Huntsville informed that discounting development charges during growth can impact property tax
Huntsville Committee was informed that discounting development charges during growth can impact property tax, in the November 12, 2024, Special meeting.
The staff report highlighted the impact of DCs related to ongoing growth in the Town. It indicated, “Should Huntsville discount the DC and the growth occurs, the expense will still need to be budgeted for, and the cost will be primarily funded by property tax.”
According to the report, the current by-law “included a discount of the residential DC of 42.5% and maintained the previous charge for non-residential which resulted in an approximate discount of 82%. The amount of DCs collected for Huntsville over the term of the existing by-law is approximately $4,200,000,” which would be over $10,000,000 if the full DC rate was charged.
It adds that the current rate for a single detached unit is $7,071, and non-residential is $15.30 (calculated rate is $87.45).
It continues, “The total amount of capital projects is in excess of $60,000,000 and if approved to proceed, would require future budgets to include funding from the non-growth-related share.”
Staff also provided Committee with a list of growth-related project items applicable to DC’s, which were reviewed and some revised, and will be used to assist with decision making for the new by-law.
The report indicates that the projects account for approximately 30% of overall costs and “removing them would result in approximately $7M in funds that will need to be funded from other sources, and discounting the rate will reduce the amount of DCs that are eligible to be used.”
$25 million in road upgrades and widening was included in the project list as a growth-related item, indicates the report, which adds that if the DC funds aren’t available to contribute to the costs other funding sources will be required to move forward with the projects. For instance, if the new Fire Hall was discounted by 75% the Town would be responsible for finding an additional $2 million to fund it.
Director of Financial Services/Treasurer, Julia McKenzie, explained that the total cost of the new Fire building will cost $9.6 million with a DC charge of almost $2.6 million, which could change over the upcoming years.
Staff recommended that Council consider planning for projects anticipated over the next 10 years, such as the Madill operations building, sand and salt dome, library, and replacement of Fire Hall #1.
Committee members also agreed to have future discussions about providing DC breaks to family’s building homes.
Councillor, Rick Morrison, suggested the focus moving forward should be to, “look at incentives for first time buyer’s and different ways we can incentivise builds.”
Councillor, Cory Clarke, shared feedback from rural residents concerned about DC costs for severing lots for their parents or kids. He said this is also worth ongoing discussions “so that we’re not putting so much financial pressure on people that are trying to sever a rural lot off for family members.”
Clarke added, “Those increases are going to be very substantial so I think anything we can do to try to offset the pain is key here.”
Committee also agreed that they will likely use a phased in approach, which will be discussed further in the upcoming meeting.
McKenzie advised Committee that once the DC by-law has been approved by Council it will remain in effect for 10 years.
Staff will bring the by-law back with the revised rates to the next Committee meeting on November 24th, and it will be presented to Council for approval December 9th.
