DCCs would quadruple under draft plan

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This article was published 07/12/2023 (1069 days ago), so information in it may no longer be current.

The first draft of a review of Brandon’s development cost charges (DCC) program proposes that rates almost quadruple, according to the city’s head of development services.

In early May, the city awarded a contract worth $132,194 to Watson & Associates Economists and Dillion Consulting to review the fees the city charges developers when they build projects to help pay for infrastructure maintenance and upgrades, and propose updates to them and associated bylaws.

The DCC bylaw was passed by Brandon City Council in 2018 and went into effect in 2019. Rates have largely remained the same, except for some minor cost-of-living increases.

Mark Allard, Brandon’s general manager of development services, told the Sun on Wednesday that the consultants have submitted a first draft of their report and that both city council and local developers have been briefed on the findings.

“On average, the costs for development charges that the city recuperates is about four times what they were,” Allard said of the draft. “That’s based on estimated infrastructure costs over the next 20-year period.”

The proposed rates, Allard said, now account not only for the price of an infrastructure project but how much it will cost the city to service the debt associated with those projects.

Instead of being indexed to the consumer price index for yearly inflationary increases, the proposed rate structure will be tied to the infrastructure construction price index, which Allard said is typically higher.

Other improvements have been suggested in how the city estimates the price of projects.

Developers have expressed concern about the proposed rates, Allard said.

“The industry has already been vocal on this … that the proposed increases are maybe not sustainable,” he said. “Can they continue to develop with what the true costs are? That’s kind of the first bit of information we put out, just the raw details of what we think the cost of growth is going to be from an infrastructure perspective and how that reflects in the DCC costs.”

Ultimately, Allard said, council will have to determine how they want to implement the new rates and the city will have to prepare a final draft of the report based on feedback from councillors and the industry.

He said the hope had been to have the final report in November, so the process is a little bit behind schedule.

The new rates would be implemented sometime next year, which will involve getting permission from the Public Utilities Board. It remains to be seen whether the increased rates will be implemented all at once or phased in over time.

Because the city is still determining the total financial cost of the southwest lift station project and what the interest rates on the debt will be, Allard said administration doesn’t know how much more quickly Brandon will be able to pay off debentures associated with the project under the new rates.

A report on the lift station project presented to Brandon City Council at Monday’s meeting stated the city is proposing a funding model that would see developers pay for the construction of gravity mains associated with the project that go under and through their developments, with areas requiring oversized construction to receive financial assistance from the development cost charges fund.

“I think this is a bit of a first for us,” Allard said of that approach. “Since the DCC program has been in place, I think we’ve dealt with much smaller aspects of development … These new options probably make better sense and they actually better align with the policies.”

The report states that involved developers rejected a funding model that would have seen them each provide a $1-million financial contribution toward the construction of the gravity mains. Allard said he has yet to hear feedback from developers on the funding model the city is now proposing.

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