City councillors gave the Development Cost Charges bylaw its third reading Jan. 13, 2020. Changes to the bylaw will see an overall reduction of approximately $103 million in DCC project costs. (Contributed)

Vernon builders to save big on development fees

Council gives third reading to bylaw changes which will result in an approximate $103M net reduction

New developments in Vernon will have to pay less Development Cost Charges (DCC) after city councillors passed third reading to amend the bylaw.

The changes mean there will be an overall reduction of approximately $103 million in DCC project costs.

“There aren’t very many communities sitting around talking about decreasing the DCC in such a systematic way,” Mayor Victor Cumming said during a council meeting on Jan. 13. “This is a very unusual thing.”

DCCs are a one-time charge, paid by developers, to provide funds to supplement the city’s capital projects, such as expanding sewage, drainage and highway facilities to serve, directly or indirectly, the development itself.

City manager of engineering development services Ed Stranks said the dramatic reduction in costs to developers is achievable, in part, by tightening the timeframe to 20 years.

“The 2009 DCC dealt with end of development in the city and this now deals with shortened time frames,” he told council in a presentation. “A lot of projects, not just the size and scope, but the timing of those projects basically aren’t within the current timeframe so we were able to dramatically cut those projects down.”

The amendments to the bylaw also see the removal of projects no longer required, those past the 20-year scope of the bylaw and projects already completed. Changes also include the addition of new projects required to support growth in the next 20 years and changing from the long-term ‘ultimate’ build out to a 20-year timeframe, while updating all project costs and benefit allocations when appropriate.

“If we had gone the other with the DCC, we may have a seen a very full gallery,” said Cumming.

Stranks echoed the mayor’s comments about the unusual direction council took.

“Dealing with the consultant, he made the same comment,” Stranks said. “This is not something that happens very often — especially to the scope we’ve done here.”

Previous DCC rates in the bylaw were based on a full build-out projection population of an additional 16,577 units. With the amendments, a 20-year residential growth projection of 5,471 units, creates a realistic shorter term for accountability and construction expectations.

Proposed projects to be added include projects necessary to provide improved transportation facilities and address drainage issues in the city.

Developments for single-family lots will see a 16.2 per cent decrease in DCCs, from $16,429 to $13,766, in Development Districts 1 and 2, while developments in District 3 will see a 2.3 per cent decrease — from $21,182 to $20,692.

However, these do not include additional DCCs for Regional District of North Okanagan’s Water and Parks, nor the City of Vernon Parks DCC costs.

Although savings in District 3 don’t seem as significant in comparison to 1 and 2, the city said when compared to the cumulative inflation since 2010, rates are significantly reduced.

For comparison, DCC rates in other communities in the Thompson-Okanagan region as of June 2019 (for single family DCC) are as follows:

  • Kelowna – $23,606 (core) to $41,125 (outer)
  • West Kelowna – $21,669
  • Penticton – $13,262 (core) to $17,458 (outer)
  • Kamloops – $10,673

Coun. Dalvir Nahal said this shift is “exciting.”

“I know last term this is something I was passionate about,” she said, noting she expected more feedback from the development community.

For more information on the City of Vernon’s Development Cost Charges, visit vernon.ca.

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@caitleerach
Caitlin.clow@vernonmorningstar.com

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