Fees, Levies, and Intermunicipal Servicing Agreements

Objectives

  • Support mechanisms for cost sharing between municipalities to allow for efficient local coordination of infrastructure
  • Provide for consistent and predictable development levies and servicing agreement fees across the P4G Region
  • Support funding and development solutions that provide for required intermunicipal infrastructure extensions and servicing

 

Context

For the funding of local and regional infrastructure, development charges are identified as the primary mechanism to receive payments from developers to support on and off-site infrastructure, including both linear infrastructure and facilities. This is intended to ensure that future growth “pays for itself”, and that there is the recovery of the cost of infrastructure necessary to support new development. Two types of charges on development are typically used:

  • Servicing agreement fees, charged to a developer for subdivision
  • Development levies, charged to a developer for a change in land use intensity or new development on a site

 

In addition to these charges, other approaches can be used to finance the costs of growth. Utility rates to customers may be used to finance infrastructure to new development, as well as funding from senior levels of government.

A municipality may also coordinate servicing agreements to allow developments to be serviced directly by a different municipality. This arrangement requires that payments are made directly to the service provider, and can require an agreement that specifies that the other municipality is responsible for capital costs, which would be passed on to the developer. However, these approaches do not allow for charges for indirect costs, such as general facilities expansion costs, which can complicate efforts to recover costs. They also do not address future services that may be available in an area, which complicates interim development in future urban growth areas.

Within the P4G Region, there are several considerations to be made with the coordination of fees, levies, and agreements.

  • Regional funding support needed for infrastructure projects. Development levies and servicing agreement fees will likely be important to support regional infrastructure development. This may include infrastructure that benefits the entire P4G Region, such as a regional wastewater treatment plant, or areas within a portion of the P4G Region, such as drainage improvements coordinated by the OCWA. These types of multilateral fee/levy arrangements have not yet been developed within the P4G Region, however, and may require legislative change to implement fully in the P4G Region.
  • Framework for intermunicipal servicing agreements needed for potential infrastructure extensions. Specific areas within the P4G Region, such as the Silver Sky development, the Grasswood area, and the proposed Agri-Food Node between Osler and the RM of Corman Park, may require urban servicing to be extended to these locations. Providing urban services for growth areas should be supported by a framework for intermunicipal servicing agreements.
  • Coordination of agreements within future urban commercial/industrial areas. Urban municipalities may be challenged by interim growth in identified future urban growth areas, if that growth does not contribute fees or levies to support infrastructure extensions. Discussions are ongoing between the municipalities to determine a workable solution that enables additional interim rural development in future urban growth areas while considering the needs for cost recovery for infrastructure extension. This may also require legislative change to allow for cost recovery on areas incorporated into urban municipalities. Intermunicipal development agreements, which are agreements between municipalities that can address service provision and funding contributions, could also be explored.

 

Regional Actions

  • Provide support for intermunicipal agreements. Municipalities should facilitate intermunicipal servicing agreements and/or intermunicipal development agreements to support urban and rural development in the P4G Region that aligns with the Plan, and ensure cost recovery for the service provider.
  • Coordinate joint applications for funding. P4G should work to coordinate applications for funding from senior levels of government and other organizations (e.g., the Federation of Canadian Municipalities, etc.) for projects of regional benefit. These applications would be submitted jointly on behalf of the municipalities, and indicated to be supported by the entire P4G. The schedule and priority for applications should be coordinated through the P4G Business Plan.
  • Petition the provincial government for legislative change. P4G should continue to lobby the provincial government to change relevant legislation for development levies and servicing agreement fees to consider the needs of urban municipalities for cost recovery for future urban servicing. This shall require ongoing discussion with the Ministry of Government Relations and other agencies regarding the appropriate changes to be made.
  • Support and, where applicable, manage regional fees and levies. As the municipalities within the P4G cooperate on a greater range of regional projects, there will be a need to provide a consistent system to provide regional funding support through specific mechanisms. This may include both regional projects coordinated by P4G and projects coordinated separately through multilateral agreements. P4G should provide support for the calculation and use of regional fee and levy systems.
  • Coordinate servicing with First Nations. First Nations should be engaged in the planning and development of regional services, and agreements should be explored to allow First Nations to share in the costs and receive benefits from regional infrastructure projects.
  • Support ongoing negotiations regarding servicing agreements for long-term extensions of infrastructure. The continuing negotiations between municipalities regarding long-term servicing agreements to support cost recovery for urban services should be supported. Policies and plans should work to support a fair and equitable approach agreed upon by both parties.