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Showdown coming to regional council Wednesday 3 · OAKVILLE BEAVER Friday, July 10, 2009 Continued from page 1 But as debate on the contentious agenda item dragged on for hours at council's finance committee, the tedium took its toll on the wellbehaved observers. The crowded chambers thinned out as workers snuck out for breaks or simply left. At 4:30 p.m., the workers filed back on to the buses and headed home, two hours before the finance committee eventually voted. The result was that the staff recommendation lost on a 4-4 tie. The report outlining the extra cost to developers will now go to regional council for a vote next Wednesday morning. At the heart of the battle between residential developers and Halton Region is the $8,000 surcharge regional staff say residential developers must pay to cover the cost of necessary roads, water and wastewater infrastructure to be built over the next decade or so. The fee is on top of the $29,000 in development charges homebuilders in north Oakville and Milton already pay the Region for such `hard services'. Peter Gilgan, owner of Mattamy, along with 15 other major homebuilders in Halton, has criticized the charge as an unnecessary and unfair tax on new homebuyers that threatens the building industry and its employees. Regional chair Gary Carr is the de facto spokesperson for a group of councillors that argue the charges are for growth-related infrastructure and should therefore be picked up by developers, not taxpayers living in the region. Both arguments, expressed in e-mail campaigns launched by both sides, oversimplify greatly a complex issue. The $8,000 can be broken down into three essential components: · a $1,061 per unit cash flow charge -- essentially an interest-free loan given to the Region from the developers -- to cover the cost of improvements to water and wastewater infrastructure necessary to cover residential growth in Oakville north of Upper Middle Road and in Milton. This is the least contentious component of the surcharge as the developers understand the need for improvements to the water and sewer system, though there is concern about the timing of when this would be paid to the Region. The Region wants the cash up front before developers have even got planning approvals from the local municipalities, money from the bank for their projects, or can start selling their houses to make money. Though interest rates are low, credit is not easy to come by, the developers say, especially for condominium developers that have to sell close to all the units in a project before the bank agrees to provide financing. The Region doesn't wish to debt finance residential-related infrastructure, for fear of increasing its debt ratio and jeopardizing its own AAA credit rating. It does undertake Sign up on Line such debt financing to build roads and sewers for employment lands, but sees it as investment. · a $2,238 per unit roads cash flow charge. This item is more controversial to developers as it includes a number of accelerated roads projects such as immediate expansions to Tremaine Road, Dundas Street, Neyagawaya Boulevard and Regional Road 25. The developers argued some of these projects could possibly be postponed a couple of years in the current economy. The Region wants the roads in place before the new subdivisions break ground. · a $4,590 `voluntary' contribution to be paid by residential developers in north Oakville and Milton to cover the cost of mandatory and discretionary exemptions given to non-residential developers. Mandatory exemptions stem from the Province's Development Charges Act, which specifies the Region can't collect growth-related costs for roads and water and sewer pipes going to new schools, municipal buildings, or expansions to existing industrial operations. Regional council approved discretionary exemptions last May when it put in place its current development charges bylaw. That bylaw gave development charge exemptions to farm operations, places of worship, seasonal structures, conservation authorities and a break on the cost of roads to industrial developers. Mattamy's lawyer, Lyn Townsend, argued to the committee it's unfair for residential developers only in north Oakville and Milton to pick up these costs. Regional staff said they could spread the cost to developers across Halton, but there would be no way to make them pay it. In the case of the developers in north Oakville and Milton, the Region has a negotiating hammer -- pay the contribution or it won't extend sewer pipes for new homes. The third option, for the cost to be spread around to all taxpayers, isn't being considered as council wants any growth-related cost paid by developers. Although council had in November endorsed the basics of this infrastructure financing plan, and its concomitant charge to developers, it is being debated again as the expected takeup of requested sewer and water pipe allocations has dropped considerably. Last year, the Region expected developers to request 9,500 allocations to build homes over the next three years. By April, developers had expressed interest in only 7,500 of them. However, when it recently came time to submit a letter of commitment, meaning developers had cash in hand and were ready to build, that number had dwindled to 1,600 -- indicating either a serious financing problem facing developers or a united front from the 16 major homebuilders to not take part in the Region's allocation program as a way to force council to review the extra charges. Council will be forced to decide Wednesday whether it's a bluff or a legitimate economic problem facing the construction industry. BUY LOCALLY SERVICE LOCALLY SUPPORT YOUR COMMUNITY Phone: (905) 825-8088 www.volvoofoakville.com SERVICE DEPARTMENT OPEN SATURDAYS HEARING AID SPECIAL (Clients portion) *Some Conditions Apply * From Up to 3 Year Service Warranty 60 DAY GUARANTEE: If after 60 days we have not provided you with the best hearing possible, we will give you your money back... We are an authorized clinic for DVA, WSIB, and Green Shield clients Call 905-827-7333 For a FREE Hearing Test. 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