Growth Fees – Update #4

Continuing on with my regular update/perspective on the important topic of growth fees.  It’s been incredibly busy at City Hall this fall: the start-up of committee meetings (over 50 reports in the Standing Policy Committee on Infrastructure Renewal and Public Works alone), 2017 budget discussions, a City Council meeting, new garbage collection contract discussions, ward issues, the discussion and research involved in growth fees ….  and the list goes on.

 

The role of a City Councillor is an interesting one:

  • No Councillor can be an expert on every topic that merits a decision/vote
  • I read an average of 30+ administrative reports each week on different topics – which often results in many additional questions
  • A Councillor should research and gather information and a multitude of perspectives in order to make well informed decisions (between the phone calls, e-mails, meetings and community events)
  • The decisions made, and voted on, impact our entire City of nearly 800,000 residents
  • Many, many decisions have financial impacts that can range in the multi-millions of taxpayers’ dollars
  • Needless to say, I don’t take this role lightly and it does create a frequent number of sleepless nights!

 

The discussion surrounding growth fees has been occurring WITHIN City Hall for decades.  Department heads, Councillors, Mayors and CAOs have been discussing how to ensure ‘growth pays for growth’ virtually every 4-year term. Countless media reports can be found on the internet about Winnipeg’s discussions.

Previous City Councils have called for studies and reports which have been funded by taxpayers to attempt to understand if growth pays for growth.  Some reports determine yes – the costs being charged do support growth paying for growth.  Other reports have determined no – growth doesn’t pay for growth. The City mandates developers to prepare Cost Benefit Analysis reports to ensure the cost of a development pays for itself, before it receives final approval to proceed (ie: Waverley West, Ridgewood South, Sage Creek).   I hazard to say I’ve read up to 10 different reports seeking the answer to ‘does growth pay for growth in Winnipeg’.  To date, I do not have a clear answer either way:

  • This current Council set aside $250,000 in the 2016 budget to attempt to answer that same question. The methodology Hemson used to determine if growth pays for growth in this report differs dramatically from past City reports, eliminating any ‘apples to apples’ comparisons – and using many assumptions and estimations based on industry best practices.  SEE HEMSON Determination of Regulatory Fees to Finance Growth: Technical Report
  • Recently, the Urban Development Institute of Manitoba (UDI) and Manitoba Home Builders’ Association released a report briefing City Council and citizens on ‘Understanding Development in Winnipeg’  I am working my way through this report, which also presents a very informative perspective on development, paying for growth and the basis of assumptions. Myers Norris Penny was hired to create the report, I’m sure for a decent fee. SEE Understanding Development in Winnipeg Sept 20 2016

 

What really surprises and is somewhat dismaying in all of these reports and discussions are two points:

  1. Hundreds of thousands of $$ – from taxpayers and developers – have been spent trying to determine if growth pays for growth, and there is still no clear answer.
  2. The City and the development community have never engaged in a meaningful, well-defined process to determine the cost of growth.  Yes, I recognize the City has been talking about this internally for decades, but for whatever reason – both stakeholders have not agreed to sit down together to determine a process and work through details to answer the question: “What is the cost of growth in Winnipeg?”

 

TODAY, I am hearing loud and clear from the development community, that they want to do just that:

  • The development community has clearly stated they want to sit down and be part of a ‘meaningful, well defined engagement process’ with City representatives to determine the cost of growth.  I and all of Council have received this request from UDI and the Manitoba Home Builders’ Association.  To me, I am hearing ‘we want to talk’ and ‘we are open in working towards a fair and equitable structure’. SEE Letter to Mayor and Councillors Aug 31 2016
  • I also encourage you to listen to the September 21st presentations made by the development community to the Mayor and Executive Policy Committee.  The audio clip (at the end of this blog) provides an important perspective on development in Winnipeg.

 

In my research, I’ve noted that Calgary, Edmonton, Vancouver, and many other cities have engaged in a meaningful process with the development community to determine the real cost of growth. I cannot think of one reason why we wouldn’t do the same. Yes, it will be an arduous process.  Yes, there will be data to collect and analysis required.   There will be many perspectives and it will take time.  BUT – if we truly want to know the cost of growth, and set a solid foundation to grow Winnipeg – then we must roll up our sleeves, define a process and begin.

  • Not all growth costs the same throughout Winnipeg.  Our Winnipeg sets out a high level vision on how and where we want our City to grow, but it does not provide the depth of analysis required to know the cost of growth. We need to get to that point – which will take time and commitment.
  • The City must ensure new growth is sustainable and that new development pays for its impacts.

 

NEGATIVE IMPACTS WITH CURRENT PROCESS

I have serious concerns with where we are at in the City’s current process and approach to  the growth fee discussion.  To be clear, I am not leading this process but am providing input.

  • I have daily conversations with industrial, residential and commercial developers who are NOT proceeding with projects and purchases because of market certainty. They do not know what their costs/risk levels may be and are stopping investment projects and purchases.  This is negatively impacting our economy and jobs, and will only increase in the coming months – not just within the development community, but beyond.
  • I know development projects are being put on hold in Waverley West and other parts of the City due to market uncertainty.
  • Residents have been telling me they are holding off on planned home purchases. I’ve also heard many concerns from builders who’ve been speaking to potential Parade of Homes buyers, who are hesitant to purchase due to market uncertainty.

 

TO BE CLEAR:

  1. I absolutely support that growth should pay for growth.
  2. I strongly support enabling a well-defined and meaningful process with all stakeholders to determine the cost of growth in Winnipeg.
  3. The City must send a message in the very near future –  to the development community (in Winnipeg and beyond)  that the City will be participating in a meaningful, well-defined engagement process with a timeline, and that any fees would be phased in to ensure market stability.

I am relaying these points to my Council colleagues, in the hope that we will work in a timely manner to provide market certainty and begin meaningful discussions with the development community.

I encourage you to ask all members of Council to ensure a proper PROCESS occurs in a decision of this magnitude, and to ensure they do their due diligence and not base decisions on ideology alone.  Millions, if not billions of dollars, are in play. Our economy, jobs and families will be negatively impacted if we rush into a decision that is not well thought out.

I can not and will not support a rushed approach to a decision of this magnitude, a decision that will impact our City for years to come.

 

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