Report to: General Committee Finance & Administrative Date of Meeting: June 11, 2007

SUBJECT: Development Charges Indexing July 1, 2007

PREPARED BY: Jennifer Nelson, extension 2640

RECOMMENDATION:

THAT the report titled “Development Charges Indexing July 1, 2007” be received;

AND THAT Council approve an increase in development charges of 2.8%, effective July 1, 2007.

1. Purpose 2. Background 3. Discussion 4. Financial 5. Environmental

6. Accessibility 7. Engage ^21st 8. Affected Units 9. Attachment(s)

PURPOSE:

The purpose of this report is to recommend the indexing of development charges, effective July 1, 2007, in accordance with the Statistics Canada Quarterly, Construction Price Statistic for non-residential buildings in Toronto.

BACKGROUND:

Section 15 of the Town’s Development Charge by-laws, enacted August 31, 2004, states that “the development charges referred to in Schedule “B” shall be adjusted semi-annually without amendment to this by-law, commencing on the first day of January and the first day of July, of each year commencing January 1, 2005, in accordance with the most recent change in the index (prescribed under the Development Charges Act) Statistics Canada Quarterly, Construction Price Statistics (Catalogue No. 62-007)”.

In accordance with the by-law it is recommended that the development charge be indexed 2.8%. This represents the increase in the Statistics Canada Quarterly, Construction Price Statistic for non-residential buildings in Toronto for the fourth quarter of 2006 and the first quarter of 2007. Below is a history of the indexes approved by Council since the by-laws were enacted.

The Town continues to experience higher than expected costs for hard services (roads, bridges, watermains, sanitary sewers etc.). An updated Development Charge Background Study is currently being prepared to reflect these increased costs and to include new growth related projects not previously included in the development charge. A preliminary review of the hard services currently included in the Background Study (not including new growth related projects) indicated cost increases of approximately 35%, while the semi-annual indexing has only allowed the charge to be increased by approximately 23%. Staff will be reporting the draft results of the Background Study to Council in the fall of 2007.

FINANCIAL CONSIDERATIONS

The Construction Price Index includes costs associated with the construction of industrial, commercial and institutional buildings which more closely aligns with the costs incurred by the Town of Markham for these services. Indexing the Town’s Development Charges on a semi-annual basis will partially mitigate the impact of inflationary increases on future growth-related costs.

RECOMMENDED

BY: ________________________ ________________________

Barb Cribbett, Treasurer Andy Taylor, Commissioner

Corporate Services

ATTACHMENTS:

Exhibit A – Town of Markham Recommended Development Charges for July 1, 2007.