Major capital projects such as a new South End Community Centre and new main library could be in jeopardy.
Bill 108 changes the amount and the ways a municipality can collect and use development charges (DCs) that are used to fund city building projects.
Guelph’s new $60 million South End Community Centre is supposed to get 90 per cent of its cost covered by DCs.
“I wanted to be able to cut the ribbon on that for the community by the end of this term and I’m scared that the scissors for that will be just sitting on the shelf,” Mayor Cam Guthrie said in an interview.
A memo sent from city staff to members of council last week reaffirmed the mayor’s concerns.
“The changes proposed will impact municipal revenue from DCs and thus our ability to fund future infrastructure projects such as the South End Community Centre,” said the staff memo.
The memo is in preparation for a Friday meeting of the Large Urban Mayors Caucus of Ontario, of which Guelph mayor Cam Guthrie is chair.
“As the mayor, I’m very, very concerned,” Guthrie said, adding that so are most municipalities.
“Our priorities would have to be re-looked at and it would have to be filtered through an affordability lense of what our taxpayers could handle,” he said about what could happen.
“To be blunt, the taxpayers should not have to front these costs.”
A new main library will cost over $50 million and 35 per cent of that was to be funded through development charges.
Development charges is essentially growth paying for growth.
Those building new subdivisions, apartment buildings and workplaces are charged fees which are then used to pay for the things that growth will create a need for from the city: everything from sewers, parks, sidewalks and traffic lights to major items such as a new community centre and library.
An example of a recent project that was funded primarily through development charges would be the new skateboard park. That cost the city $1 million to build, with $700,000 coming from DCs.
City treasurer Tara Baker also expressed her concern.
“Eliminating DCs for recreation, paramedics, and libraries will leave us all short changed. Moving us farther away from growth paying for growth,” Baker tweeted.
“The reality is, depending on those projects, they can be mostly paid for not by the taxpayers of Guelph, but by those DCs when developers are building those subdivisions out,” Guthrie said.
The new legislation, he said, “challenges the historical pathways” that DCs can be used and the entire burden of major capital projects could be completely on the shoulders of taxpayers.
So how would the city make up shortfalls if new legislation reduces those development charges and limits what they can be spent on? he wonders.
“It puts in jeopardy many capital projects that are funded by development charges.”
Guthrie said municipalities are asking the province lots of questions about the proposed changes but so far “don’t have answers back.”
“This is not set in stone. That’s why we’re shooting off flares right now, so everyone can be aware of these issues,” the mayor said.
“But without clear definitions of impact from the provincial government, this is what we’re facing.”