Gravenhurst advised Bill 185 may impact collection of development charges
Gravenhurst Council was advised that Bill 185 may impact the collection of development charges, in the April 16, 2024, meeting.
The staff report clarifies that the development charges the Town collects pays for infrastructure growth, thus reducing the financial impact to taxpayers.
The 2023 Development Charges Reserve Fund Statistical Annual Report indicated that charges collected by the Town since 2023 have increased over the last 3 years. The Town collected $593,357 in 2021, $514,320 in 2022, and $720,327 in 2023.
The report adds that $384,969.89 was with withdrawn from the Development Charges Reserve Fund in 2023 for funding projects, leaving a balance of $1,657,542 at the end of the year.
An increase in construction in the Town has had an impact on development charges, according to the report. It explains, “Construction activity in Gravenhurst has continued to be robust. This has resulted in increased development charges.”
However, staff indicate that the Town can’t depend solely on development charges for it’s multi-year capital plan, therefore, they’ve had studies conducted that may have an influence on future spending as well.
Studies that may affect future spending include the new Corporate Strategic Plan, Parks, Recreation and Trails Master Plan, Transit Needs Assessment, Fire Master Plan, Community Risk Assessment, Opera House Strategic Plan, and the upcoming Economic Development Strategy.
The report continues that although the studies come at a cost to the Town, they help with focus and prioritizing greater efficiencies with spending, including the consideration of alternative methods for funding sources.
“Without significant tax increases for capital expenditures, it is apparent that alternative funding sources over and above development charges will be added to advance capital projects in the future,” indicates the report.
The study also indicates that development charges may also be used for projects such as roads, consuming 60% of the Roads and Related Reserve Fund at the beginning of the year. According to the report, “The study identifies $250,000 in eligible expenditures for roads connectivity projects that may be funded from development charges.”
Staff recommended that funds go towards the Bay Street Connectivity Capital Project, at a cost of $1,000,000 between 2025 to 2026.
Although Council approved the report it may be subject to change given new legislation.
Director of Finance Services/Treasurer, Ross Jeffery, advised Council that although the 2023 Development Charge Reserve Fund “exceeded expectations,” the new Bill 185 will likely impact the charges moving forward.
He said, “We’ve yet to see the impact of Ontario changes for development charges regarding discounts and exemptions for affordable housing.”
He added, “The future will see how they match up with development charges collected.”
Jeffery also indicated that the development study conducted this year for the 2025 By-law, will include projects for the next 10 years, however, Council can reduce development charges by removing proposed projects.
