To develop a methodology for calculating and collecting development charges which is consistent with the Development Charges Act.

Development Charges Background Study

1.0 Purpose

The Development Charges Act provides a legislative framework for municipal development charges. The Development Charges Act was last revised by Provincial Bill 98 in 1997. Under this new legislation, the former Region and former municipalities formulated development charge by-laws. The Development Charges Act states that municipalities must update and complete a new background study to determine development charges within a 5-year period of the existing development charge by-law initiation date. In addition, staff feel that the amalgamation plus proposed increased growth-related development brought about by the new development priorities of the amalgamated City of Hamilton (i.e., Airport, ROPA9) (Council’s Strategic Commitment priority one – “Growing our Local Economy”) requires that a new amalgamated Development Charge By-law be initiated.

The purpose of this background study is to establish a new development charges by-law for the amalgamated City of Hamilton.

This is expected to involve:

the development of a methodology for calculating and collecting development charges which is consistent with the Development Charges Act;
the collection and compilation of data necessary to calculate development charges;
the development of policies for the implementation and administration of the development charges by-law;

2.0 Background

Effective January 1, 2001, the Region of Hamilton-Wentworth and the lower tier municipalities (City of Hamilton and the City of Stoney Creek, Towns of Ancaster, Glanbrook, Dundas, and Flamborough) were restructured into a single tier municipality – The City of Hamilton.

The Development Charges Act, 1997 came into force and effect on March 1, 1998.  Under this new legislation, the former Region and the respective lower-tier municipalities formulated development charges by-laws, which came into effect during the period July - August, 1999. The amalgamated City of Hamilton has kept the existing Development Charge By-laws in place which means that currently there are 60 development charge rates in the new City of Hamilton depending upon which former municipality the development occurs.

The Development Charges Act states that municipalities must update and complete a new background study to determine development charges within a 5-year period of existing development charge by-law initiation date. Therefore, the City of Hamilton must pass a new development charge by-law by July 2004.  In addition, since amalgamation, the City of Hamilton has completed or initiated a number of studies, which would necessitate a new development charges background study. These include:

GRIDS (Growth-Related Infrastructure Development Strategy);
Infrastructure Needs Study;
Recreation Master Plan and background study;
Long term plans for Ambulance service;
Strategic Plan for Library services;
Road Needs Study;
OSIM Bridge and culvert inspections;
25-year Waste Master Plan.
The City of Hamilton has determined that a review of its Development Charges By-law and related policies is necessary given the new studies and resulting growth-related fiscal requirements.

3.0 Scope of the Study

The consultant will be responsible for the preparation of a detailed development charges study, which will result in the calculation of reasonable development charges for the amalgamated City of Hamilton.  The consultant will also attend required public meetings, develop an implementation policy for the development charges by-law and be available to the Municipality, as an expert witness in the event of an Ontario Municipal Board appeal.

It is the expectation, that working under the consultant's leadership that City staff will provide the data base necessary for completion of the study; and further that senior staff working with the consultant will be actively involved in other essentials to the study such as:

growth projections;
areas to which development charges apply (municipal wide versus area specific);
review of existing development surcharges for special areas as well as possible new areas (e.g. ROPA9, Glanbrook Industrial Park, Airport area developments);
existing facilities/infrastructure;
future capital needs;
allocation between class including mixed users;
change in uses;
exemptions;
impact on development industry; the existing community; and economic development;
development charge collection policies and other administrative matters.
3.1 Study Details

1. The consultant will derive an appropriate methodology, in accordance with the provisions of the Development Charges Act, upon which to base the actual charge.  The consultant will consider the following criteria in developing the methodology:

extent of land area to which the development charge will apply;
municipal wide versus area specific charges;
application of existing or new surcharge areas;
the development charge by type and allowable level of applicable services, based on the municipality's 10-year average level of service. If an average level of service is not appropriate due to the amalgamation, to come up with a new level of service for the amalgamated City of Hamilton;
the applicable capital and operating costs for each service for which, development charges can be imposed under the Development Charges Act;
the percentage reduction for some services as required under the Development Charges Act;
the development charge by type of development under various scenarios;
structure and method of imposing both residential and non-residential charges;
the basis for crediting the growth related portion of the property tax;
development charges for redevelopment intensification;
the rules regarding exemptions or reductions of charges to particular development types;
the rules for the phasing in of development charges, where applicable, and the indexing of development charges based on the prescribed index.

2. The consultant will be required to lead the City staff in developing the database necessary for completion of the background study and to support its recommendations.

3. The consultant will undertake a front-end financing review of the capital works projects, both current and projected, to determine the capital components applicable to the development charges calculation.  An analysis of historical capital works and capital budget forecasting will be required to achieve the total capital costs anticipated within the forecast period.  The consultant will be responsible for segregating these costs into the leviable component and the non-leviable component and for accounting for subsidies/recoveries in order to determine the true net growth related capital costs for the forecast period.

4. The consultant will review exemptions and credits under the existing development charge by-laws and under existing City policies and provide an analysis of the impact of such exemptions and credits on financial cost-recovery.  A similar impact analysis will be completed for potential exemptions.

5. The consultant will outline appropriate cost-recovery policies.

6. The consultant compare development charge rates and cost-recovery policies in neighbouring municipalities and regions, including Halton, Peel, York, Durham, Kitchener-Waterloo, Niagara and Brantford.

7. The consultant will produce a development charge schedule for the municipality.

8. The consultant will evaluate the potential effects of the proposed development charges on the rate of future residential and non-residential growth in the Municipality.

9. Based on the proposed development charge methodology and the analysis of all data collected, the consultant will prepare a draft report for the review and approval of the Development Coordinating Committee, the Development Charges Stakeholders’ Committee, and Council.  This report will include all policy recommendations, an assessment for all methodologies being proposed, background technical information and the legal basis upon which the findings of the report can be substantiated.

10. The consultant will present the report to the Council and at public meetings as required.

4.0 Timing of the Study

Proposals are to be submitted to Nadine Kelly (contact information listed below in Section 10) by Friday April 18th, 2003 at 4:00pm.  The study is expected to be awarded and commence in early May 2003.  The Background Study is expected to be completed no later than February 2004, with approval of the new By-law in May 2004, or such other timetable as may be mutually agreed upon between the consultant and the City of Hamilton.

5.0 Development Coordinating Committee

The consultant will work with and report to the Development Coordinating Committee (DCC) which is composed of staff from Corporate Services, Planning, Economic Development, Public Health & Community Services, and Public Works.  Other departmental and boards/agency representatives will be required from time to time in the areas of Social Services, Police, Emergency Services, etc.  The consultant should include provisions for meetings with the DCC:

at the commencement of the study to discuss the work plan to identify duties and responsibilities for all the participants and further to ensure that sufficient time is allocated for the completion of the assigned duties and responsibilities;
interim reporting meetings to discuss methodologies and data integrity;
meetings to discuss the draft report and any modifications or amendments;
any other meetings staff or the consultant feels is appropriate.
The consultant should also budget for the time required to present the report to the Municipal Council and required public meetings.

6.0 Development Charges Stakeholders’ Committee

The consultant will also meet from time to time with the Development Charges Stakeholders’ Committee which will be comprised of Councillors, representatives of the Hamilton Halton Homebuilder’s Association, the non-residential development community, the Hamilton Chamber of Commerce, and non-developer community group representatives. The committee would be supported by city staff. The intent of this group is to review development charge proposals, provide input, and bring issues or concerns to the fore during the study process to reduce the need for lengthy appeals.

7.0 Proposal Requirements

The background of the firm/consortium indicating similar projects completed elsewhere and curriculum vitae of the personnel assigned to the project.
If a consortium of firms is to be used, information is to be provided on the number and nature of past projects involving the same consortium and the lead-consulting firm responsible for coordinating and liaison.
Identify all study team members by area of responsibility and role in the study.
Identification of the project manager who will act as the designated liaison.
A detailed description of the consultant's approach to meeting the scope of the work including a workplan and time chart for carrying out the phases of the study and including a critical path delineating what staff resources will be required, when they will be required and what information is to be provided.
A detailed cost estimate for each phase, which includes the number of days required to complete each of the tasks by each member of the study team.  The proposal will include a table showing the per diem rates for all study team members.  The overall study costs for both professional fees and expenses shall be an upset limit.
The consultant is requested to provide at least three references, including contact and phone number.
The financial responsibility for the advertising of all public meetings will rest with the Municipality.
A list of past work undertaken should identify any conflict of interest with respect to the consultant conducting work with developers currently operating in the City of Hamilton.
Twenty copies of all interim reports and 50 copies plus one electronic copy of the final report and any supporting schedules must be submitted.
The final report shall include an executive summary including recommendations.
The consultant should identify the study team member(s) who would be responsible to provide expert testimony before the Ontario Municipal Board if a Board hearing is required.  The applicable per diem rate of this person should also be provided.
The proposal should not exceed 10 pages in length.

8.0 Ontario Municipal Board Challenge

In the event that an objection is lodged with the Ontario Municipal Board with respect to the passage of a development charges by-law by the Municipality the consultant will be expected to appear and defend the study report at the Board hearing.  The costs associated with the consultant's appearance before the Board as an expert witness will be charged to the Municipality, at the consultant's prevailing OMB per diem rate.

9.0 Proposal Evaluation

Based on the proceeding, the proposals will be evaluated as follows:

Proposal Evaluation Weight Factors
A. Understanding of the City’s Requirements - 20%

understanding of the existing conditions (5 points)
understanding of the goals and objectives (5 points)
understanding of the functional/ technical requirements (5 points)
understanding of constraints and issues (5 points)
B. Work Plan and Schedule - 30%

methodology (5 points)
action plan (5 points)
list of deliverables (5 points)
does the workplan fit within the time constraints (5 points)
identification of required City inputs (5 points)
management of the services (5 points)
C. Experience of the Consultant - 30%

experience on similar projects (5 points)
depth and range of experience (5 points)
qualifications of designated individuals (5 points)
list of references (5 points)
capability and capacity to perform the services (5 points)
commitment of qualified resources (5 points)
D. Cost of the Project - 20%

cost of the services (20 points)

Lisa Kelsey, Legislative Coordinator

Email: Lisa.Kelsey@Hamilton.ca

Telephone: 905-546-2424 ext. 4605