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Delta not giving developers a DCC discount, insists councillor

The city used growth projections to come up with new rates that will be phased-in over two years using a municipal assist factor
DCCs are fees collected from land developers to help fund the cost of the new infrastructure and parks needed to service new development. Sandor Gyarmati photo

There’s been lots of misinformation about the City of Delta updating its development cost charges (DCCs).

That was the message from council regarding the approval of a new set of DCCs and claims a municipal assist factor (MAF) would benefit developers.

DCC’s help fund transportation, water, sanitary sewer, drainage and parks projects needed to support the additional demands generated by new residential, commercial, institutional, industrial and agricultural development.

A report to council notes that staff reviewed the options for phasing in new rates with a consultant and believe that offering the 20 per cent MAF for one year, before reducing it to one per cent the following year, will lessen the impact of the higher DCC rates for all land use categories and provide a reasonable transition period from the current 10 per cent MAF.

Staff did not recommend extending the 20 per cent MAF rate for a second year, given that the public has been aware of the DCC update taking place for over a year and that Delta’s proposed rates were still lower than many comparable cities, the report adds.

The 20 per cent MAF city wide phase-in rate will only apply to applicants who apply and receive their building permit within one calendar year of the DCC adoption date.

Saying there’s been misinformation about the report, Coun. Dylan Kruger at council’s Dec. 11 meeting asked staff what was the current DCC rate was for a new single-detached dwelling in the city and what the rate would be in 2024.

Deputy general manger Macy Sangret told council a new lot to accommodate a single-detached dwelling, which is in a low-density category, was $11,942. In the first year of the new rate, that would increase to $14,225, In the following year, once the MAF is lowered, the DCC will be $19,342.

Kruger said that means the cumulative increase for a single-family home over two years is 62 per cent.

He then asked Sangret to clarify what is an assist factor, noting it’s clearly not a discount for developers.

Sangret explained that the City of Delta has not had a major DCC update for a number of years, so the rates across all categories were proposed to increase, while the MAF is used to determine what proportion of the costs of the DCC capital projects would be assisted by local governments.

Delta has historically used a 10 per cent assist factor, while other cities have typically used one per cent, said Sangret, adding that the city is now moving to be the same.

Noting the Delta DCC increase a significant one, Kruger said, “I think any reasonable person would agree that a 62 per cent increase from one year to the next would be egregious. So, the point of the assist factor is to bring in these changes gradually over a two-year-period. Because, when somebody goes and purchases a property to build their dream house, or a townhouse project or a condo project, they make certain assumptions on municipal fees. They’re not assuming a 62 per cent increase in fees over a one-year period. This is the rational for a one-time bump in the assist factor before going back to one per cent,” he said.

Kruger added cities can’t have zero for an assist factor and are required by the province to have some level of MAF.

He also said the city needs to have regular reviews with small incremental increases to adjust for inflation and other factors, rather than having to impose much larger hikes.

The DCC rate increase for a new condo or townhouse per dwelling unit increases from the current $6,079 and $8,252 respectively to $9,672 and $13,181 respectively, once the MAF is at one per cent.