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Cost to Revelstoke taxpayers as well as developers affected by proposed bylaw

If the tabled Development Cost Charge bylaw is passed sewer user costs will increase dramatically

The new development cost charge bylaw has passed first reading, with councillor Trevor English opposed.

However city councillors expressed concern with the rates for commercial properties as well as with the sewer Municipal Assist Factor used to calculate the charges.

At the moment, the bylaw proposes a cost to commercial developers of $156.89 per square metre of gross floor space, up from $41.95 without sewer and $62.66 with sewer in the current bylaw.

This number as well, as the other proposed Development Cost Charges, was calculated based on a number of factors, such as projected population growth and the cost of upcoming infrastructure projects in the community, as well as something called a Municipal Assist Factor.

READ MORE: Revelstoke council selects DCC option for further detailing and feedback

This factor is what percentage of the cost of upcoming infrastructure projects that the city will contribute. In turn, it is how much the taxpayers will contribute to the cost of the projects.

In the current bylaw, which was adopted in 2008, the Municipal Assist Factor for all projects related to growth, is one per cent. In the new bylaw, the Development Cost Charges have been calculated based on a Municipal Assist Factor for sewage upgrade projects of 60 per cent.

The proposed Municipal Assist Factors. (City of Revelstoke)

This would mean a significant increase for tax payers who use the wastewater system in Revelstoke.

However, the city councillors are not comfortable with that increase.

“We have to look at every available option to ease the burden on everybody,” said Mayor Mark McKee.

While the assist factor remained at one per cent for water and road infrastructure projects, it increased to 50 per cent for parks projects.

Mike Thomas, the city’s director of engineering, defended the changes to the Municipal Assist Factor, saying that the proposed bylaw and the projects included in that bylaw are similar to the current bylaw, however it drastically underestimated the benefit of the upcoming projects to current taxpayers.

“The biggest change is the fact that we now have a more realistic growth estimate and we’ve got a more realistic understanding of who should pay,” Thomas said.

The other problem city councillors discussed extensively at their regular meeting on Tuesday, was the cost to commercial developers.

Duke, seeming to voice the opinion of many sitting around the table, said he thinks that they “hit the nail on the head” when it comes to the other proposed Development Cost Charges, however he believes that the commercial numbers will grind Revelstoke’s economy to a halt.

“When I do the back of the napkin number crunch on this one it will undoubtedly change dramatically the investment we see into this community, there is absolutely no question,” he said.

Duke as well as the mayor, said they would like to see the list of infrastructure projects revisited so that the cost to commercial developers, as well as the proposed cost to the current sewer users could be decreased.

The rest of council was in agreement.

However, Nigel Whitehead, director of development services for the city, said he would be very surprised if these charges slowed development in Revelstoke long term.

“A hard cost, like a one time levy, like a DCC, really only affects, in my experience, the market value of the land you are purchasing to develop,” he said. “And generally the market adjusts to that rate.”

Though there may be a cooling off period, he said, development interest is development interest, no matter the cost.

The next step in the process is for city council to review public feedback on the proposed bylaw, which must be received by the city by Aug. 28 at 4:30 p.m., and either make amendments or move forward with a second and possible third reading.

After third reading the bylaw is sent to the provincial government for approval before it is adopted, however, a few councillors were very vocal in their disapproval of the bylaw, saying they would not vote to support it unless there were changes made.

However, the mayor is hoping to stick to the timeline for this bylaw, as he doesn’t want to leave such a big project for the new council that will be elected in October.

The proposed Development Cost Charge Bylaw rates as of Aug. 13, 2018, for the year of June 1, 2019-May 31, 2020. (City of Revelstoke)

Development Cost Charges Bylaw allows the city to charge developers and use the money to assist paying capital costs of installing services such as roads, sewer and water infrastructure, instead of that responsibility resting exclusively on existing tax payers.

The proposed bylaw, based on a study by McElhanney Consulting Services followed by a report done by city staff, as directed by council, has the increase to development cost charges phased in over the next five years.

Should the bylaw be approved as it currently reads, on June 1, 2019 until May 31, 2020 the development cost charge for a single family home in Area 1 would be $20,262, up from the current charge of between $10,528-$14,020 depending on the size of the lot.

For a multi-family home the cost per dwelling unit is proposed to be $13,564, up from $5,740-$9,800 depending on the size of the lot.

Per square metre of commercial floor space the proposed development cost charge comes in at $156.89, up from $ 62.66 with sewer and $41.95 without.

For industrial development, per hectare, the proposed charge would be $280,413 up from $36,319 per acre with sewer and $21,976 per acre without sewer.

For institutional development, per square metre of floor space, is proposed to be $115.47, up from $69.11 with sewer and $51.58 without.

Suites connected to the sanitary system would remain the same at $4,146 per unit, and without sanitary at $2568.

In the proposed bylaw,the rates increase each year until June 1 2023 at which time a single family house will be $22,250 per dwelling, a multi-family house will be $14,889 per dwelling unit, a commercial development will be $166.83 per sq. metre of floor space, an industrial development will be $310,235 per hectare, an institutional development will be $122.09 per sq. metre, suites with sanitary will be $4,146 per unit and without sanitary $2,568 per unit in Area 1.

The proposed bylaw also outlines costs for the resort and Arrow Heights Sewer Trunk Main area as well as Area 2, which, according to the map in the document, includes the Big Eddy as well as the area north of the Trans Canada Highway on the west side of the Columbia River.