Council to vote on development credit program
New policy would give refunds or credits for developer-funded, growth-related infrastructure projects in Cambridge
CAMBRIDGE — Sparked through a request by developers in west Cambridge, city council will vote on June 2 during a special emergency council meeting to allow developers to enter into agreements with the city to construct growthrelated infrastructure in advance of the city’s capital program.
Called the Credit for Service Agreement Policy, the city would not initially have to fund or debt-finance projects. Instead, developers’ costs are recovered through development charge (DC) credits or refunds, according to a report coming to council.
The report also states if there are not sufficient development charge credits to cover the cost owing, refunds will be offered for the remaining amount. The refund would begin the year the capital project would have been constructed by the city.
“In order to facilitate development within the Cambridge west, southeast Galt and north Cambridge areas of the city, there are numerous major infrastructure projects required. Many of these projects are funded in part or wholly by city DC,” the report states.
“To allow developers to move ahead with design and construction and enter cost recovery or front-ending agreements, the city has prepared a policy for Credit for Service agreements.”
The policy — similar ones are in place in Kitchener, Markham and York Region — recommends each request to enter into a Credit for Service Agreement Policy be approved by council.
A fee will be charged under the city’s municipal fees and charges bylaw to recover the costs associated with the preparation of agreements made through the policy and a deposit will be provided by the developer and drawn upon to recover city costs associated with the administration of the agreement.
It is also recommended the tendering of construction is completed by the developer following the approval of the tendering package by the city and following the city’s procurement and budget control bylaws.
The policy was spawned as development identified in the city’s 10-year capital forecast doesn’t always align with developers’ timelines, despite reviews of project timelines on a yearly basis, said the report.
Front-ending the agreements with developers under the Credit for Service Agreement Policy will allow projects to get underway with the construction of roads, sanitary sewer, water main and stormwater management facilities, the report states. The projects are normally funded primarily through development charge reserve funds.
According to the report, at this time, the development charge reserve funds do not contain sufficient funds to go forward on the developers’ timelines.
“To meet developers’ identified timelines, the city would be required to debt fund most of the projects, however, there are limits to the amount of debt the city is able and/or willing to take on,” the report states, adding projects included in the forecast are based on anticipated available funding.
“Waiting for sufficient DCs (development charges) to be collected to fully fund the projects through the DC reserve funds may delay projects in the capital forecast. It is also possible that the DC reserve funds may never have sufficient funds, as without this key infrastructure in place, development won’t occur and DCs won’t be collected.”
The report noted cost-recovery agreements with developers have occurred in the past and each had a different look, the new policy would allow consistency of the agreements going forward.
The policy will be reviewed a year after approved by council.