Controversial development could prove to be financially good for Summerland

The proposed Banks Crescent seniors’ housing project could represent a financial windfall for Summerland, council heard Monday.

Staff say the municipality could realize a surplus approaching $500,000 a year upon completion of the project, plus a one-time payment of close to $3 million in development cost charges.

A conservative estimate of the surplus funds per year is $429,041 — $283,849 net from the general fund and $145,192 net from utilities, according to director of finance David Svetlichny.

The figures were part of the financial and infrastructure analysis presented by Svetlichny and director of works and utilities Kris Johnson.

Their analysis was based on information provided by the developer, discussions with representatives from B.C. Assessment Authority and the municipality’s own data, among other sources.

“As noted throughout the report, there are a lot of assumptions, generalizations and subjectivity to quantify some of these values, however, staff feel this report provides the information requested by council,” Svetlichny and Johnson advised council.

The annual municipal taxation revenue is estimated to be $296,949.

“This equates to about a 3.9 per cent increase in property taxes each year,” Mayor Peter Waterman said after the meeting.

“It would allow us to undertake large major capital projects.”

Taxation of the development’s 2,000square-foot parking area was included in the analysis presented Monday, which explains the discrepancy with previously presented figures, Svetlichny said.

Upgrading roads and sidewalks is the one category in the general fund category that could have a significant price tag at roughly $1.8 million.

“Staff are continuing to negotiate with the developer to determine the amenity contribution amount to these upgrades,” Johnson and Svetlichny wrote.

Other areas in the general fund category, such as storm water, snow removal and transit, could have no or a negligible impact on municipal finances.

Some aspects of utilities, such as excess demand cost for electricity and increase in direct kilowatt-hour costs and expenses related to water treatment and wastewater treatment plants, could have negative impacts.

However, the potential increase generated by electrical, water and sewer revenues could yield a $145,192 net annual surplus.

Johnson and Svetlichny also reported on aspects of development cost charges that were discussed at a workshop held on Oct. 25.

A DCC is a way to assist local governments in paying for the capital costs of future infrastructure upgrades or a new infrastructure.

As of Dec. 31, 2016, the municipality had DCC reserves totalling $2.9 million.

The proposed development would generate an estimated additional $2.9 million in DCCs, according to Johnson and Svetlichny.

Based on the current DCC bylaw, projects such as upgrading the Trout Creek water system, storm drainage and roads could move ahead, as could the acquisition of new parkland and improving current recreation facilities.

The analysis presented Monday is the last part of the information gathering process started in February, said director of development services Dean Strachan.

The third-party review of the developer’s aquifer and spring protection strategy is slated for presentation at the Dec. 11 council meeting.