Report to: General Committee Finance & Administrative Date of Meeting: June 9, 2008

SUBJECT: Development Charges Indexing July 1, 2008

PREPARED BY: Kevin Ross, extension 2126

RECOMMENDATION:

THAT the report titled “Development Charges Indexing July 1, 2008” be received;

AND THAT Council approve an increase in development charges of 3.57%, effective July 1, 2008;

AND THAT Council approve the application of the increase to both the Town Wide Soft services (under the 2004 bylaw) as well as the Area Specific and Town Wide Hard services (under the 2008 bylaws).

BACKGROUND:

2004 Development Charge Bylaws

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 Town Wide Soft development charges be indexed by 3.57%. This represents the increase in the Statistics Canada Quarterly, Construction Price Statistic for non-residential buildings in Toronto for the fourth quarter of 2007 and the first quarter of 2008.

The new Town Wide Soft development charges effective July 1, 2008 will be:

Below is a history of the indexes approved by Council since the by-laws were enacted.

Proposed 2008 Development Charge Bylaws

Section 15 of the Town’s Development Charge by-laws, to be enacted June 10, 2008, states that “The development charges referred to in Schedule "B" shall be adjusted semi-annually without amendment to this by-law, on the first day of January and the first day of July, of each year, commencing July 1, 2008, in accordance with the most recent change in the Statistics Canada Quarterly, Construction Price Statistics (Catalogue No. 62-007)”.

As the 2008 Development Charge Background Study was based on pricing as at January 1, 2008, the recommended indexing is being proposed for the Town Wide Hard and Area Specific Development charges included in the 2008 Study to accurately reflect current costs.

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. The Construction Price Index is not currently keeping pace with the actual costs being incurred on construction projects, as a result, new Development Charge by-laws (Town Wide Hard and Area Specific) are currently in the process of being approved.