Sarnia council nixes extra input time for development charges by law

Sarnia will still start 2024 without a development charges by law, but for a significantly shorter period of time.

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City council voted 8-1 at a Dec. 19 meeting to undo a decision from November — to extend public input on the city’s new bylaw — that was having the unintended consequence of leaving Sarnia without the ability to collect development charges for at least three months.

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Instead, a public input meeting and council deliberations are scheduled Jan. 15, to approve a new framework for charging builders new housing start fees.

Money collected helps offset the cost of infrastructure projects, like watermains and roads that the city pays for and that are related to that growth.

So, with the current five-year-old bylaw set to expire Dec. 31 and a legal opinion that it can’t be extended, engineering and operations general manager David Jackson said, the city will have no development charges bylaw for 15 days to start the new year.

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The result is new housing projects started during that time will not pay development charges, Jackson said, noting the difference in city revenue will eventually need to be made up in raised taxes, or increased water and sewer rates.

Council had the opportunity to approve the development charges by law in Decemberwhen city staff warned about the tax-hike implications of going without the bylaw.

Coun. Adam Kilner, one of five councilors who voted for the public input extension and, under council’s rules of order, one of five who could ask for a reconsideration, said there was some confusion Dec. 11 when council let that opportunity slide.

“I think a lot of us were still thinking about the budget (passed Dec. 5) and just not realizing exactly what the process was,” he said.

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Realizing the implications in the aftermath, he asked for the Dec. 19 special meeting to make the change.

“Of course we don’t know numbers, but we could possibly be leaving hundreds of thousands or millions of dollars on the table,” by leaving a void for development charges for three months, Kilner said.

“We can further explore once it’s implemented how it might be amended but, for the time being, we’ve had the studyand as far as I’m concerned, it’s time to move forward.”

A $193,000 Watson and Associates study and bylaw update for the city recommends a 30 per cent increase with the caveat that under new provincial rules only 80 per cent is charged in the first year — effectively making the fees cheaper for builders in 2024.

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Development charges currently range from $19,000 for new house construction most places in the city, to $36,000 in development area two, and would rise to range from $21,000 to about $43,000, a city ​​report says.

The cost for 80 per cent, the amount that would be billed in 2024 under provincial phase-in rules, would be $17,000 to $35,000, it says.

Coun. Bill Dennis, who was the sole vote against undoing the public input extension period, said the rates aren’t competitive with neighboring municipalities and he worries people will move elsewhere instead.

Coun. Terry Burrell argued Sarnia has way more services and infrastructure it needs to pay for, which warrants the higher charges.

“We are a city, we are not a rural community,” chief administrator Chris Carter said, recommending council go with Kilner’s proposal.

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Council might also have to reconsider its budget, depending on the amount of building activity and lost development-charge revenue to start the year, Carter said.

It’s unknown what the impact will be because it depends on the number of new builds that start during the bylaw blackout, he said

Jackson confirmed the city’s rates are set by calculating the cost of projects needed for growth in an area of ​​the city, and dividing that by the number of new homes expected to be built there.

Collecting anyway without a bylaw would likely mean a legal challenge the city would lose and then have to pay back the money, he said, in response to a question from Coun. Anne Marie Gillis.

Sarnia-Lambton real estate board president Rob Longo, who asked for the public input extension to give time to review the numbers, said he’s disappointed, but understands.

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Concerns are if Sarnia’s prices are too high, it’ll drive development elsewhere, he said.

More time on city decisions generally, he said, needs to be allowed to consult stakeholders and have a collaborative community approach, instead of just “minimum statutory required public input times.”

The background study was released Oct. 4 and stakeholders were consulted Oct. 10, Daryl Abbs, with Watson and Associates, said.

There’s no time for the real estate board’s consultant to provide analysis before Jan. 15 now, said Longo.

“We’ll do whatever analysis we can do ourselves, as much as we can to provide information,” he said.

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