The last sentence and first paragraph of the City of Ottawa Treasurer's Statement On Development Charges Reserve Funds for 2012 that will be presented to Planning Committee next week are required reading. Bolding is mine:
Development charges are one-time fees levied by municipalities on new residential and non-residential properties to help pay for a portion of the growth-related capital infrastructure requirements. Development charges are determined and accounted for by type of service. The Development Charges Act requires municipalities to determine the ten-year historic average level of service cap in order to set their rates. This legislative requirement to look backwards restricts the funding available for future capital projects and financially limits a municipality’s ability to expand or change the delivery of certain services in their communities such as Public Transit.
The "service cap" in question is a restriction on how much a city can change its development charges. Today's development charges have to be based on reality, which the province defines as consistent with what a city has been providing over the last ten years. Here's the relevent blurb from the Development Charges Act, Subsection 5 (1), paragraph 4:
The estimate under paragraph 2 must not include an increase that would result in the level of service exceeding the average level of that service provided in the municipality over the 10-year period immediately preceding the preparation of the background study required under section 10. How the level of service and average level of service is determined may be governed by the regulations. The estimate also must not include an increase in the need for service that relates to a time after the 10-year period immediately following the preparation of the background study unless the service is set out in subsection (5).
This is a problem for Ottawa because we have a huge public transit project on the go. Actually it's Ottawa's biggest infrastructure project ever. But due to provincial law we cannot shift development charges away from roads and towards public transit because our new LRT project is in the future, not the past. The incredible increase in "level of service" that LRT will bring cannot be included in any calculations.
So over the next five years as properties are developed within the LRT catchment, Ottawa will not be able to direct as much of those funds to public transit as we would want. This leads to two problems:
The funds are still collected, and council will probably send it to road widenings. This works against the goal of LRT and public transit by subsidizing its competition: more free roads.
- Even after the first LRT line is brought online, it will take 10 years for the "level of service" to fully apply. In 2020 after spending billions, only the first two years of "more service" from LRT can be used when changing the development charge mixture.
All of this is absurd.
It gets better when you read the next subsection of the Development Charges Act and discover the province managed to take care of Toronto's needs when they had a big subway project on to the go. Here's the salient bits:
(2) Paragraph 4 of subsection 5 (1) does not apply in determining the estimate for the increase in the need for the Toronto-York subway extension. 2006, c. 33, Sched. H, s. 2.
(3) For the purposes of section 5, the estimate for the increase in the need for the Toronto-York subway extension shall not exceed the planned level of service over the 10-year period immediately following the preparation of the background study required under section 10. 2006, c. 33, Sched. H, s. 2.
To recap: Toronto gets a complete reversal of the formula Ottawa is currently forced to operate under. The province recognized a big public transit project is unique and acted accordingly. Ottawa has not (yet) received a similar accomodation.
Were I a member of the Legislature right now I think the following private members bill would do the trick. I invite any current MPPs from the Ottawa area to copy liberally (or conservatively, haha) from this. I'm not a lawyer, but Toronto's example seems easy enough to adapt.
Easy enough it makes you wonder why it hasn't already been done.
Ottawa Light Rail Transit
5.2 (1) In this section, “Ottawa Light Rail Transit” means the creation of light-rail service located in the City of Ottawa from Blair Road to Baseline Station.
Provision does not apply
(2) Paragraph 4 of subsection 5 (1) does not apply in determining the estimate for the increase in the need for Ottawa Light Rail Transit.
(3) For the purposes of section 5, the estimate for the increase in the need for Ottawa Light Rail Transit shall not exceed the planned level of service over the 10-year period immediately following the preparation of the background study required under section 10.
(4) The method of estimating the planned level of service for Ottawa Light Rail Transit and the criteria to be used in doing so may be prescribed by regulation.