Details lacking on how ‘growth will pay for growth’

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This article was published 06/12/2023 (1023 days ago), so information in it may no longer be current.

“In discussion with the (Development Cost Charge program) consultant currently reviewing the DCC rates, Local Servicing Policy and By-Law, Administration has been confirmed all debt servicing of borrowed funds for the SWLS project will be offset by DCC Reserves, over time, confirming growth will pay for growth.”

— City of Brandon’s southwest lift station report

Pay careful attention to that statement.

It was included as part of a supplementary report on the funding for the southwest lift station project that was tabled – and barely touched upon – at Monday night’s city council meeting before discussion was deferred to council’s Dec. 18 meeting.

This supplementary report is notable in the fact that it contains a proposal that developers help pay for gravity mains for the project as a means to address projected cost increases that the city would otherwise have to take on.

The debate over the southwest lift station bylaw last February was among the most controversial items on council’s agenda in several years, with some members around the table visibly frustrated with each other and still others decrying what they believed was misinformation being spread about the project.

The bylaw, which was approved by Manitoba’s Municipal Board, allows the city to borrow up to $30 million in total for the project, which will build two new lift stations and associated watermains in southwest Brandon. But an amendment to the bylaw that was introduced by Coun. Shawn Berry at the time – and only narrowly passed by a 6-5 vote – only allowed Brandon to enter a debenture for $18 million at the time.

Monday’s report states that the overall price tag for the project, which includes two lift stations with gravity and force mains, has grown to $31 million. The lift stations and forcemains aspect of the project is estimated to cost around $21.565 million with the gravity mains phase costing around $7.8 million.

And as we reported Monday, five funding scenarios for the gravity mains have been discussed, with administration recommending a scenario that would require developers to build and pay for the gravity mains running through, or located internally within the development.

Instances of oversized construction would receive financial assistance through the city’s development cost charges program.

That’s where the situation hits a bit of a snag. Monday’s report, which lays out the five funding scenarios that were under consideration, still lacks any details about exactly how “growth will pay for growth.” There are simply no detailed numbers to accompany that document and make the administration’s case.

Following a lengthy public discussion period, Brandon’s previous administration under then-mayor Rick Chrest approved the original Development Charges Bylaw in 2018, which ultimately took effect on July 1, 2019.

The fee structure, which remains in place today, is based on whether a new development happens within an established area or an emerging area, which includes the portions of the city not within the established area, such as the North Hill and airport. The city’s industrial area is excluded from the development charges.

While there have not been any major changes to this bylaw since it was enacted and came into force, the fees have increased slightly to account for inflation. Under the rules of the bylaw, the development charges were supposed to have been reviewed every three years, but the city remains behind in completing the very first one.

A study reviewing the program and suggesting increases to the charges was originally supposed to be completed by the end of 2022 but has yet to be finished. And considering the rising costs of the southwest lift station project, that is problematic.

In August of 2022, we reported that not enough money had been collected at the time to pay for any upgrades, even as costs have been rising substantially. Back in January, when we reported that the cost of the lift station project could reach upwards of $35 million or higher, the city had about $1.4 million in its various development charge reserves: $125,000 for water treatment, $150,000 for wastewater treatment, $230,000 for the water network, $415,000 for the wastewater network, $420,000 for the transportation network and $60,000 for the drainage network.

More than a year later, we’re still without a final report in hand, and the longer this review takes, the less money the city is taking in to pay for any new development.

According to tender documents from March of this year, the review was supposed to have been completed by Nov. 3, with engagement sessions to be held with council and “industry stakeholders” (developers) soon after. While they may have received this information, they have yet to tell the rest of us.

Strong statements require equally strong evidence.

» Matt Goerzen, editor