Q&A with city council candidates: Development Cost Charge Bylaw

Candidates for council and mayor reflect on the recent attempt, and failure, to update the Development Cost Charge Bylaw and what could be done going forward.

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Needed upgrades to Revelstoke's wastewater treatment facility is the biggest ticket item for the city's aging infrastructure. Photo: City of Revelstoke

The Revelstoke Mountaineer’s question and answer series with city council candidates covers a wide-variety of issues that are likely to be central to the upcoming municipal election on Oct. 20, 2018. The series features verbatim answers written by the candidates themselves. The questions were created by the Mountaineer’s civic affairs reporter Melissa Jameson and former Revelstoke Review editor Alex Cooper.

In this third edition of the Mountaineer’s question and answer series with city council candidates we asked council candidates to consider the following:

The recent attempt to update the Development Cost Charge Bylaw was extremely controversial in the community. With growth continuing and the need for major infrastructure upgrades in the coming years how do you envision the cost burden related to growth being split between existing taxpayers and development?

Here are the responses from the candidates who got back to us prior to our publication deadline:

Rob Elliot (candidate for council)

Rob Elliot is running for a spot on Revelstoke city council. Photo: Rob Elliot.

Revelstoke’s infrastructure is currently strained: the sewer system is inadequate; single route access to our south side needs reconsideration; roads need more than another patch; traffic control measures need revisiting; the list goes on.

Rapid growth in Revelstoke is forcing the issue. Beyond financing infrastructure installations/upgrades with debt and taxes, development charges have been collected here since the resort was established. The charges are meant to defer civic infrastructure costs arising from growth back to prospective developers. The DCC game however is tricky: transferring the entire cost of city assets (infrastructure upgrades) back to the development community stalls growth. Finding a fee structure that works for existing residents while insuring developers remain undeterred is a balancing act. Rushing the process has been a demonstrated misstep. Reviewing and prioritizing the infrastructure wish list at the centre of the latest controversy should be the starting point in establishing future financing allocations.

Nicole Cherlet (candidate for council)

Nicole Cherlet is running for a seat on Revelstoke city council. Photo: Nicole Cherlet.

Dividing the community along the lines of existing taxpayers and future taxpayers may be necessary, but it’s a painful exercise.

On one hand, we need to discuss how to properly charge as growth puts strain on our infrastructure. On the other hand, our infrastructure is aging badly, and would need replacement regardless of growth rates. The main complaint that I’ve heard regarding the DCC bylaw was a poor consultation process. I think we can do a much better job of engaging our community on these questions, and showing that their input is in fact an important part of the process, not just an item on a checklist.

The DCC process needs to be restarted with proper, meaningful community consultation. We must come up with compromises that everyone can live with, and rates that keep us within range of other municipalities.

We have a lot of tough decisions to make over the coming years. Our City team has done some great ground work, and the next council will be well set up to tackle these projects. If we can clear up the apparent issues plaguing communication within and from our City Hall, we’ll be able to move forward.

I’m not afraid to take on this challenge.

Michael Brooks-Hill (candidate for council)

Michael Brooks-Hill is running for a seat on Revelstoke city council. Photo: Michael Brooks-Hill.

It is unfortunate that the DCC update was so controversial. Part of the controversy arose due to a lack of communication and engagement from the city, and also the hurried way it was brought forward. Inevitably it will be a controversial subject, but with more patience and transparency, I believe we can have a civil conversation and reach a less contentious conclusion. DCC’s do need to go up, and the new burden on infrastructure should be paid for by the new developments. One thing I would like to see is a graduated system, especially for residential rates. A 1,500 square foot house should not pay nearly as much as a 5,000 square foot mansion with 8 bathrooms. Having flat rates is not a fair system.  Finding a fair and just solution to these issues is the only way to move forward together.

Steve Kent (candidate for council)

Steve Kent is running for a seat on Revelstoke city council. Photo: Keri Knapp.

Work done by the previous council was worthwhile and based on valid concerns.  I feel they were on the right track and laid groundwork that we can build on.  Unfortunately, the resultant fees were not competitive with comparable communities.

In order to move forward, the next council has to put the DCC discussion back on the table as soon as possible with the intent of having a new bylaw in place for the next building season. I feel that the place to pick up this discourse is the DCC project list.  The list was never prioritized, is not tied to any planning document and contains no assessment of timelines for implementation. If we accept that we can’t do everything all at once, then we can look at what we can afford and focus our resources accordingly. If the total value of the projects is attainable, both DCC and Municipal Assist Factor rates will be affordable and we can work toward a fair balance of what taxpayers and developers pay.

Gary Sulz (candidate for mayor)

Gary Sulz is running for mayor in the upcoming Oct. 20 election. Photo: Gary Sulz.

Income for the City comes in three ways: taxation, fees and charges. Development is growth, and with this comes needed upgrades to infrastructure; roads, water, sewer. If we had no growth, we would not need to upgrade this infrastructure, just maintain it.  Maintenance is a cost paid by the entire community, whereas, growth upgrades should be paid by development. But the controversy is over what balance works for all. We are all in this together and Council will need to continue to find a formula that is fair to all.

 

Cody Younker (candidate for council)

Cody Younker is running for a spot on Revelstoke city council. Photo: Cody Younker.

I was heavily against the recently rejected DCC bylaw for a few reasons. I feel that the City was not as open and transparent as they could have been and rushed through the project list. We must find a way to get infrastructure built but we cannot continue to come back to the citizens asking for more and more money. At the same time, we can’t increase the DCC rates exponentially and thus halt all future development. I think we really need to narrow down the project list and prioritize the top few. Adjust the growth rates and determine how much money we need for these projects and move forward. Once completed, we then do the whole process over again, adjusting rates and moving forward. By doing this, we can keep rates lower which will encourage businesses and developers to build here. I also believe we need some sort of infrastructure hotel levy. We would have each hotel charge a set fee (tbd) and that money would come to the city which would then be put towards infrastructure projects. It’s time that the thousands of people who come and use our infrastructure start paying to use it.

Peter Humphreys (candidate for council)

Peter Humprheys is running for a spot on Revelstoke city council. Photo: Peter Humphreys.

The recent DCC Bylaw update was “extremely controversial” because the first draft should never have left the front doors of City Hall. It is shocking that the original draft was even considered. The costs were overstated and the impact on developers and homeowners would have been devastating. The projects and their costs need to be re-evaluated and potential grants from other levels of government need to be included. Simply put, some of these projects can’t go ahead without grants.

Cost allocation is a delicate balance. There isn’t a magic pot of money which DCC’s will come out of. Developers will add it to the selling price of their units and homeowner- builders will have to add it to their mortgage. The only solution is overall cost reduction. Rising sewer and water rates will have to be balanced off with lower general taxation rates through spending cuts.

Steve Cross (candidate for council)

Steve Cross is running for a seat on Revelstoke city council. Photo: Steve Cross.

I see DCC decisions having 3 components – assumptions, fairness and competiveness.

Assumptions deserves a lot of attention for they drive cost estimates. After that fairness becomes critical:

Taxpayers should not suffer a permanent tax increase for something which is fundamentally a one time charge caused by the new development itself and which developers should be passing on in their pricing model.

Developers should not suffer extra charges for aging infrastructure that the taxpayers should have been paying maintenance for in the first place.

Reasonableness is key.

Consultation and engagement are critical.

Grandfathering for existing projects makes sense

DCC credits for certain types of projects we want and need also makes sense

Once that work is done we need to benchmark to ensure that our community is DCC competitive. Final decisions are made based on whether we think we need to be more competitive or less. Price too low and we could bubble out. Price too high and we could dry up. All said and done, we have to own the final decision as a community.

Tim Palmer (candidate for council)

Tim Palmer is running for a seat on Revelstoke city council.

The Development Cost Charge Bylaw (DCC) is an upfront taxation on development and building construction to help pay for new infrastructure (sewer, water, roads and others).  Without DCCs the burden of this cost falls on the general tax base.  The basics of the bylaw are simple: who pays for infrastructure: is it developers and builders or the general taxpayer?  The challenge is finding the right balance.  The details are complex and affect a variety of important social, economic and environmental factors such as affordable housing, municipal growth and sewage treatment.  This is not a black and white issue.

Recently a proposed bylaw to update the DCCs was defeated. There was public backlash on the update due to inadequate information and public input in the process.  An update to the DCC bylaw is overdue.   The new Council needs to reinvigorate the DCC review with robust public engagement and feedback.  This must include homeowners, developers, residents, local businesses, other interested groups and associations. I am committed to bringing the discussion back with the goal to have a fully vetted bylaw that balances all the community needs.  I would like to see balanced decisions on DCCs made within six months after the election.

Tony Morabito (candidate for council)

Tony Morabito is running for a spot on Revelstoke city council. Photo: Tony Morabito.

Ahh! DCC decision sloughed off to the new council to deal with! It’s probably why the majority of councillors are not seeking another term, however it must be dealt with as expediently as possible for development as I previously stated I supported to proceed. I envision the cost burden related to new construction to be borne totally by the developer and the costs related to aging infrastructure to be borne by the taxpayers, business owners and the developer in a formula that puts a larger burden on the developer if the upgrade required demands additional cost because of the development. I am not certain that all operating efficiencies have been explored or implemented and would like to delve into that with senior staff before making a decision.

 

Jackie Rhind (candidate for council)

Jackie Rhind is running for a spot on Revestoke city council. Photo: Jackie Rhind

As is the case with most things in life, I think the best approach is a balanced one; if there was an obvious solution to paying for our infrastructure upgrades, we would have figured that out by now. The way I see it, our first tactic is to apply for and seek support from federal and provincial grants. Revelstoke is not alone in its need to spend a significant amount improving infrastructure and the government has identified that this cost is often an insurmountable burden for small communities. I see the remainder of the cost being borne by increased DCC rates (not to the extent previously proposed), taking on cautious amounts of additional debt for projects with income-generating potential (i.e. public transport, affordable housing, high-density developments), and marginal tax increases.

As a taxpayer, I don’t want to see my rates undergo large increases year after year. The reality though, is that rates will increase to some degree but if we can keep them under control then we will be in line with other communities of our caliber – we have unprecedented quality of life here in Revelstoke, to think that all this comes at no cost seems a bit unreasonable.