Chatham-Kent is growing – but that comes at a cost – so council has approved the implementation of new development charges to help ease the burden on existing taxpayers.
With the new charges, approved this month, single detached homes will carry an additional $17,316 fee imposed at the time a building permit is issued.
The charges will also be levied on other types of residential builds, including townhouses, apartment buildings, special care dwelling units and bunkhouses. Commercial institutional properties will pay $7.34 per square foot while greenhouses will pay a fee of $12,197 per acre.
Chatham-Kent does have exemptions to the charge. They include places of worship, cemeteries, post-secondary student residences, non-profit and affordable housing, industrial development, farm buildings, public hospitals and, specifically, the Children’s Treatment Center of Chatham-Kent and the Chatham-Kent Municipal Airport.
According to the report, Chatham-Kent plans to spend $37.85 million over the next five years on growth-related infrastructure, not including water and wastewater. Having the new development charges in place will provide $26.24 million to help cover those costs, leaving $8.33 million – or $1.67 million a year – to be collected from property taxes or other sources of funding.
The report notes that development fees will help cover infrastructure costs, such as new roads, and can also contribute to the expansion of police, fire and ambulance services, libraries, parks and recreation, and waste diversion that will be needed to accommodate growth. Some funds will also be earmarked for future growth studies.
“Basically, it is growth covering the cost of growth as opposed to existing taxpayers paying for those extra costs to grow,” Mayor Darrin Canniff said. “For growth to be sustainable, we need to do this.”
The Chatham-Kent Public Utilities Commission introduced development charges in early 2004 to fund water and wastewater infrastructure costs, but Canniff said Chatham-Kent is one of the few in municipalities Ontario that didn’t have these fees.
Chief financial officer Gord Quinton told council during its Aug. 8 meeting that the municipality did get close to implementing development charges before the recession hit in 2008-09.
“At that point in time, we canceled all plans to move forward,” he added.
Canniff said development charges were not in place for several years as a way to encourage growth.
“Now we’re in a growth stage and people recognize that Chatham-Kent is the place to be and we are growing, so we need to have those fees,” he said.
count. Steve Pinsonneault expressed concerns that development charges could slow future projects.
If the current building boom in Chatham-Kent falters, Pinsonneault said the municipality might be begging people to build in the future.
“I don’t know (if) this is a good idea,” the East Kent councilor said.
Quinton said the consultant’s study on development charges showed there was little difference in the amount of growth when these fees are implemented.
“In some ways it spurs growth because we’re able to do a lot of capital projects that are needed for growth,” Quinton said.
Without these fees, the growth across the Chatham-Kent region would put more pressure on the existing tax base, Quinton noted.
“This would have just a huge impact on our upcoming budgets … if we did not have development charges,” he said.
While the initial cost of the subdivision is presently paid by the developer, Chatham-Kent taxpayers have had to cover such costs as arterial roads and stop lights, Quinton said.
He added there will eventually be a need for extra ambulances and snowplows as more people move to the community, and “the developers don’t pay for that part of it.”
There is also the lifecycle cost to maintain these services, Quinton noted.
By getting the initial infrastructure partially covered by development charges, ongoing lifecycle costs will then have the benefit of a larger tax base with the new houses built, he added.
Quinton said Chatham-Kent’s development charge is lower than others across the province, noting areas in and around Toronto are getting as much as $200,000 for a single home.
“We think this is a reasonable amount,” he said. “It will have a positive effect on our future tax increases.”
While noting the municipality doesn’t want to risk impacting the growth being enjoyed, Coun. Anthony Ceccacci said he doesn’t believe there’s another option at this point.
He pointed to the existing underfunding of maintenance and upgrades to Chatham-Kent’s present infrastructure.
“It’s not prudent to continue to not have any development charges or we’re just going to continue to fall behind further and further, and it’s even going to be more challenging in these upcoming years for budgets,” the South Kent councilor said.