Development Cost Charges (DCC) Minor Update

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Consultation has concluded

Latest News, October 15, 2021.

City Council is anticipated to consider Bylaw No. 2288, to increase Development Cost Charges (DCC) by 4.0% , on October 26, 2021. This amending Bylaw No.2288 was received by Council in March 9, 2021 and the first three readings were approved. This amending Bylaw was based upon utilizing the exemption reference 130/2010 from the Community Charter which allows a City to utilize CPI to adjust the DCC fees from the last amendment. The City has consulted with the superintendent, and they support a minor update rather than the CPI exemption. As such staff is bringing an amendment to third reading to remove the reference to the exemption and to move forward with the minor update which is 4%, as such the fee increase are basically the same as March 9, 2021.


Overview of Changes

The City is proposing Council consider a DCC bylaw amendment to have a minor update to increasing DCCs from 2008 DCC Bylaw amendment by 4%. The City will be considering a major update to DCC once the Master Plans have been completed.

Background

The charges set out in the City’s existing Development Cost Charge (DCC) bylaw were originally calculated in 2005. and amended in 2008. Over the years, costs have increased and DCCs need to be updated and increased to keep up with inflation. Increasing DCCs with inflation ensures that funds collected can still pay for the capital projects in the DCC program. There are three options to increasing costs in the DCC bylaw:

In executing an update to the City’s Development Cost Charges, the City has three options:

1) A major DCC update - includes a complete review of growth projections, projects required to serve growth, capital costs and updated rates. A major DCC update requires stakeholder engagement and often takes over a year and then requires another 2-3 months for approval by the Inspector of Municipalities. This is the process that was under way with the 2018 DCC update process that was not adopted.

2) A minor DCC update – includes an update to project costs, often based on up-to-date construction cost information and unit prices for materials and labour. A minor update does not allow for any changes to projects or growth projections. It only takes the original DCC projects and updates the costs. A minor DCC update can be undertaken by applying cost increases to projects. Through a minor DCC update the City can achieve the approximately 4% increase in DCCs that was previously discussed with the development community. It requires some engagement, and approval by the Inspector of Municipalities under an expedited process which takes about another month after receiving the bylaw.

3) A Consumer Price Index increase – allows the City to increase the DCCs by the BC Consumer Price Index. While the amount of increase permitted is modest and does not reflect actual increases in construction costs, it is relatively straight forward and can be done by having Council adopt an amendment to the DCC bylaw. It does not require approval by the Inspector of Municipalities. However, the inflation amount is limited to the Consumer Prince Index only for the year immediately preceding the adoption, and would not achieve the 4% increase previously discussed with the development community and Council.

Based on a review of the options, Staff are recommending Council consider a Minor DCC Update for the short term. This approach allows for modest increase of about 4%, without the time required to undertake a major update. It also allows for an increase somewhat higher than the Consumer Price Index method.

A bylaw has been prepared to amend the existing City of Revelstoke Development Cost Charge Bylaw No. 1781. The proposed bylaw replaces Schedules ‘B’, ‘C’ and ‘D’ of the existing bylaw with updated Schedules ‘B’, ‘C’ and ‘D’ which have the DCCs increased by about 4%. A tracked version of the Consolidated Development Cost Charges Bylaw is included as an Attachment showing the existing versus the proposed fees.


Next Steps

Council to consider amending Bylaw 2288. If passed, then a letter will be sent to the Inspector of Municipalities for approval. Once the city receives approval council will consider Bylaw 2288 for adoption.


Others Consulted:

The proposed increases were shared and discussed with the Builder/Developer monthly meeting on February 26, 2021. There were no concerns stated at this meeting and Staff offered for any members to contact them with questions. The Ministry thought it would be useful to provide an update to the development community since about six months has passed since our last engagement. To follow this suggestion the proposed increases were also placed on the City website from October 18, 2021 and the Builder/development Industry was updated at the October 6, 2021 meeting.


Latest News, October 15, 2021.

City Council is anticipated to consider Bylaw No. 2288, to increase Development Cost Charges (DCC) by 4.0% , on October 26, 2021. This amending Bylaw No.2288 was received by Council in March 9, 2021 and the first three readings were approved. This amending Bylaw was based upon utilizing the exemption reference 130/2010 from the Community Charter which allows a City to utilize CPI to adjust the DCC fees from the last amendment. The City has consulted with the superintendent, and they support a minor update rather than the CPI exemption. As such staff is bringing an amendment to third reading to remove the reference to the exemption and to move forward with the minor update which is 4%, as such the fee increase are basically the same as March 9, 2021.


Overview of Changes

The City is proposing Council consider a DCC bylaw amendment to have a minor update to increasing DCCs from 2008 DCC Bylaw amendment by 4%. The City will be considering a major update to DCC once the Master Plans have been completed.

Background

The charges set out in the City’s existing Development Cost Charge (DCC) bylaw were originally calculated in 2005. and amended in 2008. Over the years, costs have increased and DCCs need to be updated and increased to keep up with inflation. Increasing DCCs with inflation ensures that funds collected can still pay for the capital projects in the DCC program. There are three options to increasing costs in the DCC bylaw:

In executing an update to the City’s Development Cost Charges, the City has three options:

1) A major DCC update - includes a complete review of growth projections, projects required to serve growth, capital costs and updated rates. A major DCC update requires stakeholder engagement and often takes over a year and then requires another 2-3 months for approval by the Inspector of Municipalities. This is the process that was under way with the 2018 DCC update process that was not adopted.

2) A minor DCC update – includes an update to project costs, often based on up-to-date construction cost information and unit prices for materials and labour. A minor update does not allow for any changes to projects or growth projections. It only takes the original DCC projects and updates the costs. A minor DCC update can be undertaken by applying cost increases to projects. Through a minor DCC update the City can achieve the approximately 4% increase in DCCs that was previously discussed with the development community. It requires some engagement, and approval by the Inspector of Municipalities under an expedited process which takes about another month after receiving the bylaw.

3) A Consumer Price Index increase – allows the City to increase the DCCs by the BC Consumer Price Index. While the amount of increase permitted is modest and does not reflect actual increases in construction costs, it is relatively straight forward and can be done by having Council adopt an amendment to the DCC bylaw. It does not require approval by the Inspector of Municipalities. However, the inflation amount is limited to the Consumer Prince Index only for the year immediately preceding the adoption, and would not achieve the 4% increase previously discussed with the development community and Council.

Based on a review of the options, Staff are recommending Council consider a Minor DCC Update for the short term. This approach allows for modest increase of about 4%, without the time required to undertake a major update. It also allows for an increase somewhat higher than the Consumer Price Index method.

A bylaw has been prepared to amend the existing City of Revelstoke Development Cost Charge Bylaw No. 1781. The proposed bylaw replaces Schedules ‘B’, ‘C’ and ‘D’ of the existing bylaw with updated Schedules ‘B’, ‘C’ and ‘D’ which have the DCCs increased by about 4%. A tracked version of the Consolidated Development Cost Charges Bylaw is included as an Attachment showing the existing versus the proposed fees.


Next Steps

Council to consider amending Bylaw 2288. If passed, then a letter will be sent to the Inspector of Municipalities for approval. Once the city receives approval council will consider Bylaw 2288 for adoption.


Others Consulted:

The proposed increases were shared and discussed with the Builder/Developer monthly meeting on February 26, 2021. There were no concerns stated at this meeting and Staff offered for any members to contact them with questions. The Ministry thought it would be useful to provide an update to the development community since about six months has passed since our last engagement. To follow this suggestion the proposed increases were also placed on the City website from October 18, 2021 and the Builder/development Industry was updated at the October 6, 2021 meeting.


Consultation has concluded