Special Council Meeting

6:2830 second warning. Okay. I'd like to call us to order here and

7:33What we're doing right now is just a little bit of what's called ed. It's just educational or orientation

7:38I guess is the best way to say it and

7:43This is a

7:45So let me just start because there's probably a new video starting so hello. It's Wednesday February 14th, 2024

7:51It's 20 minutes after 5 o'clock

7:53This is a special council meeting

7:57The title is

7:59Development charges complaint

8:02Procedural orientation we're going to hear from our associate solicitor

8:08Matthew Arish who's going to just walk us through

8:12Really educational orientation around what we're about to

8:17To be looking at starting at 6 o'clock. So with that I will turn it over to

8:23You Matthew go ahead

8:29council

8:30So I'm gonna try to keep this as brief as possible

8:33Given the length of the time we've been here today. So if there are any questions, please feel free to ask after I'm finished here

8:40I would also indicate that the info sheet that was circulated earlier

8:44Contains a lot more of the detailed informations about this process to refer to that as well in the interest of time

8:51So this hearing procedure generally speaking

8:54Is governed by two acts. It's the development charges act and the statutory power as a procedures act

9:01For the purposes of this hearing both of these acts interact to make it that city council acts in its capacity

9:08Not as members of a council, but as a tribunal and a tribunal that's exercising quasi judicial powers

9:16That set out under this provision of the act here

9:19And here so here's the statutory powers of your decision and it means that you can make any decision

9:26Prescribing the legal rights powers privileges immunities duties and liabilities of any person or party and the eligibility

9:32Ability of any person or party to receive these benefits or licenses

9:37As a tribunal, which is what you will be acting as

9:41This is one or more persons

9:43Which has the statutory power of to decision under these statutes

9:49This act the statutory powers and procedures act sets out that your decision will be a final decision in order

9:56That is appealable, but that this decision must be given in writing

10:02if requested by the party

10:05If interest is a part of that decision that interest

10:09Must be the included that rate must be included in the decision as well

10:14The development charges act section 20 deals with the details of the complaint proceeding

10:22so the

10:24Person required to pay a development charge can make a complaint to council, which is what has occurred in this case

10:30and the

10:33municipality can then determine

10:35Whether that amount of the development charges incorrectly determined whether a credit is available to be used against that development charge

10:42Or if that amount of credit or services are back to given was incorrectly determined or made

10:48If there was an error in the application of the development charge or by-law

10:51So these are the three factors that can bring this complaint forward

10:55under the development charges act

11:00Subsection 4 deals with how the hearing takes place

11:04The council shall hold a hearing into the complaint and give the complainant an opportunity to make representation

11:09representations

11:11following which a

11:13Agent for the the city will be making their representations

11:18After hearing the evidence and submissions of the complainant

11:22And the respondent in this case the council can dismiss the complaint or rectify any incorrect determination or error

11:28That was the subject of the complaint brought under section 20 as I indicated before

11:37The decision made by council can be appealed to the Ontario land tribunal

11:42and this can be done

11:44within 60 days after the

11:48Sorry, they can bring out an appeal 60 days if a decision isn't made after the complaint is made or

11:54If the if they're not happy with the decision that is made and wish to appeal that

12:01This is a important information during the break between the end of this presentation and the commencement of the complaint hearing

12:09Members of the council are not to discuss the complaint amongst yourselves or with anyone else the exception

12:14Is when we are in closed session you can discuss this with myself?

12:18Or the the city staff that is also in that closed session

12:23during the

12:24Hearing from the complainant and the respondent it is important to ask any questions that may come up because this hearing is an

12:30Evidentiary hearing and so this is the source for any information that you will have access to is only through this hearing

12:37There's no additional information that can be provided by myself or the other city staff in that closed session

12:43Substantively so make sure any questions you have

12:46Are asked during the evidentiary hearing?

12:49That is the very quick Coles notes version of this orientation

12:53There is the info sheet that I provided to you earlier that it goes into the lot more of the detail of this process

12:59But I'm if there are any questions at this stage. Thank you very much councillor Allt, please

13:08very much through you

13:10To our tour staff mayor Guthrie

13:13It's a quick procedural question. I note that staff are sitting behind you

13:19Does that mean that we are to not discuss this with staff and staff are not a part of the hearing at all other than yourself

13:29enclosed

13:31All right through you mr. Mary. Yes councillor Allt is correct

13:36Thank you. Okay, is there any other questions?

13:43Okay, if I could you correct me if I'm wrong, but I've done a couple of these in the past and so one of the things

13:49That's always helped me is just kind of think of us

13:52Sitting as a different different body, right? So that like a different hat

13:57in a way like a lot of the processes and structures are there and how we interact here, but

14:03but we act as a different sort of

14:05Body in the decision-making for this. That's the best way of just thinking about it

14:11Matthew am I okay saying that yeah?

14:14Almost sitting like a panel of judges would be a good example. That's what I mean for the quasi judicial

14:21Yeah way of sitting perfect

14:24Okay, well since there's nothing further and

14:28clear

14:29Thank you

14:30What we'll do then is we will have a break because the actual public meeting to hear the complaint under section 20 of the development charges

14:38Actually starts at 6 p.m. So it's right now

14:42529

14:44So let's try to be back here one minute before if we can so that we we respect the time of those

14:50staff and

14:51Whoever else is going to be here in regards to this matter starting at 6 o'clock

14:55Um, yeah, so we'll see each other in a half an hour. Thank you very much everyone

48:25Okay, everyone. I'd like to call this

48:28This tribunal to order please

48:33Thank you

48:37So we are here meeting. It's a six o'clock February 14th 2024

48:43And as is on the agenda the title is public meeting to hear a complaint under section 20 of the development charges act

48:521997 and it's specific

48:55to 1098 paisley road

49:02This is the hearing

49:04This is the hearing by the city council of a complaint dated from december 21st 2023

49:12As I said, it was made under section 20 of the development charges act of 1997

49:18by jennifer meter

49:20Agent for paisley and white law ink, which is the complaint

49:24Regarding the property at

49:271098 paisley road gulf on the basis

49:31That one the amount of the development charges was incorrectly determined

49:38number two

49:39That a credit is available to be used against the development charge was incorrectly determined

49:47And three there was an error in the application of the development charges by law

49:54Now council's role will be to give the complaint and the respondent the city an opportunity to make representations

50:03And after hearing the evidence and submissions

50:07council may dismiss the complaint or rectify any of the incorrect determination or errors that was subject to the complaint

50:18I would encourage members here of the

50:21of council here to

50:23Make notes throughout to the hearing to aid in any deliberations you might have

50:29And as you come up each party can if you could please represent yourself

50:34And at this point

50:37I would like to ask and invite

50:41The complainant's representative to make any submissions on behalf of the client

50:48Thank you and welcome. Thank you very much

50:51Thank you. Good evening

50:54Your worship and members of council. My name is jennifer meter. I'm with tma law law firm

51:00And I am counsel to the complainant

51:03paisley and white law ink which is part of the shembury group of companies and I will

51:08Be referring to my client as shembury throughout my submissions

51:13I understand that you have been at it all day

51:16So I will try and keep this as simple and succinct as possible

51:21And I have provided a copy of my submissions for your

51:27Consideration to review as as I go through them. I'm going to follow them fairly closely

51:32And starting then with tab two

51:36For those of you following along electronically. I believe that's page six

51:41You'll see a site plan for the subject lands

51:45And as american three pointed out this property is municipally known as 1098 paisley road

51:53And it is

51:55bordered by roads on three sides

51:58To the north is elmyra road south

52:02To the west is paisley road

52:05And to the south is white law road

52:07And shembury is in the process of constructing three buildings on the subject lands known as building a

52:15b and c

52:17And if you look at the site plan building a is the one that is at the corner of white law and paisley fronting onto paisley

52:26Building b is at the corner of paisley and elmyra road south fronting onto elmyra road

52:32And building c is beside building b also fronting onto elmyra road

52:37south

52:38This site plan also includes a building d which has not yet been approved. It's it's under review by the city and the

52:45ontario land tribunal

52:50So i also included in this package at tabs four and five

52:55Are a series of email exchanges between the city staff and my client

53:01And its representatives

53:03And from a review of this email communication

53:06It is clearly confirmed that number one

53:12There is a valid agreement

53:14between the city and shembury

53:17for the prepayment of development charges

53:20At the rates that were enforced in 2019. So i'm going to refer to that as the prepayment agreement

53:28It is also clear from this correspondence that the prepayment agreement was honored

53:33In respect of buildings a and b in the dc's that were paid for those two buildings

53:39And it is also clear from this email communications that the city indicated it would honor the prepayment agreement in respect of building d

53:46But ultimately did not

53:49And that is why we have launched this complaint pursuant to section 20

53:53Of the development charges act and before i get into the pertinent facts

53:57I'd just like to confirm the city's authority to enter into a prepayment agreement

54:02And that is found in section 27 of the development charges act

54:06And i have included an excerpt the excerpt of that section at tab six page 39 of my materials

54:13And subsection one of section 27 states

54:17A municipality may enter into an agreement with a person who is required to pay a development charge

54:22Providing for all or any part of a development charge to be paid before or after it would otherwise be payable

54:31So turning to tab three i've put together a chronology of events that are relevant

54:36um to the matter that's before you

54:39And that chronology starts in february of 2019

54:43When shembrie prepaid a total amount of 4,872,821

54:51To the city

54:54For the payment of dc's

54:56At the 2019 rates and at that time

54:59The 2019 rates that were in effect were

55:0414 000 approximately 14 000 dollars for a one bedroom unit

55:09And 19 000 approximately for a two bedroom unit

55:13And you will see that these are the rates that were applied to building a in 2019

55:17And to building b when it when its dc's were due and payable in 2023 2022 excuse me three years later

55:28So on march 1st 2019

55:30A building permit for building a was issued

55:34And building a contains 59 one bedroom units and 47 two bedroom units

55:40applying the 2019 rates of 14 000 and 19 000 dollars respectively

55:46A total of dc's payable

55:49Was calculated to be 1,771

55:5371 000 excuse me dollars um and 778 excuse me

55:58And this so this amount these these dc's payable for building a were allocated to

56:04The payment of dc's for building a from the prepayment that the amount that the city was already holding of 4.8 million

56:12um the they allocated 1.7 million to um dc's for building a

56:20This left 3,101,143 of shembrie's prepayment

56:27remaining in the city's reserve fund

56:29Collecting no interest on behalf of shembrie, but collecting interest on behalf of the city

56:35And then as I said skipping forward three years to august 2022

56:40Building b was now ready for building permit issuance

56:45And I will note that the dc rates that were in effect

56:48At the time of building permit issuance in 2022 were 19 000 for a one bedroom unit

56:54and 26 000 for a two bedroom unit

56:59But on august 2nd 2022 building permit for building b was issued

57:05And as I indicated the 83 one drip bedroom units and the 55 two bedroom units contained in building b

57:12Were charged the dc rates that were in effect in 2019

57:17Of 14 000 and 19 000 respectively

57:21Such that building b the dc's owing were 2 2 million

57:25291 725 dollars

57:29So that money that 2.2

57:329 million dollars was taken from the prepayment

57:36And allocated to the dc's for building b

57:41This left 809 318

57:44Dollars of the shembrie prepayment remaining in the city's reserve fund

57:50And it had been there recall since february of 2019

57:54Again collecting no interest on behalf of shembrie

57:57But collecting interest on behalf of the city

58:01As I indicated I think it's very important to note that here we are in 2022

58:06The city applied the 2019 rates to building b not the 2022 rates

58:11And the city did this because there was an agreement in place

58:15That required them to apply the prepayment the 4.9 prepayment that was made in february of 2019

58:25Moving to the page 10 of the the next page of the chronology

58:29After the dc's were calculated for building b

58:33And that amount was agreed upon the 2.29 million

58:38On august 16th 2022

58:42There was an exchange between shembrie and the city

58:46And this also occurred after the

58:51Remaining amount of the prepayment was established to be 809 318 dollars

58:59And through this exchange that occurred on august 16th

59:04It was confirmed that the continuation of the prepayment agreement

59:08Was confirmed through the following exchange of correspondence and these emails are set out at tab 4

59:16Pages 12 to 15 of my materials

59:19So on august 16th 2022 mr. Rayo

59:24Stated sorry for the confusion your calculation is correct

59:28And that was the calculation applying the 2019 rates

59:32And then he said we will refund the 809

59:37319 shortly

59:40In response on the same date

59:42Mr. Shembrie stated and this is important

59:47I'm okay with keeping that amount on credit for the lower amounts

59:51On units in building c if the city chooses

59:56And then mr. Rayo

59:57Inquired how many units are in building c and is there a commercial portion in that in this development?

1:00:03And mr. Joel pierce vice president of development at shembrie

1:00:07responded to say

1:00:09Building c is identical to building b 318 3138 units. There is no commercial space in either building

1:00:17And then mr. Rayo confirmed thanks for the update

1:00:20We can retain the balance and adjust towards building c

1:00:25payments

1:00:26So mr. Shembrie gave the city the option of either refunding the 800 thousand dollars

1:00:32Or applying the lower rates to building c and the city accepted the latter option

1:00:38And and retained the funds in its account

1:00:44Then on september 20th 2023

1:00:47a little over a year later

1:00:49Shembrie is

1:00:51ready to pursue a building permit

1:00:53for building c

1:00:56And but for the prepayment agreement

1:01:00It would be the july 2022 dc rates that would be applicable

1:01:05And this is because at around that around 2020

1:01:09The development charges act was amended to freeze development charges according to the dates that a site plan application was submitted

1:01:17And in the case of building c the site plan was submitted on july 14th 2022

1:01:23So for a reference there, I have included the july 2022 rates

1:01:28of 16

1:01:29thousand for a one bedroom unit and

1:01:3223 000 for a two bedroom unit

1:01:35So then on september 20th 2023 and and these these uh calculations are set out at tabs five

1:01:44At top five of my materials on pages 27 and 26

1:01:49The city and shembrie on that date exchange emails with their respective dc calculations for building c

1:01:56And you'll see here in at page 27 that the city

1:02:01Does its calculation by applying the 2022 rates to building c

1:02:07And calculating the dc's owing as follows

1:02:10They took 80 the 83 one bedroom unit and applied the 2022 rates of 16 000

1:02:16They took the 52 two bedroom units and applied the 20 the rate of 23

1:02:21thousand the 2022 rates

1:02:23for a total dc payable of

1:02:262.7 million

1:02:27And then once they had calculated the dc's at strictly at the 2022 rate

1:02:34They did a straight deduction of the prepayment that were made in the reserve fund of 809 thousand dollars

1:02:42They did not apply the 2019 rates at all

1:02:47And therefore they did not honor the prepayment agreement

1:02:50And they did not even deduct interest on the 800 thousand dollars

1:02:55Where when it had been sitting in the city's reserve fund since 2019

1:02:59There is no calculation in here and I want to be clear about this because

1:03:03Um miss Thornton may suggest otherwise, but there was no interest deducted. There's no line item that deducts any interest

1:03:11for the 809 thousand dollars

1:03:15So after deducting that prepayment amount that had been sitting in the reserve fund the city came to the total dc's owing

1:03:22of 1 907

1:03:25707 plus interest because under the the

1:03:30amendments to the dc act the city now gets to charge interest

1:03:34From the date that the the the dc freeze

1:03:38Apply so that's the july 14th 2022 date. So that's fine. We're not disputing the their right to charge that interest

1:03:45And just to simplify things. I'm not going to lay out the calculations associated with the interest

1:03:50On the same date

1:03:53Shembury provided its calculation for dc's owing for building c

1:03:57According to the prepayment agreement

1:04:00So what shembury did was first exhaust

1:04:03The prepayment amount of 800 thousand dollars that was sitting in the city's reserve fund

1:04:08And that took them that that accounted for 56 of the one-bedroom units

1:04:14So 56 of the one-bedroom units the 2019 rates were applied

1:04:19in accordance with the prepayment agreement

1:04:22and this resulted in a

1:04:25Surplus of 958 dollars which will be applied later in the in the calculation

1:04:31So then for the remainder of the units

1:04:35this

1:04:36Shembury applied the 2022 rates the prepayment agreement has now been exhausted and

1:04:42They acknowledged that the balance of the amount owing is at the 2022 rates

1:04:46So that's 27 one-bedroom units at 16,000

1:04:51And 52 two-bedroom units at 23,000

1:04:54That brought shembury to the calculation

1:04:58of 1.6 million

1:05:01And then the the remainder of the 958 dollar surplus was subtracted

1:05:07for a total dc owing of 1 million

1:05:10764

1:05:13627 plus interest again, we're not disputing that interest payments are due on that

1:05:19remaining amount

1:05:22So according to shembury's calculation an application of the prepayment agreement

1:05:27It overpaid dcs

1:05:30by

1:05:32143,080

1:05:34plus interest

1:05:40So based on that review of the chronology and the email correspondence

1:05:46I submit that it is very clear

1:05:48that a prepayment agreement exists

1:05:52It was honored in respective buildings a and b

1:05:56And the city reneged on the prepayment agreement in respect of building c

1:06:01Shembury is entitled to rely on the prepayment agreement

1:06:04And had a reasonable expectation that it would be honored until the prepayment had been exhausted

1:06:10Otherwise the city is acting inconsistently and arbitrarily

1:06:15If the city is permitted to default on its commitment

1:06:17It would result in an unfair windfall in favor of the city

1:06:21Which would amount to unjust enrichment

1:06:25The prepayment has been accruing interest to the benefit of the city since 2019

1:06:31If the prepayment agreement is not honored there is no reciprocal benefit to shembury

1:06:36And shembury would never have agreed to allow the city to hold the prepayment

1:06:41Unless there was some consideration flowing to to shembury

1:06:45Instead shembury would have insisted on having the prepayment returned

1:06:49Which it would have invested to its benefit not to the sole benefit of the city

1:06:54Shembury gave the city the choice of applying the remaining prepayment for the lower amount on units in building c or refunding it

1:07:02The city expressly chose to retain the balance and apply it adjust

1:07:08the rates

1:07:09For building c but ultimately the city broke its promise

1:07:13And we are therefore asking that the city honor its commitment under the prepayment agreement and refund shembury

1:07:20143 thousand dollars and eight 143 thousand eighty dollars plus interest for a total of

1:07:26153 thousand nine hundred and thirty two dollars

1:07:30Subject to any questions you may have and subject to any reply I may have to miss Thornton submissions

1:07:35That concludes my submissions

1:07:38Thank you for your time

1:07:40Thank you for your

1:07:42Delegation to us in submitting this we appreciate it

1:07:45At this time I'd like to ask many members of council if they need to ask any questions of clarification

1:07:53Uh councillor I'll go right down the row here Clausson Guller and Boussatil. Thank you

1:08:01Um, yes through you mayor got three to the appellant. Is that the right language?

1:08:07Okay, um, I've got a couple of questions with regard to um

1:08:11the prepayment agreement

1:08:14How exactly was the number four million eight hundred and seventy two thousand eight hundred twenty one calculated?

1:08:21I believe it was calculated on the on assumption of number of bedrooms that would be

1:08:27um a number of

1:08:29units one and two bedroom units that would be

1:08:32um

1:08:33constructed in phase one of the development

1:08:37And phase ones includes buildings a through c a through b a and b were in when phase one

1:08:44Okay, but it's the prepayment was on the basis of number of units

1:08:48So they prepaid for a certain number of units those number of units were not exhausted

1:08:53With the construction of building to building b they readjusted the number of units in those buildings

1:08:57And then we had the 800 000 remaining which the city chose to hang on to

1:09:02Okay, thank you

1:09:04And for the pre prepayment agreement do we have a copy of that?

1:09:09The prepayment agreement is uh, there is no express. There's no written signed agreement

1:09:15It's the indicia of the actions as set out in these correspondence

1:09:18The city acted upon an agreement by have by accepting the prepayment

1:09:24By applying the 2019 rates in in 2019 by applying the 2019 rates in 2022

1:09:30And by saying they were going to apply the 2019 rates the lower rates in 2023

1:09:36So there's an indicia of an agreement there and there does not have to be an express formal signed written agreement for there to be an agreement

1:09:43Um, according to contract law. Okay. Thank you for the clarification on those

1:09:49And just one more from me, um, you may have mentioned in your

1:09:53I think in what you're speaking to building d but I don't see that referred to here

1:09:58I just I just wanted to make sure that I understood the reference earlier

1:10:02It was on the site plan. So I just made reference to it

1:10:06it

1:10:07if and when that building is is

1:10:10A building permit is sought for that building once it's approved and

1:10:13Uh, its dimensions are approved and a building permit is sought

1:10:17Um, shambri will pay what the dcs that are effective

1:10:21Are applicable to that building at the time that they go in for their building permit

1:10:24Which will likely be the date they submit a site plan application for that building

1:10:29Okay, thank you

1:10:31Thank you councillor Goller

1:10:34Thank you

1:10:36Ms. Meter

1:10:38So when your your client made the initial payment

1:10:43Um

1:10:45What what was the the understanding? I mean, is there an email thread that from the city that that that says any of these things or

1:10:52Or from yourself when you paid that initial payment

1:10:55Because I'm not seeing any of that information about how you actually ended up with the you know, 4.8 million dollars

1:11:04It there it's not in my materials. I wanted to keep this as simple as possible, but there was email exchange in february of 2020

1:11:11um

1:11:112019 and that is confirmed the agreement is confirmed in the

1:11:182022 correspondence starting

1:11:28with an email from mr. Andrew bousfield shambri's architect

1:11:33That is dated uh august 4th 2022 it starts at page 17 of my

1:11:39materials on tap for the first email here. It looks like it's uh

1:11:52august 16th

1:11:54Yes, if you if you if you go back it's in reverse chronological order page 17

1:12:00You'll see an email that starts halfway down the page or sorry towards the very bottom of the page

1:12:07Okay, I have to read this backwards. Okay. Yeah, so that helps this is a

1:12:11Sorry, it starts mid of middle of the page. It's from Andrew bousfield august 10th and he inserts

1:12:18Mr. Rao's email with his calculations which were originally based

1:12:23This was for building b

1:12:25And here it says that the uh calculations uh that mr. Rao was proposing were originally based on the 2022 rates

1:12:33And then at the bottom of page 18

1:12:38Mr. Bousfield states I must disagree with your calculation as described above

1:12:43In late february 2019 mr. Shambri paid the city of guelph 4.8 million

1:12:48It was understood by all parties that this was to cover development charge fees for the first phase of his project at

1:12:54201 el myra prior to an increase in rates triggered on march 1st 2019

1:12:59And that these rates would be locked in for the buildings should my client pay the fees prior to march 1st 2019

1:13:06Why should mr. Shambri pay development charges in advance for building b at a lower rate?

1:13:10If there was no incentive for him to do so

1:13:13He then sets out his calculations

1:13:15applying the 2019 rates

1:13:19And then if we go back

1:13:23To page 15

1:13:32We see mr. Rao's response

1:13:37Hello, andrew sorry for the confusion your calculation is is correct

1:13:43So he acknowledges that there was a pre payment

1:13:46Uh

1:13:48The prepayment has been made and locked in the rates

1:13:52That were in in force in 2019

1:13:54Right, right. So i'm seeing that the calculation was correct, but I don't see an assurance that

1:13:59Building c would be charged at that rate. Where is that information?

1:14:03That information is is set up right here. So he says mr. Rao says hello andrew sorry for the confusion your calculation is correct

1:14:11We will refund the 108 thousand shortly

1:14:15In response to that going forward a page to page 14

1:14:20Mr. Shambri says i'm okay with keeping that amount on credit for the lower amounts

1:14:26On units in building c if the city chooses

1:14:30And then mr. Rao ultimately says thanks for the update

1:14:34We can retain the balance and adjust towards building c

1:14:38Right, so that's for the lower amounts

1:14:40And for building b but where is the city saying that they're going to use those same rates for building c

1:14:47i'm not seeing that information on page 12

1:14:50page 12

1:14:52what I just

1:14:54recited

1:14:56Mr. Rao said we can retain the balance and adjust towards building c payments

1:15:01Mr. Shambri said

1:15:02Please

1:15:04You at the city's choice you can keep the money and apply the lower rates

1:15:09Or you can return the money and mr. Rao chooses to keep the money

1:15:15And apply it to building c

1:15:17Right, but but there's no indication that

1:15:20The 2019 rates would be applied to building c. I disagree because mr. Mr.

1:15:26Shambri was clear that he was expecting that the lower rates would apply

1:15:30Otherwise, there's no incentive for him to keep the money with the city if it wasn't going to if there wasn't going to be consideration

1:15:36Any and there's no benefit for him having the city hold on to the money and the city being the one collecting interest on those funds

1:15:43If if he wasn't if there wasn't an expectation that the

1:15:46Rates would apply and the prepayment agreement would be extended to building c. He wouldn't have done that

1:15:54Okay, those are all my questions. Thank you and that uh, councillor busigel, please. Yes. Thank you and through the mayor

1:16:00um

1:16:01I was going to ask the same question councillor Klassen did but my question is about uh, your

1:16:08Chronology here doesn't really have the timelines for the expected development in here

1:16:12Am I understanding, you know, the process is missing in here for me. So I see, you know copies of emails and so on but

1:16:19I didn't see in the timeline around

1:16:21A site plan which is I thought what triggers the issuance of the

1:16:27Development charges is is that something that you can provide? So building a you've got march

1:16:35first 2019 and then you're not

1:16:38Into building b until 2022 like was the timeline elongated?

1:16:44Due to other factors and things like that

1:16:47If you can clarify a bit

1:16:50So in terms of site plan

1:16:52Locky what under the new legislation the amended dc act

1:16:56You do now lock in your dc rates as of the date you submit site plan

1:17:01That those amendments to the development charges act only apply in respect of building c

1:17:06So that's why only building c is the date of site plan approval relevant

1:17:12For buildings a and b that legislation had not taken effect

1:17:16And so dc's were payable

1:17:19At day before a building permit unless there was a prepayment agreement in force

1:17:26In terms of the elongated timeline

1:17:29I'm not sure if

1:17:31you're referring to

1:17:33That the amount of time it took to construct building a

1:17:36before building b was commenced but

1:17:41Essentially building a the building permit was issued for building a in 2019 the building permit for building b was issued in 2022

1:17:49And then building c 2023 a year later

1:17:53Thank you. No, I was just trying to get at the

1:17:56intention that you spoken to about your your employer about

1:18:00Having the city hold the money and just the planning kind of process in mind, but thank you

1:18:07Thank you

1:18:09I don't see any other questions at this time

1:18:12There could be later, but uh, thank you. Thank you. Thank you for your submission

1:18:17And uh, now I'd like the respondent which happens to be the city

1:18:22to formally come up and

1:18:25And make your presentations for for us to consider. Thank you

1:18:33Members of get it up here

1:18:38um

1:18:40Good evening

1:18:41Under section 20 of the development charges act as you have been advised

1:18:45It falls to you to evaluate the assertion by the complainant through its lawyer

1:18:50That the development charges levied as they relate to building c and we're only talking here about building c

1:18:56There's important timelines here

1:18:59You to appeal

1:19:01or to cancel a

1:19:05An allegation of a mispayment. There's a timeline. So we're only talking about building c

1:19:11The assertion is that was incorrect and that there should be a refund issued

1:19:15In my submission, you won't be surprised here

1:19:19I submit that the development charges that were levied by city staff in september of 23

1:19:26Those were appropriately calculated and that they were appropriately calculated in accordance with the dc act and with the dc bylaw

1:19:34Which is also relevant

1:19:36um, I did pre file

1:19:38A brief which you will have electronically and i'll try to refer to pdf page numbers if

1:19:45So that you can follow along

1:19:47um timeline

1:19:49have one

1:19:51Lays out a brief chronology of the events and there are a few dates that I wanted to

1:19:56Point out just uh, sorry. I've just had some members ask for just a moment as they pull it up in front of sure

1:20:02Just sorry. Thank you because we we

1:20:07um

1:20:09Yeah, I think it's uh on email

1:20:13So that this this was prepared for us here as a kind of a hard copy so it was easy to kind of look at

1:20:18So we just want to make sure we have it in front of us. So

1:20:23No, there is no hard. It was part of the meeting package that was provided by the clerk. It was provided. I didn't print copies

1:20:30Oh, it's okay, but I hope I hope that's why we just wanted a second to follow along. That's okay. Yep. No problem

1:20:37So the first date that's important is february 28th of 2019

1:20:43And sorry

1:20:45Oh apologies

1:20:50I'm sorry

1:20:52Through you mayor, uh,

1:20:53Pardon me through you mr. Mayor. I will just recirculate the document brief to members of city council now. So you have

1:21:00Yep, yeah, we'll just wait for the clerk's to send it to all of council. So it's at the top of the thread. Okay

1:21:20Okay, so included in that was a link. Hope everyone got it. Okay

1:21:25All right

1:21:27Good thing. There's good thing. There's no timeline. Yeah

1:21:30Thank you. Go ahead

1:21:32So the first date I think that's important is february 28th of 2019

1:21:37And that's the date on which paisley and white law remitted

1:21:40payment for the two buildings a and b which miss meter has referred to as phase one

1:21:45And phase is an important concept under the development charges act because although

1:21:51We might think colloquially is developed about developments as one one development

1:21:58Phases are separate developments for dc purposes. So phase for phase one a payment was remitted on february

1:22:068th of 2019

1:22:08And that was payable under the then in force

1:22:122014 dc bylaw

1:22:15And it was probably note that lots of people come in right before a new bylaw comes into force

1:22:20It was two days prior to the coming into force of the 2019 dc bylaw

1:22:26And those there's no dispute those were the rates that were applied

1:22:31And payment was made based on an understanding of the number of units and of the bedroom counts in those units

1:22:40The second important date

1:22:42Is july 14 of 2022 and I think you've already heard from miss meter as to why that's important

1:22:49under the

1:22:51dc by law as it currently reads

1:22:55And under the dc act and this changed in and around 2020

1:23:01We look at the point in time at which the site plan application

1:23:06Ultimately accepted was submitted and that's the point in time at which we determine the applicable rate

1:23:14The third potentially and i'm going to say potentially important date is august 16 of 2022

1:23:21Which is the date that mr.

1:23:22Shembury a principal of the complainant told the city not to

1:23:27Told asked told the city not to refine the payment on building a

1:23:31And building b but to apply it to building c

1:23:35And so what you're asked to do is to unpack what is meant by apply

1:23:40That amount that the credit on account

1:23:44Now I understand by miss meter's submissions that the complainant's position comes down to an assertion

1:23:50That in august of 2022 when staff followed mr. Shembury's request to hold on to the money

1:23:56um, there was an agreement entered into between this city and

1:24:01paisley and by law

1:24:03paisley and white law rather that the

1:24:07What the rates that were applicable on february 28th of 2019 become applicable

1:24:13to

1:24:15Building c or at least to a certain number of units in building c

1:24:20So as opposed to being a mere deposit against the future dcs that you can apply

1:24:26The assertion is that there is a prepayment agreement

1:24:30Um as has miss meter. I've set out the actual email exchange in the city brief at tab five

1:24:38In my submission, there's nothing in that exchange that supports that reading

1:24:43But more fundamentally

1:24:45I submit to you that parsing the words at the end of the day is not

1:24:48necessary because at law

1:24:51No agreement could have been reached through that exchange of emails between

1:24:56paisley and white laws personnel and miz route. It is miz route

1:25:01section 27 of the development charges act allows

1:25:05But it does not mandate a municipality to enter into an agreement to permit payment on different terms

1:25:12Then what is prescribed in the act and what is prescribed in our bylaw?

1:25:16Which is you determine the applicable rate

1:25:19based on the date of the

1:25:23um of the

1:25:25site plan application

1:25:27The possibility of an agreement on payment terms

1:25:31Different than pay in full at first pearling bonnet is mirrored in each of the bylaws the city has passed

1:25:37But there's some very key wording

1:25:39That relates to that power in the city's bylaw and that

1:25:44Wording has not changed in the three iterations of the dc bylaw that are in my brief

1:25:51If you go to tab four

1:25:54pdf page 54 if you're following along

1:25:58The current enforced bylaw that was enforced in the summer of 22 when this agreement was allegedly made

1:26:05section 3.15 provides that

1:26:08council

1:26:09may enter into agreements on different terms

1:26:15And at tab two pdf page 14 the 2014 bylaw which was in place up to two days before the 2019 payment

1:26:23again section 3.11 similarly states that

1:26:27council

1:26:28May enter into agreements

1:26:30now at common law contracts can be made

1:26:34by

1:26:35communications casual communications

1:26:38But that is overridden by the city's dc bylaw and the city's dc bylaw

1:26:43Specifically says it is council that approves a prepayment agreement

1:26:50So it is not a junior analyst in the finance department

1:26:55um respond

1:26:57Do not not refunding the money

1:27:00That can make a prepayment agreement at law in this situation

1:27:05Your bylaw this is the city's bylaw is clear

1:27:08A prepayment agreement is a pretty big deal to be honest because it's taking money

1:27:16That is intended to be come from development to pay for development

1:27:21And it is it has to be made up from somewhere. So that's not undertaken lightly

1:27:27It's brought to council for council's approval. It would be a written agreement

1:27:33There is no such agreement here

1:27:35And because without approval of council, there is no agreement in my submission this

1:27:42suggestion

1:27:43That miss rouse failure to refund that money

1:27:47That was determined to be owing

1:27:50After looking at

1:27:51What happened in phase one and realizing that the number of bedrooms was not the same as had been anticipated

1:27:59That that money was owing

1:28:01And that that's not in dispute

1:28:04But what is in dispute and what I say

1:28:07is

1:28:08Sort of indisputable at the end of the day

1:28:12Is that the DCs are to be calculated in accordance with the act in accordance with the bylaw

1:28:19And without the existence of the alleged agreement

1:28:24So then there's a question of what did happen to that 100 and 809 thousand dollars in change

1:28:32And I also want to reassure you because there's been a suggestion that there was some kind of

1:28:39Unjust enrichment that actually it was very fair

1:28:42And there is a good business reason frankly for a person to leave that money on deposit

1:28:47And that's because of the way

1:28:49That the DC calculation works

1:28:53It's calculated based on the day on which the site plan application is accepted

1:29:00But there is interest and that's in the DC act there and into the DC bylaw

1:29:05There is interest that accrues from that point

1:29:08until the

1:29:09DC becomes payable

1:29:11And that interest

1:29:14The DC bylaw was overridden by a further amendment of the DC act

1:29:19It's calculated on a quarterly basis based on average prime rate

1:29:24so you

1:29:26So you look at the prime rate for a quarterly period

1:29:30You apply that interest rate for each quarter between the point at which the DC

1:29:36Sorry, the site plan application was accepted and the DC by the base DC is payable

1:29:41And that is that is added to the rate

1:29:46So what happens then and you can look at the city's calculations. They're set out at tab six

1:29:52What happens with that eight hundred and nine thousand dollars that mr. Shombri did not ask for back

1:29:58Is that it accrues interest at that very same rate?

1:30:02And in fact if you look

1:30:04In the brief at page

1:30:07I think 69

1:30:09I know sorry, that's the email if you were to look at the if you're looking the brief there's actually a breakout

1:30:15of

1:30:17It's a page 94 the pdf

1:30:2061

1:30:22385 dollars and 11 cents was earned

1:30:26On that money that was kept on deposit with the city because it was earning the same rate of interest that was accruing

1:30:33between the point in time at which

1:30:36paisley and white law

1:30:38site plan application was accepted and when the DC was payable

1:30:44And so I think most of us actually

1:30:47Would like to see that kind of rate of interest not everybody can earn

1:30:52prime rate

1:30:53Calculated on a quarterly basis, but it is a fair and equitable

1:30:58Accounting of the money that the city was holding

1:31:01It is a fair and equitable way to treat money that a person has asked the city to hold on to

1:31:09As a credit against a future payment that we all know was coming because they had an accepted site plan application

1:31:15And they would be drawing a building permit

1:31:18So at the end of the day, uh, there are three questions in front of you

1:31:23Was the dc incorrectly calculated in my submission? No, it was not

1:31:29The dc act the dc bylaw tell us how the dc is to be calculated and the payment that was

1:31:36requested and collected

1:31:38In september of 2023 was calculated in accordance with the bylaw and in accordance with the act

1:31:46Was there an incorrect calculation of a credit?

1:31:50again, there's an email back and forth that

1:31:53809,000 and change

1:31:55Was confirmed in writing between mr. Shambri and city staff as being the correct credit

1:32:02On account for the fact that the number of bedrooms and the number of units was not the same

1:32:08As had been calculated at the time of at the time of payment on phase one

1:32:14And then was the bc bylaw misapplied

1:32:18The bc bylaw was not misapplied in fact to do as the complainant has asked you to do

1:32:24Would be a misapplication of the dc bylaw because the dc bylaw does not delegate to any staff in the city

1:32:32The authority to enter into a prepayment agreement only you as counsel can enter into one. There is no such agreement

1:32:39So subject to your questions. Those are my submissions. Thank you. And is there any follow-up questions?

1:32:47Councillor abusa till and then or orc

1:32:51Thank you and through the mayor just so that i'm very clear

1:32:55You know when I compare your brief to the appellant's brief in the chronology

1:33:00It says that in 2019 february 2019 that the dc rate that was applied was 2019

1:33:08Please correct me. What I heard is that it's actually the 2014

1:33:13Rate that was applied. Is that correct? So it was it was a rate that was applicable on february 28 of 2019

1:33:23Which would be based on the 2014 bylaw, but there is a bump up every year

1:33:28So it was calculated under the 2014 bylaw. It was the february 28 2019 rate

1:33:35Which would have been a different rate two days later, but it was a

1:33:392019 rate

1:33:42Thank you. And just so i'm perfectly clear

1:33:46The dc is calculated at the time of site plan approval not site plan submission. Is that correct?

1:33:54um

1:33:55Through you mr. Mayor to councillor Busuttil

1:33:58the

1:33:59I had to check this myself the other day

1:34:03It is the date is based on the

1:34:06submission of an ultimately approved site plan. So the submission date fixes the point in time

1:34:13Provided that it is ultimately an accepted site plan

1:34:18Thank you. That's all

1:34:20Thank you. And a rork, please

1:34:22Thank you. Marga three

1:34:26Through you

1:34:27Mr. Arnour, you said a mere deposit that you could apply that that prepayment is just a deposit

1:34:34um

1:34:35So then if that's the case miss meter said

1:34:39There was no interest paid the interest accrued entirely to the city

1:34:42But then why would anybody make a deposit like that?

1:34:45If there was no interest can you help me understand what happened with the deposit the interest because

1:34:51I see correspondents here from city staff saying

1:34:54We did credit you for interest on the prepayment. So can you just help me understand what happened with the interest?

1:35:00Certainly through you mr. Mayor to a councillor of work

1:35:04and so

1:35:06In terms of a deposit so I think we need to first take a step back and say how did that arise?

1:35:12It was because there was a discrepancy between what was paid

1:35:17For phase one and what was ultimately built. So there was a credit

1:35:22And and that was back and forth and agreed to in 2022. That's not in dispute

1:35:28The deposit if we're going to call it that is the decision of mr. Shembury not to take not to

1:35:36Have have staff sent him a check

1:35:39Which was offered by staff but to hold on to the money

1:35:43And what I'm saying is that interest was

1:35:47did was credited because

1:35:50The amount that was charged for the dc

1:35:54in 2023 was the net

1:35:57of

1:35:59interest on the

1:36:01800 and 9000 and change

1:36:05and

1:36:06interest on the dc

1:36:09and so

1:36:10Going back to basic algebra

1:36:12a times b minus c is ab

1:36:16minus ac so mr. Shembury

1:36:18Ultimately was credited

1:36:2061 000 change

1:36:23For the money that he left on deposit if he'd instead taken the check back

1:36:29Maybe would have earned prime rates. Maybe wouldn't have but the choice was a rational business decision given that

1:36:38There was interest accruing between the point in time

1:36:42That the site plan was accepted and when the dc would become payable

1:36:47Okay, thank you and through you mr. Guthrie just a second question

1:36:53I I want to make sure I could you say there is no delegated authority on section 3.15

1:36:58So that staff person could not have entered into a an agreement without having it come to council

1:37:05Have we seen anything like that come to council before in the last five years?

1:37:08Have we seen yes, there are some agreements

1:37:11in different circumstances

1:37:13Um, sometimes involving charitable organizations not to get into any specifics

1:37:18There are certain situations where the city um has usually

1:37:23Usually taking payment over time or after the fact

1:37:27But the act does allow for either before or after that can be an arrangement the city agrees to

1:37:34but it is

1:37:3527 of the

1:37:37DC act says that such agreements could be entered into

1:37:413.15 of our by-law says they can be entered into on the direction of council. Okay. Thanks

1:37:51Thank you. I don't see any other questions other than from me. Oh, sorry. Okay, councillor costum

1:37:57um, thank you and through you mr. Mayor to

1:38:00um

1:38:01The staff just gonna say staff. Um, I I just have a question with regard and I'm maybe a bit tired

1:38:07So I just want to get clarity on it the interest that was accrued the 61 000 that you mentioned

1:38:13Was that credited back to um the app appellant?

1:38:18How I just I just want to be really clear about about that piece because I

1:38:22I wasn't sure after

1:38:24We heard from you and and it is late

1:38:27And to quote from my favorite SNL sketch

1:38:30I understood there would be no math, but there is so let me just try

1:38:34um the

1:38:38The 809 thousand dollars

1:38:42Which could have been repaid in 2022

1:38:45Staff was ready to cut the check

1:38:48It was held on to

1:38:50And so when the dc was calculated

1:38:53The dc was pay was payable on the net

1:38:57of

1:38:58the pre-interest dc

1:39:02and the

1:39:04809 000 and change

1:39:06So the same rate of interest

1:39:09payable between site plan and payment of the dc was also paid on the

1:39:16um 809 000 so basically what what happened to that money it got the benefit of

1:39:24the average prime rate of

1:39:26I think five canadian banks

1:39:29um

1:39:30While it was sitting on the city's account, which is a pretty good rate of interest

1:39:34And would be a rational thing for someone to do

1:39:38Rather than take a check back and

1:39:40Put it in their own bank account where they're probably not getting prime rate. Thank you

1:39:50Thank you. Uh, so just a couple questions for me. I guess I'm just wondering in the correspondence from our staff

1:39:57Regardless of what our dc bylaw stipulates, you know, there's a

1:40:02all these different clauses

1:40:04and it says

1:40:06That council may enter into

1:40:08I understand your position on that, but then why didn't our staff member tell that to the client?

1:40:15Like why is the onus on our client or not our client the the client?

1:40:21to understand that process when

1:40:24A request was made to our staff member

1:40:28And the staff members the way i'm reading it says yes

1:40:32That's that's how I'll apply it

1:40:35I don't see any other correspondence or any kind of back and forth anywhere that

1:40:40That says oh, but I can't do that. You have to go to council

1:40:46Unless i'm missing that please. No, go ahead. Mr. Mayor to you and through you

1:40:53I don't think it's necessary to parse the words, but I will on your on your request and I don't believe that it was

1:41:00It is clear at all through this correspondence

1:41:04That staff understood that they were being asked to apply

1:41:092019 rates to this 2022 payment. There's certainly nothing you can go through it many times

1:41:16I have and there is nothing by

1:41:19The owner that says that's what I want you to do

1:41:23The owner was asked or sorry the staff what directed another staff

1:41:29Rajni Rao directed

1:41:31Vithya Siddhikar

1:41:33to cut a check

1:41:34And mr. Shumbri said

1:41:37I'm okay with keeping that amount on credit for the lower amounts on units and buildings if the city chooses

1:41:44I don't know that that's clear at all and I certainly don't think that the response

1:41:48Thanks for the update. We can retain the balance and adjust towards building C

1:41:53Communicates an understanding that you're committing the city to five-year-old DC rates

1:41:59I don't think it means that but at the end of the day

1:42:02I don't think it's necessary to determine what anybody meant because nobody there

1:42:07Had authority to enter into that agreement or to give away that tax money to a developer

1:42:14It's it's it's a pretty serious

1:42:16It's it's a pretty serious decision to decide to do that and it must come to council

1:42:22Okay, thank you. I guess I'm just still wondering. I'm sorry to just put I'm just pushing a little bit here

1:42:28Because I just really I'm trying to understand this

1:42:32Regardless of what you just said there. Why didn't the staff member if there was no

1:42:36if there was some not clarity

1:42:40tell

1:42:41or inform the client that

1:42:44Like there's no back and forth on after that moment around clarity about whether or not there is an understanding

1:42:51Of how this is to be applied and if there was any question of that

1:42:55Why is there any suggestion that it has to come to a manager or to council as the dc by-law?

1:43:01outlines

1:43:03So to you and through you mr. Mayor, I I think that

1:43:07My reading of this exchange is that Rajni Rao understood that there was an amount being held

1:43:13That would be credited towards a future payment

1:43:17And nothing more and nothing less

1:43:19I don't believe that that exchange actually communicates any understanding that we were talking about different rates

1:43:26It was certainly not called out as such

1:43:28By the owner when they when the the owner's request that money was retained by the city

1:43:35There may have been a misunderstanding

1:43:38Um, and that could be the case. So I'm not trying to impugn anyone

1:43:42But I don't believe that I read this as the staff understanding

1:43:48That that was the request because I believe that yes

1:43:50I think our staff would come to council if that was understood to be the request

1:43:55So there may have been a miscommunication

1:43:57But the important thing is at the end of the day

1:44:00The dc's are payable based on the act and the by-law unless this council agrees to something different

1:44:07Okay, so then how did um

1:44:13And again, I'm just trying to form this into a question

1:44:17When this client says

1:44:21I'm okay with keeping the amount on credit for the lower amounts

1:44:28So to me, uh, like when I hear the lower amounts

1:44:32That's applicable to how the previous two buildings were determined in sequence

1:44:37so

1:44:40To me to me. I'm just wondering how you're saying it's not clear

1:44:45When in the correspondence, there's a clear

1:44:50tie-in

1:44:52To reflect on past amounts, which is reflective of the other projects that were done

1:44:58So to me the client is saying that

1:45:02As an option and then our staff say yes

1:45:06And then again, there's no then you have to go to council. There's no suggestion to do that. So

1:45:12Do have you have you discussed how like how do you explain?

1:45:18Where it says in the email

1:45:21To credit for the lower amounts and lower amounts must be

1:45:25applicable to the lower amounts that were

1:45:29Subject to the previous buildings

1:45:31That's the way I read it. So please if you could just try to try to

1:45:35How can it not be read that way? I guess it's my question

1:45:39Okay, so through you and to you mr. Mayor

1:45:43I I believe it's it's a very vague statement

1:45:46I think it can also be read is that's how the credit arose was from the payment on the lower rates

1:45:52But but it's certainly

1:45:55And you know, it was shared

1:45:57um

1:45:58In 2023 um, if you look at the other exchange

1:46:03Staff again went back through this. I say, um, uh,

1:46:06Ms. O'Dwyer who is here?

1:46:09noted in her email and you'll find that in pet and tab six

1:46:14um that

1:46:16um

1:46:17I don't see anywhere in the email chain that it commits to holding 29 rate 2019 rates for building C

1:46:24So I I I there may have been missed communication

1:46:27There may have been words that were missed with the benefit of 2020 hindsight and seeing how it's being interpreted now

1:46:34We can see it that way, but I think at best it's vague

1:46:39um, but again at the end of the day the important thing is that

1:46:44You know a junior analyst in our finance department does not commit the city to something of that magnitude

1:46:50It would have had to come back to council

1:46:53Interest was paid

1:46:55It may not be the outcome that the owner wanted

1:46:58But I don't think there was any reasonable expectation of that outcome given that given the

1:47:04fact that not five it was a five it was a five years from

1:47:08Uh five year old rate

1:47:10Was being requested. Okay. Thank you and councillor Allt. I see your hand so you can put it down

1:47:16I see it. I'm just going to finish with my last question. Okay. Thank you so much

1:47:21um

1:47:23I hate I hate to ask a math question

1:47:26But here we here we go

1:47:28let

1:47:30Pretending and agreeing if we say that the interest was paid as you as your submission lays out for us

1:47:37Is there a difference though?

1:47:40between the interest

1:47:42and what the dc

1:47:45Applicable rates were compared to the old to the new that there's still a differential

1:47:52Yeah to you and through you mr. Mayor. Absolutely. I do know absolutely. Um, there is a is that outlined somewhere?

1:47:59Uh, like like to dumb it down if someone's asking for a hundred dollars

1:48:09But you know someone says but you made ten dollars in interest would still there be ninety dollars left over or was the interest

1:48:16A hundred and ten dollars and there's nothing that's owed like I'm trying to say what what was greater than the two

1:48:22The difference between the old dc applicable to what the city is trying to apply

1:48:27Versus the interest also paid. Is that differential greater or lower?

1:48:32So I think

1:48:37I'm trying to I am struggling. I went to law school because I'm not a Calvary student. Um, it's okay. It

1:48:47Is there a difference between

1:48:50The delta in dc's as opposed to

1:48:54the average prime rate from july of 2022 until september of 2023. Yes

1:49:02There is a delta

1:49:03I would need to get some help to calculate that if you want that number from me

1:49:09Okay, and I can take a few minutes. No, no, no, no, no, no, it's okay

1:49:12I'll just I'll try to do some back of the napkin. Okay

1:49:16And I guess I'm sorry. I can't counselor all the appreciate your patience. I do have one extra call. Sorry question

1:49:22That's just been triggered

1:49:24I guess the

1:49:26the position of

1:49:28of the city side

1:49:29Is trying to suggest that well, there was interest paid

1:49:34or

1:49:34You're alleging that the client made a

1:49:38Almost a wise business decision just because the money was left there. There was interest paid

1:49:43but

1:49:44are you

1:49:46Are you submitting that because you knew what the client would have done if they had had that 800 thousand dollars in their pocket?

1:49:52because

1:49:53They like they could have put it in tesla stock if they wanted to I made a lot more than 61 thousand dollars in interest

1:50:00So so to to there's no evidence. Sorry to you and through you. There is no evidence before this appeal tribunal as to what

1:50:10Else might have been done and I can't speculate as to what else might have been done

1:50:15What I am suggesting is that there is no unjust enrichment because the

1:50:21Because the owner was credited at the same rate of interest as the city would charge

1:50:27And that is a fair and reasonable rate of interest. No, I'm not I can't get into mr.

1:50:33Shumbry's head and or know what he would have done

1:50:38If he were if it were clear

1:50:41Back in 2022 that what he was asking for was can I get the 2019 rates for building C and was told no

1:50:50That unfortunately that discussion didn't happen. It might have saved us a bunch of time in council chambers

1:50:56But what we're left with is sitting standing here in 2024 on valentine's day of figuring out what the right result is

1:51:04And we do love it. Yes. Okay. Hey, I appreciate I appreciate that. I am I literally am trying to drill down to understand

1:51:11I appreciate I really truly am

1:51:14Okay, councillor all thank you so much over to you

1:51:17Thank you very much, mr. Mayor

1:51:19Through you to the

1:51:21the

1:51:22Delegate pardon me

1:51:25I've heard you say there was no unjust enrichment

1:51:28And that there was a fair and reasonable return

1:51:32I have two questions. It strikes me that what you what possibly has also happened is that mr. Shumbry

1:51:40Was not clear but was in your opinion ambiguous as well. Is that correct?

1:51:49Um, to through you mr. Mayor to councillor alts. I do believe that there was

1:51:58There was it what what was being requested was not clearly spelled out

1:52:03Um, and it may it may be innocent on both parts

1:52:07Um, but I don't believe there was a meeting of the minds as to what was being done when that money was being left with the city

1:52:13I don't believe that there was a clear communication to staff that 2019 rates were being requested

1:52:20Thank you. Uh, the next point

1:52:24With respect to the junior

1:52:26Analyst miss rau or any junior analyst for that matter

1:52:30Do we have anywhere at any time written record of any arrangement being received?

1:52:39recorded or

1:52:40presented to a

1:52:42supervisory staff member

1:52:47I have not I I have

1:52:50Through through you mr. Mayor to councillor Allt. I have not seen

1:52:54Any exchange I don't I I I'm not a fine in the finance department

1:52:58So I've been provided what I understand and what I believe is the same relevant communication on both sides. So I don't know

1:53:06Um, whether that was escalated or not or not. I I only know what

1:53:13What was communicated at the time about

1:53:17Not refinding the money

1:53:19Thank you

1:53:21And the last question with regards to this particular issue the question really is a an important one

1:53:29Um, if there was a miscommunication by our staff

1:53:33Uh, what is the obligation of the the city for a staff error when something is required to be approved by

1:53:42Council and was not

1:53:48um through you mr. Mayor to councillor Allt

1:53:51um, we

1:53:54At law um the entering into an of an agreement can be restricted our bylaw sets out

1:54:02Um, and and it's a public document how a repayment agreement can be entered into

1:54:09So I believe that

1:54:11um

1:54:12the

1:54:13Owner could have

1:54:15Perhaps should have

1:54:17um

1:54:18sought advice as to how do you enter into a repayment agreement?

1:54:23Um, but this but but but our terms are clear in their public

1:54:27So I you know, I don't believe I don't believe that the taxpayers should be held responsible

1:54:35for a vague

1:54:38exchange of communications from the summer of 2022

1:54:42Thank you very much

1:54:46Great. Thank you to seeing nothing further really really appreciate it and I'm just calling to my my my order here

1:54:53um, so it uh

1:54:56I guess I would now ask the completeness representative

1:55:00Uh, uh to have any submissions or for a response, uh to what you've heard

1:55:10Thank you here worship. I have uh three three points um from miss sorton submissions that I'd like to respond to

1:55:17Four points. Excuse me. We're doing a lot of numbers today. I think I could get four right

1:55:22um

1:55:22The first point is that um miss Thornton submitted to you that mr. Shembury requested that the city hold on to the the money

1:55:29That's not accurate. It is clear from the communications that there was a choice

1:55:34Offered to the city. Mr. Shembury gave the city a choice. It says if the city so chooses

1:55:40It can hold on to the money and apply the lower rates

1:55:44expressly refer to the lower rates

1:55:47My client will tell you that he would not have left the money with the city

1:55:51He he would have uh invested it differently

1:55:54Had he have known that the agreement to apply the lower rates was not going to be honored

1:56:01And quite respectfully if miss miss rown, I apologize for for that for stating her name

1:56:08If she didn't know what was meant by lower amounts

1:56:12When she agreed to keep the money she should have inquired before she she entered into that agreement

1:56:19And she didn't so and I think it's quite clear what mr. Shembury meant by

1:56:24Referring to applying the lower amounts and miss rau indicated that she would make the adjustments in respect of building c

1:56:33The second point excuse me one second

1:56:41miss Thornton referred to um phasing

1:56:45And the concept of buildings a and b being part of the same phase

1:56:50Well, that's maybe true for construction for phasing purposes and planning purposes

1:56:56That is not the case in respect of the development charges act. They are not part of the same phase

1:57:01under section 26 subsection 1.2

1:57:05It states

1:57:06If a development consists of two or more phases that will not be constructed

1:57:10Concurrently are not anticipated to be completed in and are anticipated to be completed in different years

1:57:17Each phase of the development is deemed to be a separate development for the purposes of this section

1:57:22Building a was built in 2019 three years later building b was built

1:57:26They're not part of the same phase for purposes of development charges. That is not why

1:57:31They were both applied that the 2019 rates were applied to both of those buildings

1:57:36The reason the 2019 rates were applied to both of those buildings is because there was an agreement to apply the 2019 rates

1:57:44And that agreement was set when the prepayment was made in 2019

1:57:55um miss Thornton has impressed upon you that

1:57:58Only council can make can enter into an early payment agreement under section 27

1:58:03I submit to you that that is not correct in law

1:58:08The act expressly says that a municipality

1:58:11Can enter into a prepayment agreement

1:58:14The bylaws which were first expressly to council

1:58:17Are not in conflict with that you can comply with both of those by having staff enter into an agreement on behalf of the city

1:58:28The bylaw does not limit

1:58:30A representative of the municipality from entering entering into a prepayment agreement

1:58:34And that is exactly what happened here

1:58:37Staff is not disputing that a prepayment agreement exists between for buildings a and b

1:58:45Building b built three years after building a

1:58:48It a prepayment agreement was applied

1:58:51And if that wasn't put to staff to council then it was entered into by staff and that agreement was honored in respective buildings a and b

1:58:59You have a prepayment agreement that was authorized by staff and entered into by staff

1:59:04And quite frankly if these facts were put before a third party a body independent body

1:59:10Such as the Ontario land tribunal they would look at the facts

1:59:14They wouldn't need to see a signed agreement from council

1:59:16They would look at the facts to determine whether in law a contract exists

1:59:21And in my submission it would be found by a third party independent party that a contract existed in this case

1:59:30and fourth

1:59:33Miss Thornton

1:59:34asserts

1:59:36Very boldly I would I would suggest that there is a business case

1:59:40For mr. Shembury leaving the 800 000 with the city

1:59:44And quite frankly as miss Thornton

1:59:47Acknowledged she can't get into the the mind of mr. Shembury and and what he would have done with that money

1:59:53It's simply not for the city to decide what is good business for my client

1:59:57That is not the reason why mr. Shembury left the money with the city

2:00:02He left the money with the city because he was under the understanding

2:00:05That the lower rates from 2019 would be applied

2:00:11Mr. Shembury is an unestute business person

2:00:13And i'm sure he could have found ways to make more than 61 000 dollars on that money over the course of that period of time

2:00:22And the the quantum difference between that 61 000 dollars

2:00:26Which I say is a smoke and mirrors calculation

2:00:30And what my client is seeking

2:00:33Is uh, sorry I should have done the math it's 153 000

2:00:37minus 61

2:00:40So that's 92 000 dollars quantum

2:00:43And keep in mind that the whole time that that money

2:00:46Was sitting with the city since 2019 it has been collecting interest on it

2:00:50in its reserve fund

2:00:52And that interest is well above the 61 000 that they're willing to suggest was credited to my client

2:01:00So there is in fact a windfall to the city here and that constitutes unjust enrichment

2:01:06And again, there is no the 61 000 dollars

2:01:10Is a made-up number there is no credit for 61 000 dollars in interest

2:01:17There there is no deduction that was made for that money sitting with the city

2:01:21They simply deducted the 81 the 800 000 dollars

2:01:25And there was no credit for any interest that was accruing to the city's benefit

2:01:29Since 2019 at all

2:01:32Subject any further questions those are my reply submissions. Okay. Thank you. Thank you very much

2:01:39Um, is there any other first questions before we go into consideration of this matter?

2:01:44Okay, uh counselor

2:01:46Uh, Gibson or Rourke and goller

2:01:50Thank you through mr. Mayor. Thanks for your rebuttal. I just wanted to talk about the phasing as well

2:01:56That that sort of piqued my interest when our city staff were talking about it. So you're asserting that it wasn't

2:02:04They weren't expressly different phases

2:02:07Because you you you entered into what you're calling your prepayment agreement with the city

2:02:11You you put a big pot of money in for development charges

2:02:14those development charges were honored at the lower rate in 2019 and 2022

2:02:19And you assumed based on your correspondence with staff that the same agreement would happen for building c

2:02:24Like the same agreement was still in place for building c. Do I do I have those do I have that understanding correct?

2:02:30You do sir

2:02:31Okay, thank you

2:02:34Um, a Rourke and then goller

2:02:38Uh, thank you. Mayor Guthrie

2:02:40through you to miss meter just two questions

2:02:44I'm looking at the emails

2:02:46from chano doir page 24 in your tab

2:02:50and

2:02:51and the last paragraph says

2:02:53You're getting a benefit of 158 000 from being charged the rates in effect on july 14 2022 plus interest

2:03:01Instead of the rates in effect today

2:03:03Which is prescribed in the bylaw

2:03:06and then in the email

2:03:09On september 27th because I'm finally going in the right order here

2:03:14An email from a miso doir to mr. Pierce

2:03:17Says we are essentially crediting you for interest on the prepayment at the same rates

2:03:22We charged interest on the 2022 rates as outlined in the bylaw. So can can you help me understand you're saying?

2:03:31The city held the 800 000 for a period of time and accrued interest on that

2:03:37and did not then apply it

2:03:40But the emails from miso doir seemed to indicate otherwise. Can you help me?

2:03:44parse that out

2:03:45I agree. There's some confusion there the the interest

2:03:49No interest was applied or deducted from the payment of dc's for building c in respect of the 800 000

2:03:57The city is suggesting that there is some benefit here

2:04:01Because they applied the 800 000 and didn't apply interest to it

2:04:08Because they didn't apply they did at first and then there was a back and forth and then they

2:04:13chose they

2:04:14agreed that it was inappropriate to charge interest against the 800 000

2:04:18But they're saying because they didn't charge interest to us

2:04:22For having the 800 000 in your account that we got some kind of a benefit out of that

2:04:27The interest is charged under the act because the city is assumed to be without the funds

2:04:32That's why the city is now allowed to to charge interest

2:04:35And they're assumed to be without the funds because the dc's are frozen from a date

2:04:41That predates when you actually pay them. There's no interest

2:04:44This this again, I hate to use the expression, but it's smoke and mirrors. There's no interest

2:04:49That has been credited to my client for the 800 000

2:04:54Okay, thank you and in respect of I just want to respond to what

2:04:59You've pointed out miss shanna miss o'Dwyer's email on page 24

2:05:05She suggests you are getting a benefit of 158 000

2:05:09from being charged the rates in effect in 2022

2:05:12Plus interest instead of the rates in effect today, which is prescribed in the bylaw

2:05:17There's no benefit there either

2:05:19That is the law they've by applying the 2022 rates

2:05:23After the prepayment is exhausted. That's the law. That's not a benefit

2:05:28That's like comparing by comparing what my client would pay under the the 2023 rates

2:05:34To say you're getting a benefit because you're not paying under these rates. It's like saying

2:05:38You know, let's look at what the rates will be in 2026 and what you would have paid then

2:05:44It's it's equally irrelevant to reference

2:05:47Um, uh, the the difference between what they would pay

2:05:50um in 2024

2:05:52Um

2:05:54To to what they are legally were required to pay

2:05:58Okay, thank you and lastly it's countergoller

2:06:04Uh, thank you. Thank you for for clarity on this the

2:06:10amount for interest was that

2:06:13Ever paid back to you the the 64 or was that a

2:06:18Content towards the amount what happened to that interest amount? It was never applied

2:06:23It was never applied. Okay. Okay. Um, and um

2:06:29Just so that i'm clear this the whole argument

2:06:33Is that on what is this august 16th when

2:06:38Gordon wrote

2:06:39for the lower amounts

2:06:42We're making a big assumption that they're talking about the 2014 2019 rates

2:06:49Right that's because there's no actual there's no indication that there was any agreement to those numbers

2:06:55So we're just saying we're inferring from those two words lower amounts to mean 2020

2:07:012019 rates will apply to the 2022

2:07:04Is that correct through you

2:07:07Mr. Mayor uh to countergoller. I respectfully disagree with that interpretation. I think it's quite clear

2:07:12Mr. Shembrie referred to the lower rates

2:07:16Ms. Rao accepted that and this is consistent with how the prepayment funds had been treated for buildings a and b

2:07:22It was simply an extension of that agreement or confirmation that that agreement would would continue until it was exhausted

2:07:28I think it's quite clear when he was referring to the lower rates

2:07:31That he was referring to the 2019 rates that the rest of the prepayment had been

2:07:36Um applied against

2:07:39Okay

2:07:42Thank you, and I was wrong

2:07:44Um, I'll hold you councillor dower, but just when you're done just so everyone knows um, actually we go back to to allison

2:07:51We have a response from allison and then we can go into deliberation. Okay, uh, so

2:07:57Over to you councillor this may be a question for allison, but I do see in this is about the 68 000 and the credit

2:08:04Um, because it does say on page

2:08:0823 tab 5

2:08:10that

2:08:12We are essentially crediting you this is um from

2:08:16Mr. Dwyer

2:08:17We're essentially crediting you for the interest on the prepayment at the same rate

2:08:21We charged interest on at the 20 22 rates as outlined in the bylaw at a value of 68 000

2:08:28And you're saying that smoke and mirrors or is is is that what you're talking about?

2:08:32Yes, because there was that smoking there's no credit

2:08:35They no credit was given that that was not deducted that that interest was not deducted from the payment. Okay. I'll ask

2:08:42I'll ask

2:08:43Well, just on a point of procedure

2:08:46um

2:08:47Through you mayor gun three. I don't believe procedurally that the city

2:08:51staff has a right of a further right of sir reply

2:08:54Um, this is my complaint and I have the last word

2:08:58Ms. Uh, ms. Thornton through her

2:09:01Submissions was in a position to reply to my submissions. This is an opportunity for me to reply to her submissions that I wasn't anticipating

2:09:10We could go on and on if if she were to give be given an opportunity to serve reply to me

2:09:15No, no no problem. I I appreciate that. We don't do this every other day. And so that's fine

2:09:22I'm just going to throw it out in the room here. I was following the the script that was given to me as the chair for this

2:09:29Um under the impression that actually we were I think ending with you

2:09:33But then I was I was told that we needed to go back

2:09:38to

2:09:39to allison so um

2:09:42I'm like putty in the clerks and uh and and others hands

2:09:46I was so there is a there is a little bit of a discrepancy between the script. I was given and what is on the agenda

2:09:53so

2:09:54procedurally can someone

2:09:57Maybe I'll just confer to the clerks

2:09:59and uh to our legal matthew or someone that could just

2:10:03Help help me help me out on this. Uh

2:10:05Brad Brad appreciate that

2:10:07Through through you mr. Mayor. It's important before council

2:10:10Deliberates that members of council as a tribunal believe they have all the

2:10:14Evidence and information they need to make a decision if you wish to ask any more questions of either party now or the time before we deliberate and closed

2:10:23Okay, so at this point it could be either party if we wanted to

2:10:27If there is further evidence or information that members of council as a tribunal feel they need

2:10:33This is the opportunity with both parties present

2:10:36Okay, is there

2:10:37I'm sorry to ask this but is there a process in law that stipulates the process we are to follow?

2:10:44And if such a process exists

2:10:47Am I following it right now? Or am I not because I I want to make sure that I'm

2:10:53I just want to make sure I'm doing this right so maybe I could just get some legal advice

2:10:58To you mr. Mayor is about process so it's not nothing more than that through you mr. Mayor

2:11:02Yes, that process as they lined is correct. There isn't another reply from miss Thornton, but council can ask questions

2:11:09Uh of either party at this point for any other evidence or gaps of information that they require

2:11:15Okay, so it's not that we have another actual formal

2:11:19Presentation back from but we can ask some questions. Okay. Thank you that that makes it clear. All right

2:11:25So no formal back and forth at this point. I get it. But is there any other questions before we go into deliberations then?

2:11:33Okay, councillor work

2:11:35And sorry, just want to make sure before you go away. Is there anything else for the uh,

2:11:42Okay, my question is for miss meter

2:11:44Okay, go ahead. Um three america three. Sorry to circle again

2:11:49So is it your assertion that mr. Schenbury?

2:11:53Believe the staff could enter into that agreement in 2019

2:12:01Sorry through you mr. Chair um to councillor work

2:12:05um

2:12:06Yes, it is my my clients would would say there is a prepayment agreement there and the city acted on it

2:12:13So the staff did

2:12:15In fact enter into a prepayment agreement and acted on it

2:12:19So through you my death three so I don't know what the size of schenbury is in terms of development

2:12:24But this is a large development, right?

2:12:27So is this a developer who would enter into agreements like this with other municipalities and would know whether it needed a formal agreement or not?

2:12:35um

2:12:36Every municipality deals with prepayment agreements or early payment agreements differently

2:12:42and it's um

2:12:44In the act and and the case law would suggest that it does not have to be a council ratified agreement

2:12:53okay, um

2:12:54maybe

2:12:55Just to finish my thought

2:12:58So here's a developer who would

2:13:01have these

2:13:02agreements with other municipalities

2:13:04Would would have not have been customary to then seek some legal advice internally to have a more concrete paper trail than an email

2:13:11from a junior analyst

2:13:15Through you mr. Chair

2:13:17I'm not sure I understand

2:13:19We are asserting that a prepayment agreement existed the city is acknowledging that in respect of building a and b

2:13:27um, so I'm I'm not sure I think I could we could

2:13:31Surmise the same of city staff and whether or not they should have sought legal advice before agreeing to

2:13:37um

2:13:38Maintain to hold the 800,000 and and apply the lower rates. Okay. Thank you

2:13:43And mayor Guthrie, I have a question for staff. You have still the floor. Sure. Thank you. So through you, uh, mayor Guthrie

2:13:52Maybe to miso Dwyer

2:13:55There's uh, or or miss thornton. I'm not sure what the responding process is

2:14:00I'm looking at the email from

2:14:04September 20th

2:14:05It's the email from miso Dwyer and it says

2:14:09I'm not sure so

2:14:12Um, it looks to me like you were paying DCs for building a and b and overpaid by 809,000 which was then going to be refunded

2:14:19I'm not sure why it ended up not being refunded

2:14:22um

2:14:24So I'm I'm just wondering

2:14:27What are the processes to sort of validate this all the way through?

2:14:31Personally, I'm I'm looking at a chain of emails and not quite certain. There seem to have been errors in calculation

2:14:36There seem to have been misunderstandings

2:14:38um

2:14:40What is your understanding of your?

2:14:43Staff's ability to to make a decision like that would they ordinarily have gone to a supervisor?

2:14:48Would there be more paper around this?

2:14:50To explain sort of what happened here

2:14:57So, um counselor work, um

2:15:00I will attempt to answer and if I need some further assistance from miso Dwyer. I will I will do so

2:15:06um the

2:15:09My my understanding is that it was

2:15:12understood that

2:15:15Um, a mount was going to be held on as a credit on file for a future payment coming from the developer

2:15:23um

2:15:25It was duly noted in the file and you know when it came up in 2023 that credit was recorded

2:15:31um, and you know

2:15:34Was accounted for in the dc calculation

2:15:37um

2:15:38I haven't seen um, and if you want to ask miso Dwyer any any further

2:15:44um significant or relevant

2:15:47documentation of that it was it was recorded on file as a credit and was applied at the time that the

2:15:54dc did become payable

2:15:59Through you mega through miss thornton the crux the matter correct me if i'm wrong the city is saying it was just a credit

2:16:04We were going to apply it to the next time dc's are payable and the complainant is saying no it was more than that

2:16:10It was a credit with an understanding. They were going to pay the 2019 dc rates. Is that correct?

2:16:16Um through you mr. Mayor to councillor work. Yes

2:16:19In a nutshell that is the city's position that it was a credit that

2:16:24A member of staff can can hold on and and record a credit a member of staff cannot enter into a prepayment agreement

2:16:31Okay, thank you

2:16:35So that looks like it's it

2:16:38Thank you very much. Thank you to

2:16:41Uh to both of you for for submitting

2:16:44uh council will now

2:16:46withdraw to deliberate and um as per section 9 1

2:16:51Be of the statutory powers procedure act

2:16:54Um intimate financial or personal matters or other matters may be disclosed at the hearing

2:17:00Of such a nature having regard to the circumstances

2:17:03That the desirability of avoiding disclosure thereof in the interests of any person affected or in the public interest

2:17:10outweighs the desirability of adhering to the principle that hearings be open to the public

2:17:16So we are going to uh now move into a closed session where we'll deliberate and um

2:17:25And then we will return and uh and go from there once we're done

2:17:29To the clerks. Do you need a motion? Is that considered a motion that requires us to go back or does the statutory powers procedure act?

2:17:37Just me stating it give us the ability to go back. I can't remember

2:17:43Through you mr. Mayor, I don't think a motion is necessarily required because we're sitting in the introspective for consistency

2:17:47It doesn't necessarily hurt either

2:17:50Okay, well, you know, let's just do it as a motion. It's just captured. It's fine

2:17:54So councillor busentill and councillor roark, you know, you know that you'd second. Is there anyone against that?

2:18:00Okay, hearing and seeing none. That's unanimous

2:18:03So we will convene and closed session now and once done we'll come back out under this procedural act to

2:18:11Go from there. Thank you very much

2:18:14Okay, thank you. We are back from our deliberation

3:12:57Again, this is the public meeting to hear a complaint under section 20 of the development charges act 1997

3:13:04And I have been given permission to make this very short statement

3:13:10Here that council sitting as the tribunal deliberated in closed session

3:13:15They have reserved their decision which will be rendered in writing as per the deadlines under the development charges act section 21

3:13:24And that's it. Okay, so you'll be getting something in writing

3:13:27um, so thank you to both parties. Um, we appreciate that and

3:13:33With that I will just ask for this meeting to be

3:13:39Done do I have to do an adjournment?

3:13:41Yes, okay adjournment by councillor Goller

3:13:44seconded by councillor Allt

3:13:46anyone against adjournment of the tribunal

3:13:49No one so the tribunal is officially over

3:13:53and guess what now we are going to be taking a

3:13:5715 minute break

3:13:59before we come back

3:14:01to

3:14:02consider next steps on the

3:14:04First topic we started at with today at 10 o'clock in the morning

3:14:08So we will see everyone back here at just before a quarter to nine. Thank you