Collingwood council is being asked to reduce the development charges created to help pay for the water treatment plant expansion now that the province has provided $70 million toward the cost.
The charges were passed in a bylaw last year, prior to the town receiving news about the grant.
Because about 26 per cent of the cost of the new treatment plant is now covered by the money from the province, a readjustment of town charges to reflect the new cost to the town is recommended, said Jaclyn Hall from Hemson Consulting Ltd. as she presented the proposed adjustment to council during a meeting on March 17.
Overall, with some details still to be calculated, Hemson recommends an eight per cent reduction in the water treatment plant rate, which is the development charge levied on new development and specifically allocated to the water treatment plant.
The current cost estimate for the water treatment plant is $270 million. With the provincial grant applied, the total amount required from the town is $200 million.
The Town of New Tecumseth, which receives drinking water from Collingwood via a pipeline, has agreed to pay 63 per cent of the cost based on their share of the water, which is $126 million.
The Town of Collingwood is on the hook for $74 million, which includes $32.7 million in costs that will be collected after 2041 through development charges calculated in a new study as the current one considers 2025 to 2041. This also reflects the fact that the water treatment plant will have capacity for development that occurs past 2041.
Development charges are imposed on new development to fund costs deemed to be growth-related. They exist based on the underlying principle that growth pays for growth.
Hemson calculated a $35.5 million portion of the plant is eligible to be covered by development charges between now and 2041.
Some of the water treatment plant expansion costs ($5.8 million) are not eligible to be covered by development charges because the treatment plant will also serve existing residents, meaning some of the costs are replacement, and some are growth-related.
The dollar values of the reductions recommended by Hemson are:
- Single and Semi-detached: less $797 per unit for total of $9,039 water treatment plant fee.
- Multiples: less $593 per unit for a total of $6,724
- Apartment with 2+ bedrooms: less $474 for a total of $5,379
- Apartment with 1 or fewer bedrooms: less $296 for a total of $3,362 per unit
Non-residential development charges would be reduced to $49.10 per square metre, which is $4.39 less than the current charge for the water treatment plant.
The March 17 meeting was the statutory public meeting required to make a change to the town's development charge bylaw.
The bylaw comes to council for a final vote on March 31, which is the earliest it could be passed.