SAF/DL Policy and Rate Review & Final Phasing and Financing Plan Project Growth-Related Capital Projects List Review Session NOTES April 20, 2015

Transcription

1 SAF/DL Policy and Rate Review & Final Phasing and Financing Plan Project Growth-Related Capital Projects List Review Session NOTES April 20, 2015 Purpose of the Workshop Review and discuss the Growth-Related Capital Project Lists (including cost allocations for the projects) to inform the development of the final version for use in this project. OBJECTIVES: A clear description of what has changed with the Project Lists since the previous version (i.e. December 2014) is provided; Questions about the Project Lists are addressed, or next steps are identified; Concerns are shared and recorded to inform the development of a final Project List for use in the preferred model scenario; and Understanding of the projects and associated cost allocations is strengthened. Participant List Bill Babey SCR Holdings Graham Haines City of Regina Bob Berry Stantec Jeffrey Halliday WSP Bob Brockmeyer WSP Group Katherine Godwin Dream Bob Belmore MMM Group Kim Sare City of Regina Chad Jedlic Harvard Kurtis Doney City of Regina Charlie Toman City of Regina Lorne Yagelniski Yagar Clayton Drewlo Urban Systems Munir Haque Harvard Cliff Geiger Geiger Developments Paul Moroz Daytona David Milliken City of Regina Saleem Memon City of Regina Doug Moran Gabriel Housing Corp Scott Thomas City of Regina Doug Rogers Terra Developments Shanie Leugner City of Regina Geoff Brown City of Regina Stu Niebergall RRHBA George Tsougrianis Stantec Tammy McLean RRHBA ACTIONS For All Project Lists - Add a column to the lists to indicate if the project would still go forward if growth stopped tomorrow. Transportation Project List - Review TMP report to consider inclusion of aspects that make citizens more aware that level of service will decrease through the plan s implementation and as the city grows. 1

2 - Consider City-benefit for certain projects, including Project #72 Pasqua - Ring Road Interchange. - Review EMME model to determine if there is anticipated to be remaining capacity to serve growth beyond 300K (i.e. to serve future growth). Parks & Recreation Project List - Share the population threshold for parks to explain how zone level parks are identified (i.e. when does a new area get assigned to build a zone level park?). Also, clarify why rinks are specifically identified and other amenities are not (i.e. basketball nets, soccer pitches, etc.). - Review Project #23 (Arcola Ave Streetscape Woodland Grove to Chuka) to determine why it is a 40% SAF - 60% Developer split (as per the 2015 capital budget) o Developer notes that this area is already done/fully developed - Review Project #17 (New Douglas Park Support Facility and Parking Lot Expansion and confirm that this project is included because there was a cost over-run on the artificial turf field and therefore this piece, which was a part of the original plan/budget, did not get built (i.e. estimate was off so this is making up the difference). Drainage Project List - Update title for Project #23 to be consistent with the notes (i.e. change from MR2 to MR8 and MR 10 ). - Fix title for Greens on Gardner spelling mistake (i.e. change from Gardner to Gardiner. - Consider area-specific rates for drainage/some drainage projects. - Update Drainage List Gross Cost column as it all the items are added, including those in red that were actually being shown as deleted. - Remove ONLY reference for Project #81 from the Greenfield SAF cost column (it currently is added into that column when it should be assigned to Infill ONLY). Wastewater (WW) Project List - Update Project #6 (SE WWTP Study) refer to Project 4 not Confirm that for Project #4 that it is reasonable to charge 30% to infill. - Review Project #4 to consider that Westerra and Coopertown may not go through the system and therefore whether it is fair that they pay twice: i.e. to conduct WW internal to development and through SAF via this project. 2

3 It was noted that this could be managed if other major projects that they would be doing that are currently identified as Internal to Development should instead be considered SAF e.g. lift stations. Other General Actions - Review list of development-specific projects identified Interim Plan to that Phasing & Financing Project List which has been created through this process to create an apples to apples comparison. - Define Infill (show the boundaries) - Review infill projects and determine how the rate can be reduced while considering the conversion factor. o Option to Consider: Allocating downtown projects 30% SAF and 70% Infill. - Consider different rates for 235K and 300K or phasing 235K areas to be charged the same as the 300K neighbourhoods. - Consider impact of GTH on city-industrial development and the degree the rate may be a factor. - Consider creating flexibility in the timing for developers to pay SAFs and Development-Specific charges. o Currently: 1/3 of payment is due at signing, then another 1/3 at 9 months and the last 1/3 at 18 months - Consider creating a base rate and then adding a surcharge as was done during the Interim Plan process (perhaps for certain infra components, like WW). Interest Identified for Future Discussions - Amortization of the model over a longer period - Prioritizing the Project Lists - Process for collecting for infill e.g. a separate fund and a way to track this over time. - Clarity on what is regional (definition) came up during drainage discussion - Debt limit on the reserve and impacts it has on the rate, phasing, etc. - Phasing of growth 3

4 NOTES General Overview (refer to slides) The following are comments and questions made following the presentation. - The Transportation Master Plan (TMP) is scheduled to go to Executive Committee on May 13 th and to Council on May 25. o Suggestion was made for the report to advise that level of service will decrease with this plan as the population of Regina grows. - The TMP was designed for 100% capacity. - Clarification that the overall reduction of the total Project List cost since it was last circulated included both SAF and developer-specific projects. - Clarification that Urban Systems, as part of this project, will be recommending a regular Project List Review schedule e.g. It is likely that the Lists will be reviewed upon completion of major studies, such as the Water and Wastewater Master Plans that are to be undertaken shortly. Review of Transportation Project List (refer to slides) - Comments for specific Projects are recorded on the Project List for Transportation. - Other comments are as follows: o Generally suggest that the Project Lists reviewed should accommodate new growth not old growth. o Noted that within this list, 28.3% of projects were shifted to the developer to fund; only 6.3% was shifted to the City s share. o Concern that pulling arterials from the SAF Model creates hurdles for developers; however, cash flow challenges can still can exist if the City does not have funds to build projects. o Clarify that when YES is included in the spreadsheet under the Infill column, it means that 30% of the cost of that project is being allocated to an Infill SAF/DL. Recognize that infill is buying into the system. o GENERAL NOTE: The lists with these columns identified (i.e. who is being charged and at what allocation) is a helpful change. o If the City receives provincial or federal funding, where do these costs come off? Clarified that the only project with funding identified is for the interchanges; only the City-share is identified in the list (as 4

5 such, the funding from other levels of government was taken off the total cost). How funding would be dealt with for other projects would depend on the type of funding program and their associated rules related to allocation. Review of Parks and Recreation Project List (refer to slides) - Comments for specific Projects are recorded on the Project List for Parks and Recreation. - Other comments are as follows: o Noted that the Open Space Management Strategy is due for a refresh in which could impact the Project List over time. o Question was raised as to why rinks are specifically identified in the Project List and not other amenities. As such, some locations get a benefit that others may not (i.e. a rink) and they are funded by the general fund. It was clarified that every developer builds soccer pitches where everyone needs something, projects are identified as developer-specific; where some do, the projects are allocated to SAF. o Question was asked if City Forestry includes infill projects to address the aging forest it was clarified that this is considered an ongoing maintenance issue, and as such, would not be covered by SAFs. o GENERAL NOTE: Anything with the City s share identified in the Project List, has an Infill component. The process for collecting and creating a reserve for infill projects is still to be developed. Review of Drainage Project List (refer to slides) - Comments for specific Projects are recorded on the Project List for Drainage. - Other comments are as follows: o Suggestion to consider some drainage projects as regional, versus for a subdivision in order to consider the infrastructure in the context of a larger system. It was clarified that the City previously had reviewed drainage projects regionally and funded through SAFs, but in response to requests from the development industry, changed to a more local approach. Clarification is required on what regional means. 5

6 o It was shared that if some developers put in ponds as developerspecific projects, they do not want to contribute to other drainage projects through SAFs. o Dream s preference is for internal projects to be funded by SAF. o It was clarified that the model is new from Watson and moving drainage projects to internal was not a part of their work. o Concern was raised that generally moving things to internal can negatively impact small developers who cannot raise the funds. o GENERAL QUESTION: Are differential rates between the 235K and 300K neighbourhoods off the table? Response is no this will be discussed at the next session. o Noted that in general, there was not a lot of support for Area- Specific rates, but it was suggested that for drainage it may make sense. To date, this has been accommodated by moving the projects internal to development, which has the same effect as creating area-specific rates. o Some chart updates were noted as some numbers were incorrect; these are identified in the Actions. Review of Water Project List (refer to slides) - Comments for specific Projects are recorded on the Project List for Water. - Other comments are as follows: o GENERAL NOTE: Infill SAF/DL Totals were developed as follows: where there is a YES in the Infill column, 30% of the project cost was allocated to Infill charges; and where there is an ONLY in the Infill column, 100% of the project cost was allocated to Infill. o GENERAL NOTE: It was clarified that the over-sizing decision (i.e. moving over-sizing projects from the SAF to be developer-specific) is not made. What has been stated within the tables is what is being proposed so far through the process. o It was clarified that the City up-sizes pipes when the need to do so is identified prior to pipe replacements. However, generally pipes are not replaced but rather treated with maintenance solutions, such as relining. 6

7 Review of Wastewater Project List (refer to slides) - Comments for specific Projects are recorded on the Project List for Wastewater. General Discussion - Overview of Costs resulting from this version of the Project Lists (not including Admin Fees) o Total SAF rate: o Total Dev-Specific rate (average): $400K/ha $186K/ha o SAF-Greenfield: o Dev-Spec for Greenfield: o SAF-Infill o Dev-Spec for Infill: $369/ha $205/ha $620/ha $53/ha - Phasing o It was clarified that for June, three phasing options are being developed for discussion. Timing of projects associated with phasing of neighbourhoods will populate the SAF models. o Phasing and the projects will be discussed with the Working Group in June. o Concerns about some project overlapping and it was clarified that this will be considered in determining phasing as it depends on the rate of development and the timing. - Feedback on the Approach: Allocating Costs to Greenfield SAF, Infill and Industrial-Greenfield o Concerns were raised about how this would be charged to Infill and when those who do infill development will be involved. Clarified that these pieces still need to be figured out. To date this approach was used to see what the results could be. o Questions about whether RRI lands would be covered by SAF or developer-specific charges. This has not yet been determined. o Concern that the specific charge to industrial-gf will cripple the development. The cost of land and servicing together are too expensive. It was suggested that the impact of the GTH be considered. 7

8 o Overall a lot of change has occurred that is affecting development costs. The DSM is planned to be updated, the new OCP is approved and is being implemented which increases costs (i.e. changes the way development occurs, such as having wider alleys, street trees, etc.). Concern that this process and associated policy change is another change that will result in changes to costs and profits. o Generally appreciate this idea of splitting the charges, particularly as it begins to make things more transparent in terms of infill having a cost. o A concern is how it will all be administered as separate funds/reserves. o Concern about the impact to Infill was noted, especially because there are hurdles to it proceeding already. o Identifying infrastructure surrounding infill is challenging. And considering the idea helps isolate the challenge of small and large infill. It is relatively easy to do lot by lot infill but much more difficult to do it by block. It is thought that having a charge plus having to deal with the development-specific infrastructure may make it even more difficult. And these are usually the most interesting opportunities. - It was noted that the following changes in charges would apply based on the Project Lists that have been provided to date: o Currently SAFs are $18K/unit; proposed increase in SAFs would create an increase to $33-35K/unit. o For high density, the current SAF cost is $6100/unit and it would be increased to $11K/unit. Therefore it was noted that impacts to the new homeowner needs to be considered through this process. - Developer-Specific Costs o Concern raised that the increase in costs is a shock. Lands that were previously serviced through SAFs are now being proposed to be serviced directly the developer. There is interest in seeing the difference in what was considered developer-specific during the Interim Plan and what is proposed as developer-specific today. o Advantages and disadvantages of moving projects from the SAF to developer-specific identified during the March workshop were reviewed and confirmed. Additional disadvantages for further consideration were: Recognition that the development community cannot finance projects over 25 years. It created administrative hurdles which may discourage growth 8

9 It is increasingly challenging for small developers - Market Affordability o Concern that a rate increase of this nature risks housing affordability and growth in general as it is unknown if the market can absorb it. o It was noted that it may make growth in surrounding areas more attractive. o Noted that this needs to be a consideration in the calculations. - Definition of Infill o Boundaries built at time that the OCP was approved. o The OCP states that population growth should be split 30% as infill and 70% as greenfield. o Parts of Harbour Landing, Greens on Gardiner would have infill potential. o It was clarified that the currently exempt area is not the proposed infill boundary in this process. o In terms of implementing an Infill charge, it is likely that a conversation factor would be used through a development levy at building permit stage (for new unit replacement of existing unit would not be charged). Efforts are still required to review to see how it would work and evaluate its impacts and how it would be implemented. o It was clarified that the options for who pays would be greenfield SAFs and/or taxpayers. o An option to consider is charging projects like those in the downtown 30% to growth, including infill, and 70% to the existing community since everyone benefits from a strong and viable downtown. - Timing of Paying SAFs o Currently SAFs are paid: 1/3 at signing the agreement; 1/3 after 9 months; and a third after 18 months. Question about whether there could be flexibility here given the increase in projects that are considered developer-specific. - Area-Specific Rates o Question about whether there was an appetite to pursue area-specific charges, particularly in situations such as the wastewater solutions 9

10 Westerra will have developer-specific costs associated with providing a force main for its development and will also, under the current project list, pay for integrated wastewater solution that its development will not benefit from. Concern that it is not fair to both front end these projects as well as contribute to other projects that are of no benefit through the SAF. That said, it is difficult to determine what is using existing capacity and what is using new capacity. More thought will be done on this issue. o It is recognized that for area-specific rates, we would need to look at how much infrastructure is required and this is not always straight forward, especially with five different networks. Depending on how you assess it, different rates can result (e.g. is it allocated based what triggers infrastructure or by who benefits). For it to work there would need to be improved clarity around the area component. o A suggested alternative that is similar to having an area-specific charge but less complex was to consider developing a base rate and then adding a surcharge for certain projects by area, like what was done during the Interim Plan. - Use of SAFs o SAFs are now used to ensure that there is something for developments to plug in to (versus plugging the new development into the system). - Debt Limit o Desire to continue conversations on this matter through the phasing discussion. o A concern was raised that developers may not have deep pockets to finance projects either and that therefore large developers will be favoured. o Concern that if the City does not create flexibility to shift the -$50M debt limit, phasing will mask the issue. 10

11 Closing Remarks What went well today? - the lists were easier to read and review - ahead of schedule, likely because we have looked at the lists a lot already (i.e. therefore unlikely to continue as a trend for future years) - explanations on the list were clear and easy to understand - learning - anticipate getting the model(s) a couple of weeks before the June workshop to enable the Working Group to get familiar with it and be able to speak to it at that meeting - like that alternative funding is identified What could have gone better? - we have not yet discussed need vs want - leaders are not in the room and missed an opportunity to have a detailed conversation about some higher level concerns, such as the debt limit - the Regina Gas Tax idea did not get discussed as an alternative funding option What to change for next time? - avoid meetings on Mondays or Fridays 11