Development Charges Report, City of Greater Sudbury

Request for Decision
Proposed Changes to City's Development

Charges By-Law and Rates

Presented To: Finance and
Administration
Committee
Presented: Tuesday, Apr 15, 2014
Report Date Wednesday, Apr 09,
2014
Type: Presentations
Recommendation
THAT the City of Greater Sudbury receive the report titled
Proposed Changes to City's Development Charges By-Law and
Rates from the Chief Financial Officer/City Treasurer dated April
9, 2014; AND THAT feedback from the planned community
consultation be summarized for City Councils consideration on
or before the June 10th, 2014 Council meeting.
Background
Please refer to attached report.

Signed By
Report Prepared By
Apryl Lukezic
Co-ordinator of Budgets
Digitally Signed Apr 9, 14
Division Review
Ed Stankiewicz
Manager of Financial Planning &
Budgeting
Recommended by the Department
Lorella Hayes
Chief Financial Officer/City Treasurer
Recommended by the C.A.O.
Doug Nadorozny
Chief Administrative Officer
Staff Report: Proposed Changes to the Citys Development Charges By-Law and
Rates

Executive Summary
Citys current development charges by-law, #2009-200F expires on July 9, 2014.
In order to continue to charge development charges, City Council must approve a new
Background Study and By-Law, before July 9
th
, 2014.
A Draft Development Charges Background Study and Draft By-Law has been prepared
for Councils consideration, pursuant to the Development Charges Act, 1997, in
consultation with Hemson Consulting Ltd.
City of Greater Sudbury (City) collects development charges from new construction to
pay for a portion of net municipal growth-related capital costs in accordance with the
Development Charges Act, 1997.
Growth related capital costs are costs that result from the expansion of services to meet
the needs of household, population and non-residential growth.
If development charges are not fully implemented, a portion of these growth-related
capital costs would need to be funded from other non-development charges sources
such as property taxes and/or water/wastewater user fees.
The proposed development charge rates as outlined in the draft background study are
as follows:
o All Services:
Single family/semi detached dwelling $17,163 per unit (increase of $2,378
or 16%)
Multiples $10,098 per unit (increase of $840 or 9%)
Industrial $4.75 per square foot (increase of $0.42 or 10%)
Non-industrial (Commercial/Institutional) $8.83 per square foot (decrease
of $1.25 or 12%)
Proposed DC rates, except non-industrial, are reflecting increases
primarily due to additional water/wastewater growth related capital
projects, offset by a reduction in roads growth related capital costs
compared to the 2009 study.
Proposed Changes to City's Development Charges By-Law and Rates 1/15
Proposed non-industrial rates of $8.83/ sq.ft. are lower in comparison to
current rates of $10.08/ sq. ft. due to the decrease in the roads growth
capital projects and the weighting based on traffic volumes generated.
o Excluding Water/Wastewater Services
Single family/semi detached dwelling $13,363 per unit (decrease of $396
or 3%)
Multiples $7,862 per unit (decrease of $754 or 9%)
Industrial $2.64 per square foot (decrease of $0.95 or 26%)
Non-industrial (Commercial/Institutional) $6.72 per square foot (decrease
of $2.62 or 28%)
Proposed DC rates excluding water/wastewater services have decreased
primarily due to the reduction in roads growth related capital costs
compared to the 2009 study.
It is proposed that rates be effective on July 10, 2014 and that future year index
adjustments occur on July 1
st
of each following year. The new by-law would be in effect
for 5 years from the effective date of Council approval.
Development charge rates, as set out in the Background Study, are calculated on a cost
recovery basis. The changes in the rates by service category increased primarily as a
result of revised growth forecasts, updated capital programs, and updated replacement
costs for service level assets.
A few examples of planned and/or completed capital growth projects (which are partially
cost recovered as outlined in DC Background Study Draft Executive Report) include:
Maley Drive, Lasalle/Notre Dame Intersection Improvements, BioSolids Facility, second
ice pad at Gerry McCrory Countryside Complex, Expansion of the South Branch Library,
expansion for Fire/EMS Station, upgrades to various Water and Wastewater Treatment
Plants.
The capital growth programs include the forecasted net municipal cost. The projects do
not include any portion of costs that may be funded by external funding sources and do
not include any projects that would be funded 100% by local services provided in
accordance with the Development Cost Sharing Policy.
The Citys proposed development charges for a single family dwelling are approximately
32% lower than the provincial average of $25,106 from the 2013 BMA Study.
The proposed by-law revisions if adopted by Council, includes several items such as
continuing the exemptions for Designated Exempt Areas, and extension of
redevelopment credits from date of demolition permit from 2 years to 5 years. In
addition, Council may wish to consider an exemption for affordable housing development
that meet specific criteria and a service agreement with the City.
The City has planned an extensive consultation process, including a Public Open House
at Tom Davies Square on April 24
th
, and a Public Input Meeting on May 6
th
, to solicit
feedback on the proposed by-law and background study. City Council approval is
scheduled for June 10
th
or 24
th
2014.
1.0 Introduction
On November 26, 2013 the CFO provided City Council with an overview presentation and report
regarding the process and timelines to update the Citys Development Charges By-Law.
Since the fall of 2013, City staff and Hemson Consulting has been working to prepare the draft
background study, updating the growth forecast, and preparing the list of growth related capital
projects.
The purpose of this report is to provide the Finance and Administration Committee with a
summary of the Citys Background Study and the proposed Development Charges Rates, in
accordance with the Development Charges Act (DCA).
The City of Greater Sudbury collects a development charge (DC) at the building permit stage to
recover for growth related capital costs. The Citys current by-law 2009-200F expires on July 9,
2014 and in order for Council to continue to collect DCs after July 9, 2014, a Background Study
and By-Law must be prepared and approved by Council.
1.1 What are Development Charges?
Development charges are charges imposed by municipalities on developers to pay for
increased capital costs required to support the anticipated residential and non-residential
growth. Development charges provide municipalities with a tool to help fund the infrastructure
needed to serve new growth. They help finance the growth-related capital costs of providing
important services like roads, water and wastewater services, police, fire and transit.
Most municipalities in Ontario use development charges to ensure that the cost of providing
infrastructure to service new development is not borne by existing residents and businesses in
the form of higher property taxes and/or water and wastewater user fees.
Development charges are imposed against new development, re-development and expansions
for residential and non-residential buildings or structures.
The principle behind development charges is that growth pays for growth, meaning
development pays their share of capital costs associated with new growth and development
while taxpayers/ratepayers fund capital infrastructure that benefits the existing population.
However, in reality, development charges cannot fully fund growth due to statutory limitations.


1.2 Overview of Report
This report will provide details relating to the Background Study, DC rates and by-law as follows:
2014 Proposed Development Charge Rates (section 2.0)
Growth forecast (section 3.0)
Capital programs required to support forecasted growth over the next 10 years; these
details will be outlined in the background study and must be approved by Council with
the adoption of the background study (section 4.0)
Exemptions (section 5.0)
DC By-Law Policy Decisions for Councils Consideration(section 6.0)
BMA municipal comparisons (section 7.0)
Development Charges Act, 1997 Provincial Review Consultation (section 8.0)
Housekeeping Changes to Proposed By-Law (section 9.0)
Conclusion and Next Steps (section 10.0)

2.0 Proposed Development Charge Rates
Attached is the executive summary from the City of Greater Sudburys draft Development
Charges Background Study prepared by Hemson Consulting Ltd. A copy of the full report can
be viewed at: http://www.greatersudbury.ca/devcharges. These proposed rates are calculated in
accordance with the DCA and are based on the list of capital projects that intend to be
undertaken in the next 10 years to support the forecasted growth projections for households and
employment.
The development charge rates are based on the following categories based on type of
development:
Residential (per unit):
o Single Family Detached and Semi Detached Dwellings
o Multiples
Non-Residential (per square foot):
o Industrial
o Non-Industrial (Commercial/Institutional)
The following is a summary and comparison of the development charge rates by category in
effect and the calculated proposed DC rate (see Appendix D for breakdown of DC rates and
comparison by service area):

DC Rate Comparison for Residential Single Family and Semi Detached* Dwellings:
Per Unit Current Proposed
Change
($)
Change
(%)
Total DC Rate $14,785 $17,163 $2,378 16%
Total DC Rate
Excluding Water
& Wastewater ***
$13,759 $13,363 ($396) (3%)

* In the 2009 by-law, semi detached dwellings were charged at the multiples rate. However,
based on review of other municipalities, semi-detached dwellings are considered a single family
dwelling and charged at the respective rate. The proposed by-law has been revised for this
change to be consistent with other municipalities.

DC Rate Comparison for Residential Multiples**:
Per Unit Current Proposed
Change
($)
Change
(%)
Total DC Rate $9,258 $10,098 $840 9%
Total DC Rate
Excluding Water &
Wastewater ***
$8,616 $7,862 ($754) (9%)

**Multiples include one or more dwelling units (i.e. apartments, row houses, townhouses,
duplex, triplex, etc) but does not include single detached or semi-detached units.


DC Rate Comparison for Industrial:
Per Square
Foot
Current Proposed
Change
($)
Change
(%)
Total DC Rate $4.33 $4.75 $0.42 10%
Total DC Rate
Excluding Water
& Wastewater ***
$3.59 $2.64 ($0.95) (26%)

DC Rate Comparison for Non-Industrial (Commercial/Institutional):
Per Square Foot Current Proposed Change
($)
Change
(%)
Total DC Rate $10.08 $8.83 ($1.25) (12%)
Total DC Rate
Excluding Water
& Wastewater ***
$9.34 $6.72 ($2.62) (28%)

*** The DC rate excluding water and wastewater would be adjusted if building would
connect to only one of these services.

3.0 Growth Forecast
The table below illustrates the estimated growth for the next 10 years is 4,699 household units
and 4,715,370 square feet in non-residential building space. Please refer to the Appendix A,
within the Development Charges Background Study Draft Executive Report (pages 10 to 16)
for the growth forecast prepared by Hemson Consulting.

2013 Estimate

2014-2023

Growth

Total
Households 68,643 4,699
Consists of:
2,809 (Singles/Semis)
1,890 (Multiples)
73,342
Forecast Population in New
Units
11,513
Employment 78,698 3,255 81,953
Non-Residential Building
Space (sq.ft)
4,715,370
Consists of:
1,389,000 sq.ft (Industrial)
3,326,370 sq.ft
(Commercial / Institutional)

This growth forecast is consistent with the actual growth experienced over the past 5 years.

4.0 Growth Related Capital Projects:
Growth related capital costs are costs that result from the expansion of services to meet the
needs of household and population growth. These capital costs are reduced by an allowance
for provincial and/or federal grants and other sources of funding as well as other deductions
required by the DC Act to determine the net capital cost for DC recovery.
City staff has developed a detailed list of growth related capital projects that are required to
service the anticipated growth in the City of Greater Sudbury. The majority of these projects
have been derived from the annual five-year capital budget, and various master plans and
studies. Each project has been reviewed to calculate the growth related portion on factors such
as, additional lanes for roads, additional square footage for buildings, and additional capacity in
plants based on future growth.
See Appendix B and C, within the Development Charges Background Study Draft Executive
Report (pages 17 to 48) for the Citys detailed list of growth related capital projects forecasted to
2023 for general services and post 2031 for engineered services.
The following are some examples of eligible growth related projects included in this study:
Addition and expansion to Citys road network: for example - Maley Drive, Lasalle
Notre Dame intersection, Four Corners intersection, network expansions in
accordance with Transportation master plans and official plan, active transportation
expansions, various 2 to 4 lane expansions, turning lanes, streetlights.
Expansions to municipal facilities such as South Branch library, Transit garage,
Fire/EMS stations, Police headquarters.
Additional leisure and recreational spaces and facilities such as soccer fields,
second ice pad at Gerry McCrory Countryside Complex, splash parks, ski hill
expansion, Bell Park expansion.
Water and Wastewater expansions such as Wanapitei Alternative Trunk Main, New
Valley wells, BioSolids, various plant expansions, various system expansions to
accommodate growth.
Studies that have a growth component: such as water/wastewater master plan,
official plan, zoning by-law, development charges study, development guidelines
document.

The following is a summary for the next 10 years:
(in millions) General
Services
Engineered
Services
Total
Net Capital Costs forecasted 2014
to 2023 (net of grants, subsidies)
73.3 431.1 504.4
Less: Benefit to Existing/Non-Growth
(to be funded by tax levy)
34.4 263.6 298.0
Less: Legislated Deduction (not
recoverable under DC Act 10% - to
be funded by tax levy)
3.3 0 3.3
Less: Prior Growth (DC Previously
Collected and Estimated Revenue
Loss)*
9.5 22.6 32.1
Less: Post 2023 Benefit (eligible to
be recovered from DCs post 2023)
2.7 65.0 67.7
Total Growth Related Costs (Eligible
to be Recovered Under Development
Charges from 2014 to 2023)
$23.4 $79.9 $103.3
*Amount of prior growth includes DC revenue previously collected for the duration of the current
by-law ($21 M) as well as the estimated lost revenues ($11 M) resulting from the three year
phase in of the 2009 DC rates.

Allocation of Growth Related Costs by class:

(in millions) General
Services
Engineered
Services
Total
Residential Share 19.4 48.0 67.4
Industrial Share 2.0 7.7 9.7
Non-Industrial Share
(Commercial/Institutional)
2.0 24.2 26.2
Total Recoverable (2014 to 2023) $23.4 $79.9 $103.3

The above noted amounts have been determined in accordance with the Development Charges
Act and are based on the detailed list of growth related capital projects that are required to
service the anticipated growth in the City of Greater Sudbury over the next 10 years. This
forecasted capital program must be approved by Council with the adoption of the 2014
Background Study.
In reality, the total recoverable amount from 2014 to 2023 will not be collected by the City due to
discretionary exemptions such as designated exempt areas, as well as statutory exemptions
such as school boards and City properties as well as the first 50% of expansions for industrial
buildings. Also, actual recoveries will vary dependent on the actual growth to be realized over
the next 10 years.
The breakdown by class was calculated as follows:
Residential based on the forecasted development by number of units by type (single
family/semi detached dwelling and multiples)
Non-Residential based on the forecasted development by square footage (over 10
year period) by type
o industrial
o non-industrial [i.e. commercial and institutional]

5.0 Exemptions
5.1 The Development Charges Act Exemptions
The Development Charges Act, along with regulation O.Reg. 82/98 and other provincial
legislation provides the following exemptions:
Limits the amount of capital costs to be included in calculating development charges by
excluding certain services and by restricting others to only 90% recovery of the capital
cost.
Imposes a limit to ensure that capital projects do not exceed historic service levels.
Legislates certain exemptions from development charges
o The first 50% of an industrial building expansion is exempt from development
charges.
o Enlargement of an existing dwelling unit.
o The intensification of residential use buildings by the addition of one (or in some
instances two) additional dwelling units within the existing building unit.
o Any land that is owned by or used for the purposes of
i) a board of education
ii) any municipality or local board thereof
iii) a consent under Section 53 of the Planning Act where no new building lot
is created
5.2 CGSs 2009 Exemptions
The City of Greater Sudburys By-Law 2009-200F currently provides the following additional
exemptions:
The Town Centre areas of Capreol, Chelmsford, Dowling, Garson and Walden, as
designated in the Citys Official Plan, along with mixed use commercial areas in Val
Caron and Hanmer and the downtown area of Sudbury.
Temporary buildings, if less than 8 months
The City may by by-law provide grants or interest-free loans to offset development
charges pursuant to this by-law to affordable or non-profit housing developments as it
sees fit.
5.3 Comparisons of Exemptions in Municipal Development Charges
See Appendix E for a summary of various exemptions implemented by other municipalities.
6.0 Development Charges By-Law Policy Decisions:
The following are options for Council consideration for the amended by-law. These options
have been developed based on feedback from City Council during the past five years.
6.1 Exemption for Business Improvement Areas
As mentioned above, the existing by-law provides development charge exemptions for certain
areas of the City in order to encourage intensification with these areas. The existing areas
remain unchanged in the draft by-law, with the exception of downtown Sudbury, where the
exemption area has been modified to reflect recent amendments to the Downtown Sudbury
Community Improvement Plan.
Additionally, a resolution was passed by Council on January 24, 2012 THAT Council of the City
of Greater Sudbury approve Option 3, which states that staff be directed to review the Citys
policy on development charge exemptions when the 2014 Development Charges Background
Study and By-Law are prepared.
In accordance with the Growth Plan for Northern Ontario, staff will be undertaking a nodes and
corridors study to review increasing densities and development opportunities along major street
corridors and strategic areas of the City. The results of this study in conjunction with the
findings of the Water and Waste Water Master Plan, which is currently underway, will provide
the necessary information to strategically identify the areas where DC exemptions should be
used to encourage intensification. The results of these studies could then be used in the next
update of the Development Charges by-law in five years time. As a result, it is for Councils
consideration that the current exempted areas remain in the draft by-law, with the exception of
the downtown Sudbury boundary mentioned above and the addition of the Flour Mill BIA further
discussed below.
Another issue that was examined as part of above Council resolution was whether to include
DC exemptions for areas that have established Business Improvement Areas (BIA) to
encourage redevelopment and intensification in these areas. A Business Improvement Area
allows local business people and commercial property owners and tenants to join together and
with the support of the municipality, to organize, finance, and carry out physical improvements
and promote economic development in their area. Currently the two existing BIAs in the City
are in downtown Sudbury and the Flour Mill. Since there is already a DC exemption in place for
downtown Sudbury, it is for Councils consideration that an exemption be included for the Flour
Mill BIA as part of the new DC by-law and also that the draft by-law provide for exemptions in
any new BIA created during the next five years.

Recommendation: Consider amending the Designated Exempt Area to provide an
exemption for the Flour Mill BIA (Business Improvement Area) and any designated BIAs
created in the next five year period.

6.2 Colleges and Universities
Colleges have been held by the courts to be exempt from the application of DCs due to
legislation which identifies colleges as crown agencies. Colleges established under the Ontario
Colleges of Applied Arts and Technology Act, 2002 will qualify. It is proposed that for ease of
reference, this exemption be referenced in the bylaw.
In addition, the City has entered into an agreement with Laurentian University to provide a 100%
exemption of DCs for buildings related to academic or research purposes and 50% exemption
of DCs for buildings used for purposes other than the universitys academic or research
purposes.
Recommendation: Proposed by-law has been updated for these exemptions.

6.3 Affordable Housing
The 2009 by-law allowed Council to consider, upon request of an affordable or non-profit
housing development, the provision of a grant or interest free loan to offset the amount of the
development charges payable. Upon review of other municipalities (as outlined in Appendix E)
as well as further to the Housing and Homelessness Plan, Council may wish to consider
amending the by-law to include an exemption for affordable housing based on specific criteria
and a housing service agreement with the City.
Recommendation: Consider providing an exemption for affordable housing when development
meets criteria identified below.
To be eligible for an exemption or reduction of Development Charges, an affordable rental
housing project must target low income households and provide affordable rent levels. The
initial and on-going annual affordable project rents along with the occupant maximum income by
unit type are to be set and/or approved by Housing Services.

To be considered affordable, the initial rent setting must be consistent with any one of the
following:
1. The definition of affordable rental as provided in the Provincial Policy Statement OR
2. 80% of the Average Market Rent as determined by CMHC in its latest survey of the local
market OR
3. Rent levels set in accordance with a Housing Services recognized affordable housing
program (i.e. Canada/Ontario Affordable Housing Program)

In addition, the property owner must have entered into a Housing Agreement with the City of
Greater Sudbury, which is registered on title and serves to ensure that the affordability terms
established by the City remain in effect. The principal intent of the Housing agreement is to
indicate that in exchange for the Development Charge exemption, the City will specify rental
rates and occupant income by unit type in perpetuity. It also establishes penalties & remedies
should the terms of the Agreement be breached. The Housing Agreement must be executed by
the applicant at the time of the property rezoning (where applicable) or prior to the project
commencing construction (i.e. before building permit is issued).
6.4 Period for Redevelopment Credits on Development Charges
In the 2009 by-law, redevelopment credits on development charges is a reduction available to
landowners that redevelop land for which a building permit has been issued for the land within
two years from the date of issuance of the demolition permit. Staff researched other municipal
redevelopment policies, and many allow a time limit of 4 to 5 years. In addition, if the original
building is demolished within five years after redevelopment, then the owner can apply for a
refund for a reduction of development charges previously paid on the redevelopment.

Recommendation: Consider extension of the time limit from two years to five years. This
change will encourage redevelopment of existing land and is comparable to time limits of other
municipalities in Ontario. In addition, if demolition occurs after the redevelopment, then it will
result in a refund as opposed to a credit.

6.5 Annual Indexing Date and Effective Date
Under the existing by-law, the annual indexing date is January 1
st
of each year. Staff
recommends the annual indexing rate to be July 1
st
of each year. The index used is the non-
residential building cost index. The proposed rates would be effective July 10, 2014 after the
current by-law expires on July 9, 2014.
Recommendation: The proposed DC rates would be effective July 10, 2014 and annual
indexing of rates would be July 1
st
of each following year for the duration of the by-law.

6.6 Payment of DCs
The Citys existing by-law requires payment of the Development Charge before the issuance of
the building permit. Based on review of other cities and discussions with Hemson Consulting,
some fast growing municipalities require a portion of development charges to be paid at the time
of site plan or subdivision agreements approval or before the building permit is issued. Section
27 of the DC Act allows City Council to enter into an agreement for payment options, including
interest.
Recommendation: Continue to collect Development charges before the issuance of the
building permit. Should an unusual circumstance arise where it would be appropriate to enter
into a payment arrangement, a separate report would be prepared for Council approval, in
accordance with Section 27 of the DCA.
7.0 BMA Comparisons:
The 2013 BMA Study compares financial information amongst several municipalities in Ontario
including comparisons on Development Charges. The BMA study shows that there is a
significant range in terms of development charges across the survey of 98 municipalities. There
are ten municipalities that do not collect development charges. In addition, only fifteen
municipalities have no industrial development charges and only three have no commercial
development charges. The table below shows the average, minimum and maximum with
comparison to Greater Sudbury rates for 2013. Please note that a number of municipalities are
undergoing DC by-law updates in 2014.
Single
Detached
Dwellings
per unit
Multiples
Dwellings
per unit
Non Residential
(Commercial)
per sq ft
Non
Residential
(Industrial)
per sq ft
Study Average $25,106 $20,234 $14.96 $9.65
Minimum $4,183 $3,347 $0.53 $0.43
Maximum $64,798 $59,620 $47.57 $24.95
Greater Sudbury
(2013 rates)
$14,829 $9,285 $10.11 $4.34

Overall, the City is significantly below the average development charges rates collected by
municipalities in Ontario during 2013. Specifically, the City of Greater Sudbury is 41% below
the average for development charges throughout Ontario and listed as 36
th
lowest of 98
municipalities surveyed based on the single detached dwellings per unit rate.
Appendix F illustrates that the City is second lowest of municipalities in Ontario with a
population over 100,000 based on the single detached dwellings per unit rate. The Citys 2013
rate of $14,829 is significantly lower than the average for municipalities over 100,000 at $34,425
and the overall BMA Study average at $25,106.
The proposed DC rate as calculated by Hemson is $17,163 for a single family dwelling. Based
on the proposed DC rates, the City would continue to be below the average according to the
BMA study.
8.0 Development Charges Act, 1997 Provincial Review Consultation
Further to the update at Council in the November 2013 report, the Ministry of Municipal Affairs
and Housing (Ministry) is continuing its review of DC Act as no announcements have been
made. Generally, municipal feedback to the Province centered around three key areas of
concern. In summary, they are:
1) Eliminate Ineligible services, so that all services are eligible for development
charges.
2) Remove the step in Determination of development charges that requires
municipalities to reduce their capital costs by 10%.
3) Replace the 10 year average historic service level limits with a service level that is
forward looking, especially for transit.
A future report to Council will be presented to explain changes to the DCA, if and when
announced by the Province.
9.0 Housekeeping Change to Proposed By-law
The proposed by-law also includes a number of housekeeping changes which more
appropriately align the Citys DC By-law to the Development Charges Act and other municipal
by-laws.
For example:
Definitions have been amended such as gross floor area, total floor area, industrial, local
board, building or structure.
Amendments to rules with respect to the redevelopment of land
Clarified the refund process
Outlined the complaints process in accordance with the Development Charges Act
10.0 Conclusion and Next Steps:
The City has prepared a draft background study and draft DC by-law for City Councils
consideration. Staff has prepared a communication plan and an extensive community
consultation process to education stakeholders and request feedback about the proposed
changes. The following is the schedule:
- Public Open House April 24
th
, 2014; Tom Davies Square Foyer (4 pm to 7 pm)
- Development Liaison Advisory Committee (DLAC) meeting - May 2
nd
, 2014
- Statutory Public Meeting Finance & Administration Committee meeting - May 6
th
, 2014 at 4pm
Interested parties can also submit feedback via an on-line comment form. City staff will
summarize all feedback and prepare necessary reports to seek City Councils direction on any
amendments to finalize the Background Study and by-law at the June 10
th
or 24
th
City Council
Meeting.

DEVELOPMENT CHARGES
BACKGROUND STUDY
City of Greater Sudbury
DRAFT EXECUTIVE REPORT
HEMSON C o n s u l t i n g L t d.
April 8, 2014
Hemson - Development Charges Background Study - Draft Executive Report (includes Appendix A, B, C) 1/49
HEMSON
EXECUTIVE SUMMARY
Hemson Consulting Ltd. was retained by the City of Greater Sudbury to complete a
Development Charges Background Study. This Background Study provides the basis
to update the Citys development charges to accurately reflect the infrastructure
needs and costs of servicing development in Greater Sudbury.
A. BACKGROUND AND INTRODUCTION
The Development Charges Act, 1997 (DCA) and its associated regulation (O. Reg.
82/98), allow municipalities in Ontario to recover for growth-related capital costs
from new development.

This study calculates new development charges for the City of Greater Sudbury in
compliance with the provisions of the DCA.

The City of Greater Sudburys existing development charges by-law, By-law
Number 2009-200F, expires on July 09, 2014, however Council may choose to
pass a new development charges by-law before the legislated five-year expiry date.

The City needs to continue implementing development charges to fund capital
projects related to growth throughout Greater Sudbury so that development
continues to be serviced in a fiscally responsible manner. The calculated changes
to the development charges rates are required in order to reflect the revised costs
associated with the infrastructure requirements.

This report identifies the growth-related net capital costs which are attributable
to development that is forecast to occur in the City. These costs are apportioned
to types of development (residential, non-residential) in a manner that reflects
the increase in the need for each service attributable to each type of
development. This report therefore presents development charges for each type of
development.

The DCA and O. Reg. 82/98 require that a development charges background
study be prepared in which development charges are determined with reference
to:

A forecast of the amount, type and location of residential and non-residential
development anticipated in the City;

A review of future capital projects, including an analysis of gross expenditures,
funding sources, and net expenditures incurred or to be incurred by the City
to provide for the expected development, including the determination of the
growth and non-growth-related components of the capital projects; and

D
R
A
F
T
1
HEMSON
An examination of the long-term capital and operating costs for the capital
infrastructure required for each service to which the development charges by-
law would relate.

B. GROWTH FORECAST
A growth forecast has been prepared and is the basis for the Development
Charges Background Study.
The City is forecasted to add approximately 4,700 new households in the 10-year
planning period from 2014 to 2023. This translates into a population of roughly of
11,500 in the newly constructed units.
The non-residential sector forecast is nearly 4.72 million square feet of new non-
residential building space from 2014 to 2023. This additional floor space can be
accommodated by an employment base of roughly 81,950. Overall employment is
forecasted to increase by 3,300 over the 10-year period.
The following is a summary of the projected growth for the City:

Growth Forecast 2013
2014-2023

Growth Total at 2023

Residential

Total Households 68,643 4,699 73,342

Population
Census 167,366 5,514 172,881
Population In New Dwellings 11,513

Non-Residential

Employment 78,698 3,255 81,953

Employment in New Space 7,900

Non-Residential Building Space (sq. ft) 4,715,370

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C. ELIGIBLE SERVICES ARE INCLUDED IN THE ANALYSIS
The following City services have been included in the development charges
analysis:

General Government
Library Services
Fire Services
Police Services
Public Safety
Parks and Recreation
Cemetery Services
Ambulance Service
Public Works
Emergency Management
Transit
Roads and Related
Water Services
Wastewater Services
Drains
D. THE CITY HAS AN EXTENSIVE GROWTH-RELATED CAPITAL PROGRAM FOR
THE PROVISION OF ELIGIBLE SERVICES
General Services 2014 2023
City staff has developed a growth-related capital program setting out projects that
are required to service the anticipated development. The growth-related capital
programs are based on a ten-year planning period of 2014 to 2023.

The gross cost of the Citys growth-related capital program for general services
amounts to $93.09 million and provides for a wide range of infrastructure
expansions. Of the $93.09 million, approximately $23.37 million has been
identified as eligible for recovery through development charges over the 2014
2023 planning period.

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The following is a summary of the growth-related capital program for the general
services:

The Development Charges Act, 1997 requires that growth-related net capital costs
for soft services be reduced by 10 per cent in calculating the applicable
development charge for these services. The 10 per cent share of growth-related
net capital costs not included in the development charge calculations must be
funded from non-development charge sources.

In total, about $3.27 million is identified as the required 10 per cent reduction.

Non-development charge funding for replacement portions of the capital forecast
and for portions of growth-related capital projects that benefit existing
development will total an additional $34.42 million. These portions of capital
costs would have to be funded from property taxes and other non-development
charge revenue sources.

A share of the capital forecast is for portions of projects that relate to growth in
the post-2023 period (for which future development charges could be collected)
and to general service level increases. In total, about $2.70 million falls within
Gross DC Non-DC
Service Cost Recoverable Recoverable
($000) ($000) ($000)

1.0 TOTAL GENERAL GOVERNMENT $2,218.3 $615.2 $1,603.1

2.0 TOTAL LIBRARY SERVICES $13,417.3 $3,107.1 $10,310.2

3.0 TOTAL FIRE SERVICES $5,643.0 $2,313.7 $3,329.3

4.0 TOTAL POLICE SERVICES $1,701.3 $1,223.8 $477.5

5.0 TOTAL PUBLIC SAFETY $12,700.0 $513.7 $12,186.3

6.0 TOTAL PARKS AND RECREATION $25,106.1 $10,204.9 $14,901.2

7.0 TOTAL CEMETERY SERVICES $1,135.9 $33.7 $1,102.2

8.0 TOTAL AMBULANCE SERVICES $2,590.0 $719.4 $1,870.6

9.0 TOTAL PUBLIC WORKS $1,071.0 $0.0 $1,071.0

10.0 TOTAL EMERGENCY PREPAREDNESS $3,371.2 $1,351.2 $2,020.0

11.0 TOTAL TRANSIT $24,135.0 $3,289.7 $20,845.3

TOTAL $93,089.0 $23,372.2 $69,716.8
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this definition, a portion of which may represent a general service level increase
which would require tax rate funding.

Development charges have already been collected from prior growth. These funds
and adjustments for the prior phase-in of development charge rates total $9.54
million.

In total, approximately $19.79 million has been identified as subsidies or grants
that the City will anticipate receiving to fund growth-related projects.

Engineered Services 2014 2023
The growth-related capital programs for engineered services are also recovered on
a ten-year planning period.

The following summarizes the growth-related capital programs for the engineered
services. Approximately $79.92 million of the $642.93 million program is to be
recovered from development charges. The balance of $563.01 million will require
funding from non-development charges sources.

Gross DC Non-DC
Service Cost Recoverable Recoverable
($000) ($000) ($000)

12.0 TOTAL ROADS AND RELATED $385,015.9 $51,337.3 $333,678.6

13.0 TOTAL WATER $67,755.7 $5,884.1 $61,871.6

14.0 TOTAL WASTE WATER $144,830.3 $18,955.7 $125,874.6

15.0 TOTAL DRAINS $45,330.2 $3,744.0 $41,586.1

TOTAL
$642,932.1 $79,921.2 $563,010.9

Non-development charges funding for replacement portions of the capital
forecast and for portions of growth-related projects that benefit existing
development totals $263.65 million.

A share of the capital forecast is for portions of projects that relate to growth in
the post-2023 period (for which future development charges could be collected).
In total, about $65.01 million falls within this definition and could require
interim tax or utility rate funding.

Development charges collected from prior growth and discounts for prior phase-
ins total $22.59 million.
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Grants, subsides and other recoveries of $211.76 million are deducted from the
engineering programs.

D. DEVELOPMENT CHARGES RATES CALCULATED WITH FULL REFERENCE TO
THE DCA
Development charges rates have been established under the parameters and
limitations of the DCA. This study provides the rationale and basis for the
calculated rates.

A City-wide uniform cost approach is used to calculate development charges for
the eligible services. This results in uniform residential and non-residential
charges throughout the City.

The calculated charges are the maximum charges the City may adopt. Lower
charges can be approved; however this will require a reduction in the capital plan
and reduced service levels or financing from other sources, most likely through
property tax increases.

The fully calculated residential charges are recommended to vary by unit type,
reflecting the difference in occupancy patterns expected in various unit types and
the associated differences in demand that would be placed on City services.

The following is a summary of the calculated residential development charges by
unit type:

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Unadjusted
Charge per
Household
Charge By Unit Type
SERVICE Single and Semi
Detached
Apartments and
Multiples

GENERAL GOVERNMENT $79 $94 $55

LIBRARY SERVICES $661 $792 $466

FIRE SERVICES $295 $354 $208

POLICE SERVICES $156 $187 $110

PUBLIC SAFETY $66 $79 $46

PARKS & RECREATION $2,172 $2,602 $1,531

CEMETERY SERVICES $7 $9 $5

AMBULANCE SERVICES $92 $110 $65

PUBLIC WORKS $0 $0 $0

EMERGENCY PREPAREDNESS $173 $207 $122

TRANSIT SERVICES $420 $503 $296

GENERAL SERVICES CHARGE
$4,121
$4,937 $2,904

ROADS AND RELATED $6,555 $7,853 $4,621

WATER $751 $900 $530

WASTEWATER $2,421 $2,900 $1,706

DRAINS $478
$573
$337

ENGINEERED SERVICES CHARGE $10,205 $12,226 $7,194

TOTAL CHARGE
$14,326
$17,163 $10,098
Based on Person per Unit of:
2.47
2.96 1.74

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The calculated non-residential charge is recommended to apply to two property
types, industrial and non-industrial. The following is a summary of the fully
calculated non-industrial and industrial charge:

Unadjusted Non-
Residential
Charge ($/sq.ft)
Non-Industrial
Charge
($/sq.ft)
Industrial
Charge
($/sq.ft) SERVICE

GENERAL GOVERNMENT $0.05 $0.05 $0.05

LIBRARY SERVICES $0.00 $0.00 $0.00

FIRE SERVICES $0.20 $0.20 $0.20

POLICE SERVICES $0.10 $0.10 $0.10

PUBLIC SAFETY $0.04 $0.04 $0.04

PARKS & RECREATION $0.00 $0.00 $0.00

CEMETERY SERVICES $0.00 $0.00 $0.00

AMBULANCE SERVICES $0.06 $0.06 $0.06

PUBLIC WORKS $0.00 $0.00 $0.00

EMERGENCY PREPAREDNESS $0.11 $0.11 $0.11

TRANSIT SERVICES $0.28 $0.28 $0.28

GENERAL SERVICES CHARGE $0.84 $0.84 $0.84

ROADS AND RELATED $4.35 $5.56 $1.48

WATER $0.50 $0.50 $0.50

WASTEWATER $1.61 $1.61 $1.61

DRAINS $0.32 $0.32 $0.32

ENGINEERED SERVICES CHARGE $6.78 $7.99 $3.91

TOTAL CHARGE $7.63 $8.83 $4.75
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The calculated fully serviced single/semi detached unit charge ($17,163/unit) and
apartment/multiple charge ($10,098/unit) are higher than the Citys current
charges of $14,785 and $9,258 respectively.

The calculated fully serviced industrial development charge of $4.75/sq. ft. is
$0.42 higher than the Citys current charge of $4.33/sq. ft.

Increases in development charges are due to improved service levels, a more
extensive capital program and general cost escalation.

The calculated fully serviced non-industrial (commercial, institutional and office)
charge of $8.83/sq. ft. is slightly lower than the Citys present charge of $10.08/sq.
ft. This decrease is due to a reduction in the roads capital program compared to
the 2009 Development Charges Study.

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APPENDIX A
GROWTH FORECAST
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APPENDIX A
GROWTH FORECAST
This appendix provides the details of the growth forecast that was used in the preparation of the
2014 Development Charges Background Study for the City of Greater Sudbury. The results of
the forecast are provided in a series of tables.

Forecasts of population, households and employment were prepared by Hemson Consulting Ltd.
in conjunction with the Community and Strategic Planning Section of the City of Greater
Sudbury. The assumptions used in the forecasts were based upon the historical building permit
data provided by City staff and also 2011 Census data.

The planning period for general services is 2014 to 2023, or a ten-year period, as limited by the
Development Charges Act. The engineered services are also recovered under a ten-year planning
period, however the recovery period for engineered services stretch to 2031 or 2041 for certain
projects. The post-period benefit shares are described in detail in Appendix B for the general
services and Appendix C for engineered services.

A. RESIDENTIAL FORECAST

The Development Charges Background Study forecasts are based on the Scenario 1 growth
forecast that was prepared by Hemson and presented to City Council in May 2013. The forecast
has been updated to account for recent Census and National Household survey releases.
An estimated 4,700 additional household are forecasted to be added to the City in the ten-year
planning period of 2014 to 2023 (see Table 4). It is anticipated of the 4,700 new households to
be added to the City in the ten-year planning period, 2,809 will be of the single or semi-
detached housing unit form, 302 will be rows and 1,588 will be apartment units (see Table 5).
The forecast population in new housing units is based on the forecast housing unit allocations
and the historic household size by period of construction by unit type. This is a 2011 Census
special run received from Statistics Canada. The persons per unit data is used to determined the
population in new single and semi-detached and apartment units. The forecast population in
new housing units for the ten-year planning period is 11,513 persons (see Table 6). The Citys
Census population is expected to grow from 161,311 in 2013 to 166,624 in 2023.

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B. NON-RESIDENTIAL FORECAST

The non-residential space forecast was developed in reference to the five year historical building
permit data by major land use sector. The forecast considers three non-residential categories:
employment land (industrial), population related (commercial and institutional) and major
office. Rural employment growth is not anticipated to generate any additional floor space.

Over the ten-year forecast period an additional 15,570 square feet of major office, 3.31 million
square feet of population-related employment space, and 1.39 million square feet of employment
land is projected to be built. In total 4.72 million square feet of non-residential floor space is
forecast to be added between 2014 and 2023 (Table 8). This additional floor space will
accommodate approximately 7,900 additional employees in new space. Overall employment
across the City is forecasted to increase by 3,255 over the ten-year period.

C. RESULTS OF THE CITY OF GREATER SUDBURY GROWTH FORECAST

Based upon the methodology, inputs and assumptions discussed above, forecasts of population,
housing, employment and non-residential floor space were prepared for the City of Greater
Sudbury. The forecast results are presented in a series of tables and are summarized in the
following:

Table 1: Displays the historic population, households and employment from 2001 to 2013.

Table 2: Shows the historic population and households by period of construction based on a
special Census data tabulation by Statistics Canada.

Tables 3 and 4: Provides the overall population, household, and employment forecast results
annually from 2014 to 2041.

Table 5: Illustrates the growth in households by unit type annually from 2014 to 2041.

Table 6: Displays the forecast population in new units that is derived from the household
growth.

Tables 7 and 8: Show the annual employment forecast by employment type annually from 2014
to 2041.

Table 9: Illustrates the projected increase in non-residential floor space annually 2014 to 2023.

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8
HEMSON
APPENDIX C
ENGINEERING INFRASTRUCTURE
TECHNICAL APPENDIX
D
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29
HEMSON
APPENDIX C.1
ROADS AND RELATED
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3
8
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APPENDIX C.2
WATER
D
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39
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4
1
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APPENDIX C.3
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D
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Appendix D - Breakdown of DC Rates and Comparison by Service Area
Proposed * Current ** Change ($) Change (%) Proposed * Current ** Change ($) Change (%)
General Government 94 49 45 92% 55 31 24 77%
Library Services 792 427 365 85% 466 267 199 75%
Fire Services 354 366 (12) -3% 208 229 (21) -9%
Police Services 187 392 (205) -52% 110 245 (135) -55%
Public Safety 79 - 79 100% 46 - 46 100%
Parks and Recreation 2,602 2,531 71 3% 1,531 1,585 (54) -3%
Cemetery Services 9 - 9 100% 5 - 5 100%
Ambulance Service 110 65 45 69% 65 41 24 59%
Public Works - 273 (273) -100% - 171 (171) -100%
Emergency Preparedness 207 164 43 26% 122 102 20 20%
Transit 503 314 189 60% 296 196 100 51%
Subtotal General Services 4,937 4,581 356 8% 2,904 2,867 37 1%
Roads and Related 7,853 8,971 (1,118) -12% 4,621 5,619 (998) -18%
Water Services 900 588 312 53% 530 368 162 44%
Wastewater Services 2,900 438 2,462 562% 1,706 274 1,432 523%
Drains/Stormwater 573 207 366 177% 337 130 207 159%
Subtotal Engineered Services 12,226 10,204 2,022 20% 7,194 6,391 803 13%
Total - All Service Areas 17,163 $ 14,785 $ 2,378 $ 16% 10,098 $ 9,258 $ 840 $ 9%
Excluding Water/Wastewater
Services 13,363 $ 13,759 $ (396) $ -3% 7,862 $ 8,616 $ (754) $ -9%
Proposed * Current ** Change ($) Change (%) Proposed * Current ** Change ($) Change (%)
General Government 0.05 0.03 0.02 67% 0.05 0.03 0.02 67%
Library Services - - - 0% - - - 0%
Fire Services 0.20 0.26 (0.06) -23% 0.20 0.26 (0.06) -23%
Police Services 0.10 0.29 (0.19) -66% 0.10 0.29 (0.19) -66%
Public Safety 0.04 - 0.04 100% 0.04 - 0.04 100%
Parks and Recreation - - - 0% - - - 0%
Cemetery Services - - - 0% - - - 0%
Ambulance Service 0.06 0.04 0.02 50% 0.06 0.04 0.02 50%
Public Works - 0.19 (0.19) -100% - 0.19 (0.19) -100%
Emergency Preparedness 0.11 0.12 (0.01) -8% 0.11 0.12 (0.01) -8%
Transit 0.28 0.22 0.06 27% 0.28 0.22 0.06 27%
Subtotal General Services 0.84 1.15 (0.31) -27% 0.84 1.15 (0.31) -27%
Roads and Related 1.48 2.29 (0.81) -35% 5.56 8.04 (2.48) -31%
Water Services 0.50 0.42 0.08 19% 0.50 0.42 0.08 19%
Wastewater Services 1.61 0.32 1.29 403% 1.61 0.32 1.29 403%
Drains/Stormwater 0.32 0.15 0.17 113% 0.32 0.15 0.17 113%
Subtotal Engineered Services 3.91 3.18 0.73 23% 7.99 8.93 (0.94) -11%
Total - All Service Areas 4.75 $ 4.33 $ 0.42 $ 10% 8.83 $ 10.08 $ (1.25) $ -12%
Excluding Water/Wastewater
Services 2.64 $ 3.59 $ (0.95) $ -26% 6.72 $ 9.34 $ (2.62) $ -28%
** Current rates as per City by-law 2009-200F effective from January 1, 2014 to July 9, 2014.
* Proposed rates as per Development Charges Background Study - Draft Executive Report dated April 8, 2014 prepared by Hemson Consulting.
Residential (per unit)
Single Family/Semi Multiples
Non-Residential (per square foot)
Industrial Non-Industrial (Commerical/Institutional)
Appendix D - Breakdown of DC Rates and Comparison by Service Area 1/1
Appendix E - Development Charge Exemption Comparison Summary 1/2
Appendix E - Development Charge Exemption Comparison Summary 2/2
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Appendix F - BMA Comparison - DCs for Municipalities with population greater than 100,000 1/1

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