Union of B.C. Municipalities Clinic on Understanding Development Cost Charges September 24, 2003 1060658
Mar 29, 2015
Union of B.C. Municipalities
Clinic on
Understanding Development Cost Charges
September 24, 2003
1060658
Agenda
• Marvin Hunt, Chair – Councillor, City of Surrey
• The fundamentals of DCCs
– Murray Dinwoodie, P.Eng., City of Surrey
• What to think about when considering DCCs
– Chuck Gale, P.Eng., City of Richmond
• Developer’s perspective on DCCs
– Steve Kurrein, CHBABC
The Fundamentals of DCCs
Murray Dinwoodie, P.Eng.City of Surrey
What are DCCs ?
• AuthoritySections 932 to 937 of Local Government Act
• Funds provide infrastructure and parks in support of new development
• DCC amounts vary directly with the type and size of the development
Why DCCs ?
• It’s a way of equitably sharing between developments, the cost of major infrastructure and park land in support of new development … (a sort of development co-op)
• Before DCCs big developments paid for infrastructure and small developments got a free ride
Use of DCCs
• For major services:(Roads, Sewer, Water, Drainage)
• For Parkland Acquisition and Park Improvements
• A separate DCC rate is charged for each service
DCC No-Nos
• Can not be collected for local services:(Streets, Watermains, Sewers, Storm drains)
• Can not be used to pay for upgrades or replacement of services related to existing development
How are DCCs calculated?
$$$ Cost of Servicing
No. of Units=DCC rate
Why DCCs Vary
• DCCs are based on the impact a development has on services
• Different types of Development have different impacts … different DCCs
• Rates are based on the demand each type of development places on the specific DCC service
• DCCs may vary by geographic area
Why DCC Rates Vary
• Different types of development create different impacts … Example:– Single family homes have 3.2 occupants.– Townhouses have 2.4 occupants– Apartments have 1.6 occupants
• Single family homes create higher service demand because they typically house more people
DCC Simplified Example:
• Projected Development:– 30 Single Family lots– 40 Townhouse units– 60 Apartment units
• Local Sewers– Paid by developers
• Cost of Trunk Sewer– Paid by DCCs =
$90,000
Trunk
Local
Apartments
Single Family Townhouses
Example DCC Calculation:• Development Potential:
– 30 Single Family units– 40 Townhouses– 60 Apartments
• Equivalent development impact:– 30 S. F. units– 40 Townhouses x 0.75 = 30 S.F. units– 60 Apartments x 0.50 = 30 S.F. units
• Total Equivalent Impact = 90 S.F. units
Example DCC Calculation:
• Cost of Trunk Sewer = $90,000
• DCC per S.F. unit = $90,000/90 units = $1000 per S.F. unit
• DCC rates:– S.F. dwelling unit = $1000 per unit– Townhouse unit = $1000 x 0.75 = $750 per unit– Apartment unit = $1000 x 0.50 = $500 per unit
Example DCC Calculation:
• DCCs Collected:– Single Family = 30 x $1000 = $30,000– Townhouses = 40 x $750 = $30,000– Apartments = 60 x $500 = $30,000
• Total DCCs collected at build out = $90,000
Implementation … Staff• Prepare land use plans• Estimate development• Prepare servicing plans• Estimate cost of servicing plans• Establish impacts of development on services• Calculate DCC rates• Report to Council … Public input• Approval process
Implementation … Council
• Consider staff report
• Authorize public process
• Gives three readings to DCC By-law
• Authorizes by-laws to be forwarded to
Ministry for approval
Implementation … Ministry
• Ministry reviews by-law
• Inspector of Municipalities approves
bylaw
• Council adopts by-laws (4th reading)
• DCCS become payable
Grace Period
• Time after by-law adoption for “in-stream” developments to complete without DCC payments
• 12 months required by legislation for subdivisions
• No requirement for building permits
Dedicated Funding (Trust Account)
• A source of revenue for the annual capital budget
• Funds must be used for constructing projects identified in DCC by-law
• Funds must be used for the purposes they were collected
Best Practices Guide
• Extensive information for Local Governments
• Addresses policy and implementation
• Available on the MCAWS web site:
www.gov.bc.ca/mcaws/lgd/advice_index.htm
What to think about when Considering DCCs
Chuck Gale, P.Eng., City of Richmond
The Tool Box
• DCCs one of many funding options– Latecomers agreements (939)– Front-ender Agreements (933)– Development Works Agreements
(937.1)– DCC credits (933.8(a)) – Borrowing– Capital Plan
• When to use DCCs
DCCs Imposed by Bylaw
• Bylaw approval process should:– encourage open public consultation– Involve Landowners– Involve “Development Community”
and other stakeholders
• Bylaw should be reviewed regularly– Set out review schedule & process
• Ensure DCC charges remain current
Considerations
• Maintain a current OCP
• Maintain a current 10 year capital
plan
• Establishing a time frame for growth
• Allocate costs to existing and new
development
Considerations
• Allocate costs to different development
types
• Determine the municipal “assist”
• Adjust DCC rates annually
• Impact on development
– Deterrence & Influence on growth location
How DCCs Work an example
$100 = $85 + $10 + $5
TotalDCC
DeveloperShare
CityAssist= + City Share
Exist. Dev +
If Developer Share Lowered
$100 = $85 +$10 + $5
25% $100 = $64 + $10 + $26
50% $100 = $43 + $10 + $47
Reduction%
TotalDCC
DeveloperShare
CityAssist= +
City Share Exist. Dev +
Closing Comments
• DCCs are an important revenue source to consider in support of new development
• DCCs are NOT taxes … (co-op model)
• DCCs are one of a # of funding tools(refer to Development Finance Choices Guide)
Development Industry Perspective
Steve KurreinCanadian Home Builders Association
BC