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City moving forward with DCC updates
City of Cranbrook council last night passed the first three readings of an upgraded Development Cost Charge (DCC) bylaw featuring significant increases being phased in over a three-year period.
DCCs are funds collected from land developers by a municipality to offset some of the costs of new infrastructure (water, sewer, roads) to service the needs of the growing use as a result of new subdivisions and developments being added in the city. The infrastructure installed inside a new subdivision or development is paid for by the developer.
Council Monday also directed city staff to forward the DCC bylaw to the Inspector of Municipalities for approval. The DCC bylaw is scheduled to come forward to council for adoption later this spring, after approval by the Ministry of Municipal Affairs.
The city plans to phase in the new DCCs over a three-year period, starting in 2023.
âThe DCC rates were approved by council resolution on February 7. The rates have a three-year phased in approach with 40% assist factor the first year, 20% Assist factor in the second year and one per cent assist factor during the third year and beyond,â said Curtis Penson of Engineering and Development Services.
The cityâs DCC bylaw has not been updated since 2004 and costs for infrastructure and roads construction have risen significantly over the last 18 years. There is a cost to service new roads, water, and sewer due to new development growth in the city. Along with new development comes more traffic, more demands for water in homes and business, and more sewage flowing in the pipes, these road, water and sewer systems need to be expanded to deal with the growth and these expansions cost money.
The DCC review is to determine how much of that cost should be paid by the developer and how much of that cost should be paid for by the taxpayers, ensuring there is a fair balance in place.
âItâs important that this bylaw is kept current, as infrastructure costs have jumped significantly in the last 18 years,â said Mayor Lee Pratt. âAlthough there is a significant proposed increase in DCCs over the next four years, we need to ensure that new growth pays for growth and the brunt of the cost is not resting on the backs of our existing residents.â
DCCs are paid by developers who create new lots at the time of subdivision, or who build new commercial, industrial, institutional, and apartment buildings. When someone buys a lot to build a house the DCCs will have already been paid. If a new single-family house were being built at a cost of $600,000 for the lot and the house, as an example, the developer would have paid DCCs of about $11,000 to $12,000 for the new lot. That means roughly 1.8% to two per cent of the total value of that home and lot will help pay for the installation of the infrastructure needed to support growth.
âRight now, the current DCC bylaw really places a heavier burden on our current taxpayer, and we are expecting this bylaw update will help balance that burden out, so that development pays for a fair portion of the costs to service new development while ensuring that we remain competitive with other communities,â Mayor Pratt added.
Council wasnât unanimous in passing the three readings with Coun. Wes Graham voting in opposition.
âWe are going to be increasing the costs of development substantially,â he said, adding, âThis is an overly complicated bylawâ and questioned whether the city could use âincentivizingâ measures with developers to ensure the city doesnât begin dealing with âoutliers,â such as possible pocket development on the edges of the city.
Coun. Wayne Price agreed the bylaw is complicated but the increase in DCCs covers what would otherwise come out of all taxpayersâ pockets. âThis is the developer paying their own way,â he said, noting Cranbrook currently has among the lowest DCCs in British Columbia.
Coun. John Hudak said the city must play âcatch-upâ with DCC rates and believes Cranbrook will still be âattractiveâ to developers despite the increased rates.
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