecast period. Library Future capital requirements for Library were identified through discussions with staff along with the needs outlined in the Monteith Brown report, Analysis of Parkland & Recreational Facility Needs within the Boyne Secondary Plan, dated November The library capital needs for the 2011 to 2021 forecast period total $28.74 million. Of this amount, the construction of two additional library branches and the completion of the replacement & expansion of the main library are included. A further provision for the expansion of space required to service growth has also been included. Furnishings and technological equipment H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

37 3-9 replacements and expansion have also been identified by Library staff for inclusion over the forecast period. Finally, the library collection will require expansion over the forecast period to service growth. Various Services (Computer Equipment) - The Town s technological initiatives to service future growth have been identified and budgeted for under the various services including the library. The total cost of computer equipment required over the forecast period is $8.28 million. Non-Growth Related Capital As the fiscal impact report extends to 2021, the analysis incorporates both new needs to accommodate growth (noted above) as well as needs for the existing residents. The non-growth related capital requirements were identified by town staff and provides for rehabilitation and replacement needs of existing infrastructure for all services. The forecast provides for a total of $96.46 million. Hospital The Town has been approached by Halton Healthcare Services to assist in funding a portion of a potential expansion of the existing Milton District Hospital facility, should it be approved by the Province. The Town passed a resolution in June of 2010 that provided that the Town of Milton is committed to providing a municipal contribution to Halton Healthcare Services for the expansion to Milton District Hospital. The resolution also required that consideration be given in the 2011 budget to the establishment of a new Reserve Fund and revenue generation options to initiate the financing of the Town of Milton s contribution towards the Local Share of the redevelopment of the Milton District Hospital. Consistent with the resolution passed by Council, a $40 million capital contribution has been included in this analysis. Note that only 50% has been considered as a possible contribution by the Town with 50% potentially being contributed by developers. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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39 4. FINANCING CAPITAL COSTS H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

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41 FINANCING CAPITAL COSTS 4.1 Summary of Capital Cost Financing Alternatives Historically, the powers which municipalities have had to raise alternative revenues to taxation to fund capital services have been restrictive. Over recent years, legislative reforms have been introduced. Some of these have expanded municipal powers (e.g. Bill 26 introduced in 1996 to provide for expanded powers for imposing fees and charges), while others appear to restrict them (Bill 98 in 1997 providing amendments to the Development Charges Act). The Province passed a new Municipal Act - the Municipal Act, which came into force on January 1, Part XII of the Act and O.Reg. 584/06, govern a municipality s ability to impose fees and charges. In contrast to the previous Municipal Act, this Act provides municipalities with broadly defined powers and does not differentiate between fees for operating and capital purposes. Under s.484 of the Municipal Act, 2001, the Local Improvement Act was repealed effective January 1, The municipal powers granted under the Local Improvement Act are now contained in O.Reg. 390/02. The methods of capital cost recovery available to municipalities are provided as follows: SECTION RECOVERY METHODS REFERENCE Development Charges Act, Municipal Act 4.3 o Fees and Charges o Sewer and Water Area Charges o Connection Fees o Local Improvements H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

42 Development Charges Act, 1997 In November, 1996, the Ontario Government introduced Bill 98, a new Development Charges Act. The Province s stated intentions were to create new construction jobs and make home ownership more affordable by reducing the charges and to make municipal Council decisions more accountable and more cost effective. The basis for this Act is to allow municipalities to recover the growth-related capital cost of infrastructure necessary to accommodate new growth within the municipality. Generally the new Act provided the following changes to the former Act. Replace those sections of the 1989 DCA which govern municipal development charges. (Education development charges are not to be significantly altered at this time.) Limit services which can be financed from development charges, specifically excluding parkland acquisition, administration buildings, and cultural, entertainment, tourism, solid waste management and hospital facilities. Ensure that the level of service used in the calculation of capital costs will not exceed the average level of service over the previous decade. Level of service is to be measured from both a quality and quantity perspective. Provide that uncommitted excess capacity available in existing municipal facilities and benefits to existing residents are removed from the calculation of the charge. Ensure that the development charge revenues collected by municipalities are spent only on those capital costs identified in the calculation of the development charge. Require municipalities to contribute funds (e.g. taxes, user charges or other nondevelopment charge revenues) to the financing of certain projects primarily funded from development charges. The municipal contribution is 10 percent for services such as recreation, parkland development, libraries, etc. H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

43 4-3 Permit (but apparently not require) municipalities to grant developers credits for the direct provision of services identified in the development charge calculation and, when credits are granted, require the municipality to reimburse the developer for the costs the municipality would have incurred if the project had been financed from the development charge reserve fund. Set out provisions for front-end financing capital projects (limited to essential services) required to service new development. Set out provisions for appeals and complaints, and transitional rules, including that municipalities will have up to 18 months from the date of proclamation of the new Act to establish new development charge by-laws, otherwise the old by-laws will expire. 4.3 Municipal Act, Part XII of the Municipal Act, 2001 provides municipalities with broad powers to impose fees and charges via passage of a by-law. These powers, as presented in s.391(1), include imposing fees or charges: for services or activities provided or done by or on behalf of it; for costs payable by it for services or activities provided or done by or on behalf of any other municipality or local board; and for the use of its property including property under its control Restrictions are provided to ensure that the form of the charge is not akin to a poll tax. Any charges not paid under this authority may be added to the tax roll and collected in a like manner. The fees and charges imposed under this part are not appealable to the OMB s.221 of the previous Municipal Act, permitted municipalities to impose charges, by bylaw, on owners or occupants of land who would or might derive benefit from the construction of sewage (storm and sanitary) or water works being authorized (in a Specific Benefit Area). For a by-law imposed under this section of the previous Act: H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

44 4-4 A variety of different means could be used to establish the rate and recovery of the costs that could be imposed by a number of methods at the discretion of Council (i.e. lot size, frontage, number of benefiting properties, etc.); Rates could be imposed in respect to costs of major capital works, even though an immediate benefit was not enjoyed; Non-abutting owners could be charged; Recovery was authorized against existing works, where a new water or sewer main was added to such works, "notwithstanding that the capital costs of existing works has in whole or in part been paid;" Charges on individual parcels could be deferred; Exemptions could be established; Repayment was secured; and OMB approval was not required. The Municipal Act, 2001 contains no specific provisions similar to the previous s.221, however capital cost recovery through fees and charges is embraced within s.391. The Municipal Act, 2001 also maintains the ability of municipalities to impose capital charges for water and sewer services on landowners not receiving an immediate benefit from the works. Under s.391(2) of the Act, a fee or charge imposed under subsection (1) for capital costs related to sewage or water services or activities may be imposed on persons not receiving an immediate benefit from the services or activities but who will receive a benefit at some later point in time. Also, capital charges imposed under s.391 are not appealable to the OMB on the grounds that the charges are unfair or unjust S..222 of the previous Municipal Act permitted municipalities to pass a by-law requiring buildings to connect to the municipality's sewer (including storm water management) and water H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

45 4-5 systems, charging the owner for the cost of constructing services from the mains to the property line. Under the Municipal Act, 2001 this power still exists under Part II, General Municipal Powers (s.9(3)b). Enforcement and penalties are contained in s.427(1) of the Municipal Act Under the previous Local Improvement Act: A variety of different types of works could be undertaken, such as watermain, storm and sanitary sewer projects, supply of electrical light or power, bridge construction, sidewalks, road widening and paving. Council could pass a by-law for undertaking such work on petition of a majority of benefiting taxpayers, on a 2/3 vote of Council and on sanitary grounds, based on the recommendation of the Minister of Health. The by-law was required to go to the OMB, which might hold hearings and alter the by-law, particularly if there were objections. The entire cost of a work was assessed only upon the lots abutting directly on the work, according to the extent of their respective frontages, using an equal special rate per metre of frontage. As noted, this Act was repealed as of April 1, 2003; however, O.Reg. 119/03, made under the Municipal Act, 2001, was enacted on April 19, 2003 which restores many of the previous Local Improvement Act provisions, 4.4 Grant Funding Availability Since the early 1980 s, the level of Provincial and Federal assistance toward municipal infrastructure has declined significantly. By the mid 1990 s, there were very limited funds available from senior levels of government. In mid-2000, initiatives from the Provincial and Federal level were announced; providing for a new program (OSTAR) to assist small cities, towns and rural areas in addressing infrastructure improvements. In November 2004, another program (COMRIF) was introduced which also provided combined assistance from the senior governments until early Subsequently Federal and Provincial Funding have been made available under the Build Canada Fund and Stimulus Fund Programs. Under the specific H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx

46 requirements of these recent programs, the projects must be shovel ready and are allocated on a case by case basis Debenture Financing Although it is not a direct method of minimizing the overall cost to the taxpayer, debentures are used by municipalities to assist in cash flowing large capital expenditures. The Ministry of Municipal Affairs regulates the level of debt incurred by Ontario municipalities, through its powers established under the Municipal Act. Ontario Regulations 403/02 provides the current rules respecting municipal debt and financial obligations. Through the rules established under these regulations, a municipality s debt capacity is capped at a level where no more than 25% of the municipality s own purpose revenue may be allotted for servicing the debt (i.e. debt charges). Hence, proper management of capital spending and the level of debt issued annually must be monitored and evaluated over the longer-term period. 4.6 Infrastructure Renewal Bonds Infrastructure Ontario (IO) is an arms length crown corporation, which has been set up as a tool to offer low-cost and longer-term financing to assist municipalities in renewing their infrastructure (this corporation has merged the former OSIFA into its operations) IO combines the infrastructure renewal needs of municipalities into an infrastructure investment pool. IO will raise investment capital to finance loans to the public sector by selling a new investment product called Infrastructure Renewal Bonds to individual and institutional investors. IO provides access to infrastructure capital that would not otherwise be available to smaller borrowers. Larger borrowers receive a longer term on their loans than they could obtain in the financial markets, and can also benefit from significant savings on transaction costs such as legal costs and underwriting commissions. Under the IO approach, all borrowers receive the same low interest rate. IO will enter into financial agreement with each municipality subject to technical and credit reviews, for a loan up to the maximum amount of the loan request. The first round of the former OSIFA s infrastructure renewal program was focused on municipal priorities of clean water infrastructure, sewage treatment facilities, municipal roads H:\Milton 01\2010 FI\Report - Dec 6\2010 FI Report - Dec docx