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3 · OAKVILLE BEAVER Friday, August 28, 2009 Former judge hired by builder questions legality of regional fee Continued from page 1 Development Charges Act, not the Municipal Act, is the appropriate and only legislation that should be used by municipalities to determine what developers pay for capital costs related to development. He states regional council should rescind its approval for the charges and work with developers to find some way to collect the money the Region says it needs in accordance with the DC Act. "This co-operative approach to resolution would avoid the protracted and expensive alternative of litigation," Farley writes. "However that would appear to be the inevitable result if council does not wish to adhere to the requirements of the legislation." Bob Gray of the Region's legal department said a response has been sent to Farley, but it does not anticipate a further report going to regional council. Halton Regional Chair Gary Carr said the Region has already had internal and external legal advice stating the financial agreement and its surcharge are valid. Oakville Mayor Rob Burton said he was "unimpressed" by the written submission. Mattamy has signed the Region's previous financial agreements and never challenged their legality, said Burton. Like Halton Region, the Town of Milton Breaking down the development charge By Tim Foran METROLAND WEST MEDIA GROUP also has similar financial agreements pursuant to the Municipal Act, which Mattamy has signed previously. "Just because it's happened in the past doesn't make it proper," Farley said in a telephone interview after the release of his written submission to council and media. Both the Town and Region have maintained sections in the Municipal Act allow them to use such financial agreements to collect money to make up for growth-related capital funds they're not able to recoup from developers under the DC Act. "Development charges are just one piece of the development financing plan," said Mark Meneray, Halton Region's director of legislative and planning services. In his written submission, Farley disagrees the Municipal Act gives municipalities such powers. Milton Mayor Gord Krantz expressed concern that if the issue of the Region's financial agreement ends up in court, it could also threaten the Town's use of the same financing mechanism. "There definitely is a risk in opening up that proverbial can of worms," Krantz said. Two days after Farley's legal opinion was released, the development industry lobbying group BILD (Building Industry and Land Development) Association submitted a proposal to Halton Region suggesting alternatives to the $7,888 financial agreement charge, all within the parameters of the DC Act. Regional council had given the development industry 30 days, which expired recently, to submit such an alternative proposal. Regional staff are scheduled to report back on BILD's proposal to council's administration and finance committee meeting on September 30. Halton regional council last month approved a financial agreement, contained in staff report CS-49-09/PW-20-09/LPS8009, in which residential developers in highgrowth areas of Milton and north Oakville would pay an extra $7,888 for every sewer and water pipe allocation they request. Essentially, one allocation can handle the water and sewerage for one single-detached house or a couple of apartment units. Regional council initially endorsed the program in November, but ratified the amount of $7,888 at the July 15 council meeting. At that time, council gave the development industry 30 days to respond with a written proposal that addresses alternative financing mechanisms and payment timing to that contained in the Region's financial agreement. Prior to the deadline, the lobbying group, the Building Industry and Land Development Association (BILD), presented the Region with such a proposal. The Region has supplied the Beaver with a copy of BILD's proposal. Regional staff are scheduled to report back on BILD's proposal to council's administration and finance committee meeting on September 30. There are essentially three major components of the $7,888 charge, as outlined in the Region's report, for which BILD is suggesting alternatives: · A $2,238 cash flow, or interest-free loan from residential developers in north Oakville and Milton to Halton Region, totalling $20 million, to pay for the acceleration of certain road expansion projects. BILD's proposal suggests that the existing Development Charges (DC) bylaw be amended so that developers across Halton, not just those in Milton and north Oakville, share the costs for these projects. · A $1,061 cash flow, totalling $9.5 million, to pay for water and wastewater projects that are needed immediately. BILD's proposal suggests the Region can debt finance these projects as the money plus interest will be collected from development charges. Regional staff have said previously there's a risk that, if growth slows down a lot, taxpayers may be faced with a charge to cover the costs of carrying that debt. · A $4,589 non-repayable contribution paid by the developers to Halton Region, totalling $138 million over the next 12 years. The Region's treasurer has confirmed about 40 per cent of the contribution is required due to discretionary exemptions, or financial breaks, given by Halton Region to operations such as farms, places of worship, and conservation authorities. These discretionary exemptions also include a discount on roads DCs currently being given to industrial developers, but which is being phased out. BILD's proposal argues the amount of money the Region estimates it will lose due to discretionary exemptions may be overestimated. 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