Municipal Service and Financing Agreements Policy included as Attachment-1 of report 2025-14 - Municipal Service and Financing Agreements Policy…

1:48:59The second one is the municipal service

1:49:01and financing agreements,

1:49:03more financing stuff today, everybody.

1:49:07So we're gonna have, again, another presentation,

1:49:09and we're gonna get into this, you know,

1:49:14called front-ending agreement opportunities,

1:49:16which is really great,

1:49:20really great for us to be waiting into.

1:49:23So, Shanna, I think, are you kicking it off again for us?

1:49:27Yeah, okay.

1:49:29And we have one piece of correspondence there as well

1:49:32that was attached, so I'll leave it up to you to start off.

1:49:38Okay, thank you very much.

1:49:40Excuse me, and good afternoon again,

1:49:43Mayor Guthrie and members of council.

1:49:45So today we are bringing you back work

1:49:47that you directed us to do about a year and a half ago

1:49:49on municipal service and financing agreements,

1:49:52or as we will refer to them today, MSFAs.

1:49:56So today I'm joined by Kevin Yuraskovich,

1:49:58a senior corporate analyst, financial strategy

1:50:00on our financial strategy and reporting team,

1:50:03who has been the project manager of this work,

1:50:05and Craig Binning, our consultant from Hemsin Consulting.

1:50:09You will hear from both of them in a few minutes,

1:50:11but I'll provide a bit of introductory information

1:50:14before handing it over to them.

1:50:20In today's committee of the whole agenda package,

1:50:22there's a staff report accompanied by a draft MSFA policy.

1:50:27Today's presentation will highlight some of the key items

1:50:29from both the report and the draft policy,

1:50:32including background and risk assessment,

1:50:35an overview of key policy elements,

1:50:37and proposed fees and implementation plan.

1:50:46The first thing we want to do is set the context

1:50:48and provide a little bit of background information.

1:50:51So as council is aware, development charges

1:50:53are the primary funding source

1:50:55for growth enabling infrastructure

1:50:56and amenities for our community.

1:50:59Back in October, 2023, as we were working

1:51:01through the DC background study and bylaw update,

1:51:04council provided direction to explore

1:51:06front end financing agreements as a tool

1:51:08to speed up development.

1:51:10The policy that we are proposing today

1:51:12responds to this direction,

1:51:14and this work directly aligns

1:51:16with the strategic plan city building objective

1:51:18to improve housing supply.

1:51:24The purpose of the MSFA policy is threefold.

1:51:28The first, and I would say arguably,

1:51:31maybe the most important,

1:51:32is to accelerate housing development.

1:51:35And so as we do that, as we work toward that objective,

1:51:39we want to minimize risks and minimize financial impacts

1:51:41to tax and rate payers,

1:51:43and we want to provide clarity, transparency,

1:51:45and fairness for all parties entering

1:51:47into these agreements with us.

1:51:50So in a few minutes, Craig and Kevin will walk you

1:51:52through the policy elements that were put in place

1:51:55in service of these objectives.

1:51:57But before that, I'll provide a brief overview

1:51:59of the work that has been done

1:52:01to put together the policy

1:52:03that's before you for consideration.

1:52:08So this slide provides a high-level overview

1:52:10of the project timeline

1:52:11for developing the proposed policy.

1:52:13As mentioned, council provided direction

1:52:15to staff back in October of 2023

1:52:18to explore front end financing

1:52:20after the DC background study

1:52:22and bylaw update work was completed.

1:52:25In January, 2024, council approved the DC study

1:52:28and bylaw update, and the new bylaw

1:52:30went into effect last March.

1:52:32In April, HEMSEN Consulting was retained

1:52:34as the consultant to support this work

1:52:36in collaboration with an internal project team

1:52:39coordinated by finance and including representatives

1:52:41from planning, engineering, legal, and parks.

1:52:45In June, 2024, a review of the legislative framework

1:52:48for front end financing was completed by HEMSEN,

1:52:51and in July, they prepared a memo

1:52:52outlining policy considerations.

1:52:55The first external engagement point occurred

1:52:57in September, 2024 with a discussion

1:53:01on policy priorities, sorry, policy principles.

1:53:06This work and engagement informed the consultant's report

1:53:08which was released as an attachment

1:53:10to a council information report last October,

1:53:14and the information report also provided an update

1:53:16on the work done to date at that point in time.

1:53:20Throughout the fall, the policy was drafted

1:53:22and released on the city's have your say

1:53:24engagement website, and another external engagement session

1:53:27was held in November, 2024 to present information

1:53:30and gather feedback.

1:53:32Feedback was incorporated by the project team,

1:53:35and in February, the draft policy

1:53:37underwent internal strategic level review.

1:53:40That brings us to today where we are presenting

1:53:42the draft policy for council consideration and feedback

1:53:45ahead of the anticipated approval at the end of the month.

1:53:48And so at this time, I will turn it over to Craig Binning

1:53:51from HEMSEN Consulting to walk you through

1:53:53the next part of the presentation.

1:54:04Thank you, Shannon.

1:54:05It's a pleasure to be before council this afternoon.

1:54:07I'm just gonna cover off a few slides here for you.

1:54:09I'm gonna start with the legislative framework.

1:54:12We're working under the Development Charges Act,

1:54:14and as I think many in the room know,

1:54:15the Development Charges Act is a highly prescriptive

1:54:18piece of legislation.

1:54:19When it comes to doing things of what we often refer

1:54:22to as front-end financing arrangements,

1:54:24as was introduced here, this is an opportunity

1:54:27where we wanna work collectively

1:54:28with the development industry to deliver housing

1:54:31and enabling infrastructure sooner

1:54:33to allow for increased supply of housing.

1:54:36One of the, I've got up on the screen here,

1:54:38the key provisions under the legislation.

1:54:41Section 44 of the Act is actually the formal provisions

1:54:45for front-ending agreements.

1:54:47As it turns out, it's a highly prescriptive

1:54:50provision set of provisions.

1:54:52It's administratively onerous,

1:54:54and it also has very broad appeal powers.

1:54:57Because of all of those factors,

1:54:59it's actually very rarely used and not favored

1:55:03by either municipalities or the development industry.

1:55:06I have not seen a formal front-ending agreement

1:55:08for some years, more than 10.

1:55:10What is often used is Section 38 of the Act.

1:55:14Section 38 allows the city to enter into agreements

1:55:18with municipalities for the delivery or the funding

1:55:21of that key infrastructure, and then allows that developer,

1:55:26and it could be developers who front-ended the works

1:55:28to receive development charge credits or reimbursements

1:55:32through the development charge reserve fund

1:55:34for the works that they front-end finance.

1:55:36So they're advancing the timing of infrastructure,

1:55:39and they're balancing that off with receiving credits

1:55:42for the works that they're doing.

1:55:44The policy that has been developed here

1:55:46is really founded around Section 38.

1:55:50There is one other section that's sometimes used

1:55:52for front-end financing arrangements, that's Section 27.

1:55:56Section 27 allows municipalities, including the city,

1:56:00to enter into agreements with the developers

1:56:03to pay for development charges at points

1:56:05other than the normal collection point,

1:56:07which is typically building permit.

1:56:09So under front-end financing arrangements,

1:56:11especially for very large projects,

1:56:13like the financing of a sewer treatment expansion,

1:56:16if there's a wide range of benefiting landowners,

1:56:19and the municipality doesn't have the fiscal capacity

1:56:22to do it, they can enter into a series of front-end

1:56:25DC payment agreements to advance the timing of that work.

1:56:28We have not used that in this policy,

1:56:30but that continues to be a tool available to the city.

1:56:33But as I say, it's more rarely used.

1:56:39What I'd like to focus on now is some policy considerations.

1:56:42This is the kind of policy that stretches across

1:56:44a number of departments within the city,

1:56:46and I'd like to take the opportunity to thank

1:56:49your excellent staff for the hard work

1:56:50that they've done putting into this policy.

1:56:52It's been a pleasure working with them.

1:56:54And it really started with the planning folks

1:56:56because it really is about delivering infrastructure

1:56:59to advanced housing.

1:57:00So we want to make sure that planning is involved

1:57:03in that process and developing the policy and applying it,

1:57:06because these can be used on a city-wide basis

1:57:09or on sub-areas, and they can be used in green-filled areas

1:57:12or in infill areas.

1:57:14So planning plays an important part

1:57:16in establishing the policy and in implementing it.

1:57:19And of course, because we're dealing with infrastructure,

1:57:22we're also heavily dependent upon engineering.

1:57:25The vast majority of front-end financing arrangements

1:57:27deal with roads, sewer, water, or stormwater management work.

1:57:30So engineering is critical in terms

1:57:32of developing that policy, but also

1:57:34will be very important players in terms of administering

1:57:37and implementing it when agreements are arrived at.

1:57:40The city has also used and partnered with the development

1:57:43industry for the delivery of park development

1:57:46in advance of developments occurring.

1:57:49And so we framed the policy to allow

1:57:51for that same kind of activity.

1:57:53Developers do some initial front-end work

1:57:55as part of a condition of their development agreements,

1:57:57but actually developing the parkland

1:57:59is largely funded through development charges.

1:58:02So once again, we incorporated in parks

1:58:04into the development of the policy.

1:58:07And then of course, legal is also critical to this.

1:58:09We need them to make sure that the policy that we're

1:58:12putting together meets all of the tests of the city,

1:58:14and also we're drafting a generic agreement,

1:58:16and they will have significant input into that process.

1:58:20And every time an agreement is entered into,

1:58:22legal will play an important part.

1:58:25And of course, finance is critical as well,

1:58:27and they're critical in many ways.

1:58:29They are going to be there to assess the policy,

1:58:32ensure that we're balancing out risk,

1:58:33and identifying risk appropriately.

1:58:35They will also be involved in establishing the agreement

1:58:38and managing and monitoring the DC credits and the DC

1:58:42Reserve Fund over the life of the agreement.

1:58:45That last point that I just mentioned about risk

1:58:48is really quite critical, because risk

1:58:51is a fundamental consideration of front-end financing.

1:58:53And really what we're trying to do here

1:58:55is balance out the risk between the municipality

1:58:58and the development industry together

1:59:00with delivering that housing enabling infrastructure

1:59:02and delivering housing earlier.

1:59:05Some of the risks that can be involved

1:59:07is that by advancing the timing of infrastructure,

1:59:11it can mean if the development doesn't occur at the same rate

1:59:14and pace that you're incurring additional operating costs.

1:59:17So we want to balance that out.

1:59:19It also can mean that if you're encouraging growth

1:59:21in one area that wasn't anticipated within the time

1:59:23frames, it may be displacing growth that would have occurred

1:59:27elsewhere in the city impacting on the timing

1:59:29of the delivery of infrastructure and housing

1:59:31elsewhere in the city.

1:59:34It also can make challenges because now we're advancing

1:59:36projects, whereas you still need to undertake the works

1:59:39identified in your tenure capital plan.

1:59:41And so we want to make sure that you've got the capacity

1:59:44to deliver that program.

1:59:46Then there's also finally the risk

1:59:48that the agreement itself and the policy has ambiguity

1:59:52or is it difficult to administer.

1:59:54I want to assure you that what we've done through this policy

1:59:57is try to mitigate and manage all of those risks

2:00:00and identify those so that when actual agreements are

2:00:03entered into, they're solid and you've managed that risk.

2:00:06And hopefully it results in the delivery

2:00:08of critical infrastructure to help deliver housing.

2:00:12And with those comments, I'll pass it on to Kevin.

2:00:22Thank you very much for walking us through your analysis.

2:00:26Before getting into the policy elements,

2:00:27we have one more risk to address.

2:00:30Council directed staff to investigate

2:00:32whether entering into front-ending type agreements

2:00:35would be expected to impact the city's credit rating.

2:00:38Staff assessed this risk through consultation with S&P

2:00:41and other municipalities.

2:00:43We assessed that there would be minimal impact

2:00:46on the credit rating from these agreements.

2:00:48There are more details in the staff report,

2:00:50but the main reason for our assessment

2:00:52is that S&P only looks at rated debt

2:00:54when evaluating the debt burden.

2:00:57Since the obligations under the MSFA are not rated debt,

2:01:01it would not be included in the debt burden metric.

2:01:04Moreover, the works advanced under the MSFA

2:01:07would not be at a scale to impact

2:01:09the overall capital expenditure metric.

2:01:19Getting into the policy elements.

2:01:26As Mizzow Dwyer outlined at the top of the presentation,

2:01:29the purpose of this policy is to accelerate housing

2:01:32and promote financial viability.

2:01:35We created a guiding principle section

2:01:38to make clear in this policy

2:01:39that this is about building more housing.

2:01:42This policy is not about substituting

2:01:44one housing project for another.

2:01:46Therefore, these agreements cannot cause the deferral

2:01:48of higher priority projects.

2:01:51Moreover, the amount of staff effort

2:01:53that will go into these agreements,

2:01:56with the amount of staff effort

2:01:58that will go into these agreements,

2:01:59preference will be given to projects

2:02:01that unlock many homes to ensure time is well spent

2:02:04to promote housing.

2:02:07The guiding principle section also outlines the parameters

2:02:10for considering the financial impacts of the project.

2:02:14We established parameters to make sure

2:02:15that the project relies on the revenues

2:02:17it generates as much as possible.

2:02:27The policy is designed to be flexible

2:02:29in the development application process.

2:02:32That being said, the policy encourages staff

2:02:34and developers to discuss options as early as possible

2:02:37for both parties to be coordinating

2:02:39on advancing housing projects.

2:02:41The first step to an MSFA is considering

2:02:43whether there is any infrastructure required

2:02:46to support the proposed development.

2:02:49If so, and if the developer would like infrastructure

2:02:53to be built sooner, the developer is required

2:02:55to submit an initial application

2:02:58to the city for consideration.

2:03:01A city staff panel will complete a high level review

2:03:04and assess the merits of the application

2:03:06in comparison with the policy requirements

2:03:08and make a recommendation as to whether the developer

2:03:10should advance to the detailed application stage.

2:03:15The detailed application stage requires the developer

2:03:17to create a project work plan that is approved

2:03:21by the city engineer.

2:03:23By the city engineer.

2:03:24At this stage, the staff will also refine analysis

2:03:29of the housing and financial impacts,

2:03:31including calculation of DC credits, DC reimbursements

2:03:35and non-growth cost reimbursements.

2:03:38More on that later in the presentation.

2:03:47The policy also outlines a few mandatory requirements

2:03:50to help further remove ambiguity.

2:03:55Entering into these agreements are at the discretion

2:03:57of the city and the city is not obligated

2:04:00to enter into these agreements,

2:04:01even if all the policy criteria are met.

2:04:05To receive a DC credit, a developer must enter

2:04:08into an MSFA with the city under this policy.

2:04:11There are no exceptions.

2:04:14And any work done ahead of the application

2:04:17and agreement process would be

2:04:18at the developer's own cost and risk.

2:04:23A provision that's crucially important

2:04:24for administering the policy is that in a situation

2:04:27where there is more than one developer entering

2:04:30into an MSFA, the developer must create a developer trust

2:04:34and appoint a trustee so that the city is entering

2:04:37into one agreement with one party.

2:04:40Different developers may play different roles

2:04:42in advancing infrastructure, but we do not want

2:04:44to be in a place where we need to figure out

2:04:46who to pay and how much.

2:04:49Instead, the funds change of their trust agreement.

2:05:03There are two paths that an MSFA can take

2:05:06to advance housing enabling infrastructure.

2:05:09With a city led project, the developer provides

2:05:12the financing for the city to build the infrastructure

2:05:14needed to support the developers housing project.

2:05:18With a developer led project, the developer both finances

2:05:22and builds the city infrastructure.

2:05:25Local services like local streets

2:05:26and subdivision are built by developers currently.

2:05:31This policy extends that concept to build projects

2:05:34outside that category.

2:05:36So just like when we build local services,

2:05:38the developer would be responsible for delivering

2:05:41the project and the city would still have significant

2:05:43role to play in reviewing and improving the work plans

2:05:46and inspecting the progress made to ensure

2:05:48that it meets the city's standards.

2:05:51In both paths of advancing housing enabling infrastructure,

2:05:56the developer will be repaid for financing

2:06:00the advancement of the work.

2:06:08The repayment terms fall into three different categories.

2:06:13Development charge credits, development charge reimbursements

2:06:17and non-growth cost reimbursements.

2:06:21Development charge credits are repaid

2:06:22with the issuance of building permits.

2:06:25In terms of cash flow, this means the obligation

2:06:27to repay the developer occurs as the city receives

2:06:31the development charge collections

2:06:33from the developer's own project.

2:06:36The faster the developer builds housing,

2:06:38the faster the developer will be repaid

2:06:40and sending housing development to occur quickly.

2:06:44Development charge reimbursements occur

2:06:47when the project will serve a development

2:06:49beyond the developers who financed it.

2:06:52In this case, the growth funded portion of the project

2:06:56exceeds the development charge credits.

2:06:59Development charge reimbursements are paid based

2:07:01on the portionate share of the development charge collections

2:07:05of the benefiting area and only start once we reach the year

2:07:09the project was scheduled to be undertaken

2:07:13in the city's capital budget.

2:07:16For non-growth costs reimbursements,

2:07:20they occur when the project includes an infrastructure renewal

2:07:24or service enhancement component

2:07:26that benefits the existing development.

2:07:29These costs are primarily paid by property taxes

2:07:32and utility rates and like DC reimbursements,

2:07:38they would not occur before the city

2:07:42would have undertaken the project in the capital budget.

2:07:46As we know, the city's capital budget forecasts

2:07:49are dynamic documents and projects

2:07:54may be advanced or deferred depending on evolving priorities,

2:07:58funding availability and operational considerations.

2:08:02Entering into an MSFA that exceeds the DC credible amount

2:08:06will commit the city to a repayment schedule

2:08:09and will remove the flexibility to defer that project

2:08:13to respond to other priorities or funding constraints.

2:08:23How much the city repays under the MSFA

2:08:26is a keystone policy piece.

2:08:29I'm sitting conducted a scan of different approaches

2:08:32municipalities have taken in repaying the developer

2:08:34for their work and we found approaches

2:08:36broadly fall into three broad categories.

2:08:40On one end of the spectrum is to repay based on

2:08:43the cost estimate in the development charge background

2:08:45study.

2:08:47Staff felt that this was too restrictive

2:08:49as estimated costs evolve over time

2:08:51and the policy should give room to refine our estimates.

2:08:55On the other end of the spectrum is to repay

2:08:58actual costs of doing the work.

2:09:00Staff felt that this approach was too permissive

2:09:04as staff do not manage the day to day delivery

2:09:06of the infrastructure project.

2:09:08This approach would create a significant financial risk

2:09:12for the city as it would essentially be

2:09:14like issuing a blank check.

2:09:16It would be too onerous to validate the actual costs

2:09:19of delivering the work.

2:09:21The middle option is to repay based on the work plan

2:09:24created by the developer and reviewed by the city.

2:09:27This enables us to reach an agreement

2:09:29on the reasonable cost of doing the work,

2:09:31determining the cost upfront allows the city

2:09:34to conduct financial analysis on the viability

2:09:36of the project as well.

2:09:39So this is the approach that we landed on in the policy.

2:09:42They agreed upon work plan.

2:09:52This policy also includes delegated authority structure

2:09:55for authorizing MSFAs.

2:09:57It allows the city treasure to approve agreements

2:09:59under the following circumstances.

2:10:02The project is included in both the DC background study

2:10:04and the capital budget and forecast.

2:10:07The project costs agreed to in the work plan

2:10:09does not exceed the amount included in the project

2:10:14included for the project in the capital budget.

2:10:17And 70% or more of the anticipated DC collections

2:10:20that will pay for the project are to come

2:10:22from the developers that are party to the agreement.

2:10:27For any agreement that despite meeting these requirements

2:10:31but staff believe have may require a council approval.

2:10:41So I'm moving to proposed fees.

2:10:47The proposed application fee structure

2:10:49is outlined on this slide and aligns

2:10:52with the progressive application process.

2:10:55The proposed initial application fee is $1,500.

2:11:01This is to undertake a high level feasibility assessment

2:11:03and determine if there is merit

2:11:05in pursuing a more detailed application.

2:11:08The detailed application fee is 1%

2:11:10of the estimated cost of the project

2:11:12up to a maximum of $20,000.

2:11:15This fee is estimated to not fully cover

2:11:18the staff time required to complete the application review.

2:11:20More on that on the next slide.

2:11:22There are additional fees for any external legal

2:11:26or consulting support required on a cost recovery basis.

2:11:30Finally, once an agreement is reached,

2:11:32the cost of the work plan review

2:11:35and the construction monitoring will be recovered

2:11:37through a 6% fee of the estimated cost of the project.

2:11:42For clarity, that 6% fee would be considered part

2:11:45of the project cost and would be recoverable

2:11:48by the developer through DC credits and reimbursements.

2:11:52The time required to review and analyze applications,

2:12:04approve work plans and enter into and manage agreements

2:12:07is expected to be highly variable depending on the complexity

2:12:11and specifics of any given application.

2:12:14Regardless, there is expected to be considerable investment

2:12:19in staff time required to review, analyze

2:12:23and negotiate agreements, particularly

2:12:25in the first few agreements as internal expertise is developed.

2:12:30The work requires detailed knowledge

2:12:32of the city's planning and engineering documents

2:12:35and processes and it cannot simply be undertaken

2:12:38by newly hired or temporary staff.

2:12:42Depending on the timing of interest expressed

2:12:45by the development community to enter into an MSFA,

2:12:48staff will explore hiring temporary staff

2:12:51to backstop impacted departments using a combination

2:12:54of fee revenue and housing accelerator grant funding.

2:12:59Staff are recommending a phased approach

2:13:01to implement the MSFA policy, limiting the rollout

2:13:05to initially one agreement with the developer or developer

2:13:08trust.

2:13:09This will provide us with an important learning opportunity

2:13:11and the ability to recommend any policy updates

2:13:14to council prior to opening up applications widely.

2:13:21MSFA's implementation will allow time

2:13:24to understand the staff time involved

2:13:26and to make any recommendations required

2:13:28to appropriately be staffed for full implementation

2:13:30while managing other competing housing

2:13:34and affordability priorities.

2:13:40So the next step here is to take in the feedback

2:13:43from council and the community on the proposed policy

2:13:46and incorporating any required adjustments, if any,

2:13:50prior to council approval at the end of the month.

2:13:55Great.

2:13:57Thank you very much.

2:13:59Really appreciate it.

2:14:00As I said at the offset, there was correspondence attached.

2:14:03No delegations, but Councillor Busuttil,

2:14:06you're willing to move this and is there a seconder

2:14:09for this?

2:14:10Okay, downer would do that.

2:14:11Thank you.

2:14:13Thank you.

2:14:14How about this is that moment for feedback?

2:14:17So it is for staff to take away before approval

2:14:19at the end of the month.

2:14:20Is there anything that you want to raise

2:14:22at this point council or is everything on the right track

2:14:25so we can let it come back?

2:14:27Looks like everything's on the right track.

2:14:28Nope, maybe we'll go to Councillor Clausson.

2:14:34Yes, I just have a question.

2:14:36Is that okay?

2:14:37Yeah, for sure.

2:14:39Okay, so it's with regard to the front ending of agreements,

2:14:43specifically with regard to the Mademy letter as an example,

2:14:47my question is how many projects have potentially opened up

2:14:52in the short term with front ending of agreements?

2:14:56Thanks.

2:15:03Oh, sorry, through the mayor,

2:15:05I don't have an estimate at this time.

2:15:07It will really depend I think on the development process

2:15:10and I'm not sure if DCL Holmes has any additional insight.

2:15:15Through the mayor to council class tonight,

2:15:17as Mr. Dwyer mentioned,

2:15:20it really does depend on the development community.

2:15:23I know that we have had some really good discussions

2:15:26with them as we have developed this policy.

2:15:28So I know there is interest there.

2:15:30I think everyone can appreciate

2:15:32just some of the uncertainty in the market right now.

2:15:35They are feeling that as well, of course,

2:15:37so we'll continue those discussions

2:15:39and we can see which projects make sense for them

2:15:42and also coordinating back with us to make sure

2:15:45that there's fully coordinated

2:15:47with our capital plan as well.

2:15:51Great, thank you.

2:15:52Thank you, Councillor Clausson.

2:15:54Well, with that, okay, Billings go ahead

2:15:58and then I just have a couple of questions

2:16:00and then I'll call the vote.

2:16:01So through you, Mr. Mayor,

2:16:03so this is all about accelerating growth.

2:16:08So if we get application application

2:16:11and we're building faster,

2:16:13because now more than ever,

2:16:16we have a higher DC shortfall.

2:16:20So by accelerating growth, are we not,

2:16:24so I'm talking about the operating side of our budget,

2:16:26are we not increasing that DC shortfall

2:16:30and that's going to be an impact on our budget?

2:16:36Through the mayor, I think Councillor Billings,

2:16:38are you referring to like development charge

2:16:40exemptions and discounts?

2:16:43Essentially, yes.

2:16:46So that the impact on any specific project

2:16:50and development will be considered

2:16:52and any impacts for exemptions or discounts that may apply

2:16:57would all be considered at the time of the agreement process.

2:17:01So we will have that information

2:17:03to make decisions based on.

2:17:06Okay, so within our budget,

2:17:08we do have an amount for the DC shortfall, okay?

2:17:13So if we're going to be accelerating the growth

2:17:16and you find out that we don't have that much money

2:17:20in our budget to accommodate accelerating the growth,

2:17:24is that when staff would pause and not accept an agreement?

2:17:34So the timing of development charge exemptions

2:17:39is based on the specific development

2:17:42that attracts those exemptions.

2:17:45And so accelerating growth through an MSFA policy

2:17:50will not necessarily accelerate those exemptions

2:17:53depending on what is being built.

2:17:55If it's an affordable housing development

2:17:58that is willing to enter into an agreement with us

2:18:00for 25 years, that would attract an exemption

2:18:02or if it's purpose built rental,

2:18:04that would attract a discount.

2:18:06And so that would drive potentially extra costs

2:18:10on the tax and rate supported budgets, absolutely,

2:18:14if there are going to be exemptions or discounts,

2:18:17but that will be evaluated as part of the agreement

2:18:21or application and agreement process.

2:18:23Okay, and then through your worship,

2:18:26there was the comment about hiring extra,

2:18:29like say temporary staff.

2:18:32Has that been built into the budget

2:18:34or would that be an addition for the 2026 budget?

2:18:41Through the mayor, we're not at this point

2:18:43recommending any addition.

2:18:45It's very difficult to determine

2:18:47how much staff time will be needed at what point in time

2:18:50because it's dependent on which agreements

2:18:53which developers come forward

2:18:54and how significant those and complex those agreements are.

2:18:58And so at this point, we're recommending

2:19:00or we're taking the approach of considering

2:19:03leaving the door open to hiring temporary staff

2:19:06to backfill if we need it using,

2:19:09we will have some fee revenue coming in

2:19:11to help cover those costs.

2:19:12And we would consider potentially looking

2:19:15to the housing accelerator fund grant

2:19:17if there are funds that could be reallocated

2:19:20to that purpose, if this is the highest priority

2:19:23used to move forward units.

2:19:25Okay, and then the last question through your worship,

2:19:29it's about the agreed upon work plan.

2:19:32So let's just say there's the agreement,

2:19:37if everything's moving forward,

2:19:38but there's issues arise market

2:19:41or other outside forces happen

2:19:45and the project can't meet the timelines by the developer.

2:19:50What, I wasn't clear.

2:19:51Do we have an exit strategy

2:19:54when something like that would happen?

2:20:02Yes, I'd be pleased to answer that question

2:20:04through the mayor.

2:20:04We've into the draft agreement that we're developing,

2:20:07there are provisions there for if certain tests

2:20:10aren't met by the developer that there's an option

2:20:12for the city to discontinue the agreement.

2:20:15And so that is built into the policy

2:20:18and into the draft agreement that's moving forward.

2:20:21Okay, thank you, your worship.

2:20:25Thanks, counselor.

2:20:26So I just have two quick questions on one slide.

2:20:28I think it was slide 17.

2:20:29It had sort of three green buckets.

2:20:34And one of them was like, who does the actual work?

2:20:38So is it the developers own contractors

2:20:42that would do the work?

2:20:46Our own, or do we inspect what they did?

2:20:48Like I just trying to understand how, who does what?

2:20:51One, let's say an agreement's made,

2:20:53then who actually puts the shovels in the ground

2:20:55and who starts to do the work?

2:20:58Thank you.

2:20:58So there's two different paths that could be taken

2:21:01and the policy allows for both paths.

2:21:05So it could be a city-led project.

2:21:07So the city does the work, as we normally would,

2:21:10to build our city infrastructure,

2:21:12but the developer provides the financing for that.

2:21:16And then we pay them back in accordance

2:21:19with the terms outlined in the policy.

2:21:20And the other path is for the developer

2:21:24to actually build and pay for the work up front

2:21:28and then we pay them back later.

2:21:30So there's two different potential paths

2:21:32that we can work through.

2:21:34Okay.

2:21:36What determines though, what triggers them doing it

2:21:38versus us?

2:21:39Is it just a capacity issue?

2:21:41Or what could a developer be like,

2:21:43well, I can do it cheaper.

2:21:47So they just want to do it cheaper.

2:21:49Or vice versa, the city goes, well, we can do it cheaper.

2:21:52So we want, who decides in the moment who does what?

2:21:57I might start and then pass it over to Craig,

2:21:59but I think the capacity piece is definitely a key factor.

2:22:05Whether we have the capacity to move it forward

2:22:07on the timeline that they are looking for,

2:22:09I think would be a key driver.

2:22:11And then Craig may have more to add to that.

2:22:15Yes, Mayor, there's certain circumstances

2:22:17where it would be natural for the developer

2:22:20to undertake the work.

2:22:21For example, if there's a local water or sewer main

2:22:24going through their property,

2:22:25and the city in their development charge program

2:22:27has it wanting to sit upsized

2:22:29for other development and growth,

2:22:31that oversizing component is eligible

2:22:33for development charge credits.

2:22:34In that particular case, it may make more sense

2:22:37for the developer to undertake the entirety of the project,

2:22:40but just to rest assured that we built into the policy

2:22:42and the agreement that of course the city

2:22:45will at all times be verifying the quality of the work

2:22:47and signing off on it.

2:22:50That's great that those types of thought processes

2:22:52are going into it, so thank you.

2:22:54And my last question is, is there a built in appeal

2:22:58or a second opinion type of structure?

2:23:02So let's say a developer wants to go ahead with something

2:23:06that's not in the growth plan,

2:23:08that's not on the horizon under the DC provisions.

2:23:13It doesn't meet the criteria when they make the application,

2:23:19but they really want to get this done.

2:23:20And so staff go, hey look, it's not on our list,

2:23:23it's not in the priorities.

2:23:25So we're saying no.

2:23:27Do they have the ability to appeal that?

2:23:30Because in some other cases,

2:23:32I think about our sign by law.

2:23:36Our staff have the ability to say,

2:23:37no, you can't build this sign,

2:23:39for whatever good reasons they are.

2:23:41And then the person in the business has the ability to go,

2:23:47well, here's my case as to why I think

2:23:49you should let me build this sign.

2:23:50There's some kind of an appeal process built in.

2:23:53But I was thinking on building of housing,

2:23:55like how do we know that we don't find out a year later

2:23:59that staff have said no to seven projects

2:24:02that we didn't even have any idea about,

2:24:05is there a way that you can come to council

2:24:07if staff originally say no?

2:24:17So the policy sets out the parameters

2:24:20for the ideal type of agreement, right?

2:24:23So the amount of the developer's own development charges

2:24:27that will be paying for that project.

2:24:32And in the fact that it's in our 10 year capital budget

2:24:36and development charge study,

2:24:38if it's not in there, in one of those documents,

2:24:42then there's still a pathway, I think,

2:24:45to advance that on a case by case basis,

2:24:47depending on the specifics of the situation and the merits.

2:24:51I don't have a great answer off the top of my head

2:24:53to your question about an appeal process,

2:24:55but if Craig has more to add.

2:24:57Well, this is for feedback, right?

2:24:58So you can take it away.

2:25:00Sure.

2:25:01And I'm not demanding an answer or whatever.

2:25:03You can let us know at the end of the month

2:25:04or whatever, send an email.

2:25:05And I'm not pressuring it on any way,

2:25:07shape or form, just to be very clear.

2:25:09I was just curious on whether or not

2:25:11there is an appeal process or a,

2:25:14and I don't want to be on it.

2:25:15So if the answer is no, that's okay.

2:25:17Like give me the reasons why.

2:25:18And I'm not even suggesting that it would happen,

2:25:20but I just want to make sure that if staff are saying no

2:25:24for valid, valid, valid reasons,

2:25:26but there's a gray area,

2:25:29like how does staff know to trigger,

2:25:32maybe we should bring this to council

2:25:33and we can have that presented here.

2:25:35And then we could also say no,

2:25:37but we could just make sure that we're the final no

2:25:42or yes in those gray areas.

2:25:44So take it away as this feedback.

2:25:47Or maybe through to you, if you don't mind,

2:25:49you're the consultant.

2:25:50Have you seen, have you seen any of that anywhere else

2:25:53or am I completely to lunch?

2:25:56No, of course, no, it's a very valid question.

2:25:58I think the first thing to stress is that all of the provisions

2:26:01that I mentioned under the legislation,

2:26:03that under the development charges act

2:26:05that facilitate these kind of front end financing arrangements

2:26:08are at the discretion of the municipality

2:26:10to enter into the agreement.

2:26:12And so there's no mechanism there for challenging that.

2:26:15Of course, they can always appeal

2:26:17a development charge by law,

2:26:18but once that appeal process is done,

2:26:20but even in that event,

2:26:22and certainly in my experience at the OMB

2:26:24and at the tribunal,

2:26:26there isn't the authority to order a municipality

2:26:29to spend money and build infrastructure in advance

2:26:32of when it would normally do it

2:26:33or when it has the fiscal capacity to do it,

2:26:36which to me is the fundamentally we're dealing with.

2:26:39So I don't see any opportunities for appeals

2:26:42or challenges to the tribunal,

2:26:44but I'd certainly happy to take that away

2:26:46and pass any thoughts back through to staff.

2:26:49Okay, and just to be clear as you take it away,

2:26:51I wasn't thinking appeal through formal like OLT

2:26:54and provincial tribunal stuff.

2:26:56I meant they could appeal their case

2:26:59or they could make their case,

2:27:00just throw the word appeal.

2:27:01They could make their case to counsel

2:27:03or make their case in a way if our staff say no,

2:27:06not to elevate it to a more tribunal appeal process.

2:27:10I didn't mean it that way, just how it could come to here,

2:27:12but that's a good takeaway.

2:27:14Oh, Jane, you wanna jump in and then I'll call the vote.

2:27:16Sure, to you, Mr. Mayor.

2:27:17So just to address your question,

2:27:20so as we're talking to the developers,

2:27:22I think we all want the same thing.

2:27:25If we had unlimited money,

2:27:26if we had unlimited capacity,

2:27:28if that's a kind of project that we would build,

2:27:32then there would have to be a really good reason

2:27:35why we would say no.

2:27:36But I can imagine that there's probably some areas

2:27:39where we'd have to get some direction from counsel

2:27:42that if for some reason we want to say yes,

2:27:45but we can't because there's other elements in the way,

2:27:48if there's something like that

2:27:49that we're really struggling with,

2:27:51as we do with other items,

2:27:52then we would probably come to counsel to ask.

2:27:55All right, thank you so much.

2:27:58All right, so it's been moved and seconded

2:27:59and we'll call the vote then.

2:28:01Is anyone against this?

2:28:04Nope, so that's unanimous as well.

2:28:06Thank you very much, two in a row.

2:28:10Okay, we're gonna take a 10 minute break

2:28:12and we'll have Chair Downer come up

2:28:15and we'll talk about trees and halls.

2:28:20So we'll see you soon.

2:38:37Okay, I'd like to bring the meeting back to order.

2:38:39Welcome back, everyone.

2:38:41And we're on to the public services part of the agenda now

2:38:44and we have two items,

2:38:48the private tree protection bylaw update

2:38:51and around the future of the drill hall.

2:38:55So on the private tree protection bylaw update,

2:38:59we have a presentation with Tamiya Filer,