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City to put an end to waiving development fees

City to change the way it deals with non-profit housing initiatives

City council later this month will establish a budget for dealing with non-profit housing initiatives such as Habitat for Humanity.

The change comes after city staff recommended council stop waiving development fees for such projects.

Instead, staff suggests the city pay for the charges itself.

Al Kenning, acting city general manager of corporate services, said that council’s current practice of simply waiving the fees presents a problem.

“Exempting non-profit housing from these charges does not mean the related costs of processing and servicing the project go away,” Kenning wrote in a report to council.

“In virtually every case, the charges are meant to offset, or partially offset, the costs imposed by a new project.

“If the project is exempt, then these costs are not recovered, thereby transferring them to the general taxpayer or to other development projects.”

Kenning said there’s also the issue of proper infrastructure being overlooked.

“Waiving, or varying, works and services like sidewalks, landscaping and related works can be very detrimental to the community if the works are not built,” Kenning said.

“These works had been determined by council to be important, or even essential, when the works and services standards were adopted.”

Kenning’s report was facilitated by a motion passed by council on July 8 of last year, asking for a staff report on how best to respond to an increasing number of requests for financial assistance for non-profit housing projects.

In the last five years, council has agreed to waive, vary, forgive or pay city-imposed development related costs for four groups including Habitat for Humanity and the Women’s Transition Shelter.

A fifth request from the Campbell River Head Injury Society, worth $485,000, is currently under consideration by council.

Kenning said that city staff believe the best way, moving forward, for dealing with such requests is to establish a policy that requires the city to pay the fees, charges and works and services if the project is determined by council to be in the public interest.

“Under such a policy, waiving the fees and works would not be an option,” Kenning said. “This also ensures that council and the community understand the full cost of the decision to provide support.”

Kenning suggested the fees be paid using council’s contingency account.

“Given the irregular and uncertain nature of the requests, use of council contingency seems logical,” Kenning said. “The council contingency budget may have to be increased in future to accommodate these costs. Staff believe such a process provides a much higher level of financial accountability and control over the option of waiving fees by amending the necessary bylaws.”

It would also allow council to be more selective in which projects it deems worthy of support; council could elect to pay all or only a portion of the development fees, said Kenning, depending on the perceived social value of the project.

“Staff also believe that this process sends the appropriate message to the development community and to all citizens,” Kenning added. “This message is that these charges represent important cost recovery or fund important services and it is not appropriate for them to be waived since they have to be paid or funded by someone.”

Council agreed and in August resolved to fund certain non-profit housing projects from a new council contingency account – the Community Land Development fund.

While council only received Kenning’s report for information purposes at its Jan. 26 meeting, council will hammer out a budget for the new account at the end of the month during budget planning.