Development Charges By-law and Background Study

Development Charges

Development charges are fees collected from developers when they are applying for a building permit. These fees are used to help fund new infrastructure which is needed to support development growth within the community. These funds are used to support the construction of infrastructure related to roads, transit, water and sewer pipes, community amenities (parks and community centres, fire and police stations, etc.).

The establishment and collection of fees is governed by provincial law, namely The Development Charges Act. This Act allows municipal governments (local and regional) and school boards to establish policies that allow them to assign development fees that when collected are used to support the building of appropriate growth-related infrastructure within their respective areas of responsibility. These fees are collected by the local municipality at the time a building permit is issued.

Development Charge Study (December 2020)

Under the Development Charges Act, municipalities are required to carry out a Development Charge (DC) Study prior to implementing fees. A DC Study looks at future population growth within a community along with the infrastructure required to support this growth. This information is used to calculate development charge fees that are applied on a per unit residential growth or per square metre non-residential growth when a building permit is obtained. The Town of Grimsby has engaged the services of Watson and Associates Economists Ltd. to prepare a new DC study and update the Town’s existing DC By-law. The following is an outline of the project timelines and key dates:

2019 - 2020 - Retain consultant, assemble background information and carry out study.
December 21, 2020 - Release of the DC Study and draft DC By-law.
January 8, 2021 - Notice of Public Meeting.
February 1, 2021 - Public Meeting of Council.
March 22, 2021 - Passage of DC By-law and DC Amending By-law.
April 8, 2021 - Notice of Passage of Development Charges By-law.

Development Charges Study Addendum (April 2021)

Subsequent to the passage of the DC By-law, it was discovered that the rates included in Schedule B to the By-law, related to “Multiples”, “Apartments - 2 Bedrooms +”, and “Apartments - Bachelor and 1 Bedroom”, were identified incorrectly for "Services Related to a Highway" and "Public Works". As such, an addendum was issued to correct the schedule to ensure they reflected the rates which were included in Chapter 6 of the December 21, 2020 DC Study. The following is an outline of anticipated timelines necessary to complete the addendum process:

April 14, 2021 - Release of DC Study Addendum #1.
May 31, 2021 (no later than) - Notice of Public Meeting.
June 21, 2021 - Public Meeting of Council and date intended to pass amended DC By-law.
July 11, 2021 (no later than) - Notice of Passage of Development Charges By-law.

In order to ensure the Town is not overcharging DC fees, an interim fee schedule has been created. This fee structure will be applicable in the time period between Mar 22, 2021 and June 21, 2021, namely the time between the initial 2021 DC By-law being approved and the anticipated date the amending DC By-law (to reflect Addendum #1) will be approved.

Development Charges Background Study Update (January 2022)

Subsequent to the passage of the DC By-law, it was determined that two road reconstruction projects identified in Section 5.3.1., Services Related to a Highway, of the December 21, 2020 DC Study report involved works that are eligible for developer direct contribution, but had not been identified as such. Specifically, project #15 - North Service Road - 5th Wheel (Winston Rd.) to 500m East and project #17 - Old Winston Road - North Service Road to 100m East, meet the condition 1) b. of the Local Servicing Policy for Services Related to a Highway; meaning 50% of the growth related costs are subject to developer direct responsibility with the remaining 50% being funded by Development Charges. In addition, project #16, relating to the estimated debt financing costs associated with project #15 are being revised based on the DC component of the project. As such, an update was issued to amend the schedule and recalculate the Development Charge fees that are impacted by this change.

The following is an outline of the anticipated timelines necessary to complete the update process:

January 20, 2022 - Release of DC Background Study Update
February 13, 2022 (no later than) - Notice of Public Meeting
March 7, 2022 - Public Meeting of Council
March 21, 2022 - Council Meeting - Intending to Pass DC Background Study Update
April 10, 2022 (no later than) - Notice of Passage of Development Charges By-law

The existing fee schedule will be in effect until March 21, 2022; the anticipated date the amending DC By-law (to reflect DC Background Study Update) will be approved.