Staff Report: Development Cost Charge Bylaw No. 1700 – Update to Roads DCCs

Background

Development Cost Charge (DCC) bylaws require refreshment from time to time in order to review the relevance of the project list with respect to shifting development patterns, completed DCC projects and to reflect current construction costs. A revised Roads DCC Bylaw for 2017 has been prepared for Council review, comment and approval.

Development Cost Charges (DCC’s) are a way for the City to collect funds to improve infrastructure that will support projected development over a specified time horizon, under the provisions of the Local Government Act. The concept of “Benefiter pays” is the key component of this legislation: Infrastructure costs should be paid by those who will use and benefit from the construction of the works.

Development Cost Charges may be collected by the City for improvements to roads, storm drainage, parkland acquisition, and park improvements. DCC’s may be collected as a condition of subdivision for single family and duplex development, and at building permit for multifamily, commercial, institutional and industrial development. Similarly, the Capital Regional District (CRD) also has DCC’s and the School District applies School Site Acquisition charges, permitted under a different section of the Act.

The City can use the funds collected through a DCC program to pay for improvements identified in the same DCC program, alternatively the works can be constructed by others as part of their development process in return for credit toward DCCs payable.

The last time a full review was completed of the City’s DCC program was in 2012, however three small amendments occurred to the 2012 bylaw since that time. The DCC program should be refreshed every 5 years to ensure that the projects are still relevant and that costs are appropriate.

Determining Road Development Cost Charges

In January 2016 WATT Consulting Group completed the “City of Langford Transportation Model Update”. This was the first comprehensive computer model update since 2006. The work completed to support the 2012 Road DCC bylaw update did not include such a comprehensive computer model update as this 2016 model update did.

The 2016 Transportation Model included a review of 2015 Existing Road Network, 2015 Modified Road Network and a projection out to the year 2040 (25 year timeframe). The 2016 model update included completion of several major road network projects in the City of Langford and therefore is considered to be the most accurate current projection of road network requirements for the City. The 2016 computer model update included the following projects which are new from the last time the model was generated:

1. Leigh Road Interchange (LRI) – the LRI was opened as a three-legged interchange in June 2013 and the last off-ramp was opened in December 2015. The LRI project included closure of the Goldstream Avenue exit from the TCH and closure of Spencer Road at the TCH;
2. Re-Alignment of the Goldstream Avenue at Leigh Road intersection – this was completed in September 2016;
3. West Shore Parkway – the West Shore Parkway completion project is 3.3km of collector road connecting the Trans Canada Highway (Highway 1) south across the railway tracks past Langford Parkway and ending at Sooke Road (Highway 14). The West Shore Parkway began construction in November 2015 and will be completed by September 2017;
4. Bear Mountain Parkway – the final 3.3km of the Bear Mountain Parkway began construction in October 2016 and will be completed in late summer/early Fall of 2017;
5. McCallum Road Connector – the McCallum Road connector was opened in March 2016 connecting the Millstream Interchange to the Leigh Road Interchange in an east/west direction on the north side of the TCH; and
6. Leigh Road to Langford Parkway – the 2016 transportation model update assumed that Leigh Road would connect over the railway tracks to Langford Parkway. Leigh Road was extended south from Dunford Avenue to Henry Eng Place in the summer of 2016. The last remaining section, crossing over the railway tracks, is likely to be completed in the next 1 to 5 years.

The 2016 transportation model update did not include construction of an additional southbound left turn lane on the Millstream overpass, however since completion of that study in January 2016, the City has started detailed design of the southbound left turn lane and anticipates constructing the left turn lane in the Summer of 2017.

The 2016 City of Langford Transportation Model Update, prepared by WATT, also provided a review of the major transportation networks within the City and includes recommendations for upgrades and linkages to improve capacity and traffic flows. The work is proposed over a 25 year horizon to full build out in 2040 and in accordance with the Official Community Plan (OCP). The study indicated that by 2040 additional lanes are required on Leigh Road at the Goldstream Avenue intersection and on West Shore Parkway between the rail crossing and Langford Parkway. These requirements are reflected in the proposed 2017 Road Development Cost Charge project list.

Downtown Langford Network Assessment

The City retained WATT to provide advice on a Downtown Langford Network Assessment which was completed in May 2016. The network plan looked at the road network within the downtown core bounded within the areas:

• South of the Trans Canada Highway;
• East of Jacklin Road;
• West of Veterans Memorial Parkway; and
• North of Langford Parkway.

The results of the network study and following discussions indicated that the following road projects would be regionally benefitting when constructed:

1. Extending Larkhall Road from its existing location between Veterans Memorial Parkway and Claude Road to continue west to meet Peatt Road;
2. Reconstructing a proper roundabout on Peatt Road at Brock Avenue; and
3. Constructing a roundabout on Peatt Road at Hockley, leaving the signal lights in place on Peatt Road at Goldstream Avenue which was originally proposed as a roundabout location.

Road DCC Projects 2012 versus 2017

The 2012 program contained $77M in road DCC projects, netted to $67M in costs. Road projects included in a DCC bylaw must be regionally benefitting, so are typically major collector roads (eg. Langford Parkway, West Shore Parkway, Millstream Road etc.).

Several of the 2012 projects are now complete or reduced and include:

1. Leigh Road Interchange Southwest Quadrant Ramp – Completed in December 2015
2. West Shore Parkway – not completed but now funded significantly by a New Building Canada Grant so the cost to the DCC program has been corrected
3. McCallum Road Connector – Completed in March 2016. There is some carry over in the 2017 DCC program for funds allocated to that construction, but the cost has been reduced
4. Leigh Road at Goldstream Avenue Intersection – Completed in September 2016
5. Leigh Road from Goldstream South to Dunford Avenue – Completed in Summer 2015. There is some carry over for future frontage improvements on the west side of Leigh Road
6. Leigh Road from Dunford to Henry Eng Place – Completed in Fall of 2016. There is some carry over for credit allowed to Westhills for completing this project

For the proposed 2017 program staff have included all 2012 projects that have carry over work and have added in some new regionally benefitting roads for a total value of $74M netted to $66M. The new roads added to the 2017 program include:

1. McCallum at Reddington – The City had an operational and safety review done of this roundabout area and there are recommendations up to $500K in improvements for this area;
2. Florence Lake Road – with the high volumes of traffic on the north side of the TCH, Florence Lake Road has increased in volume. It is also the only other connection between the Millstream Interchange and Leigh Road interchange areas. This road requires upgrading. A cost of $739K has been assigned to lane and pedestrian/cycling upgrades.
3. Goldstream Business Park Tech Road - In 2012 when Council considered the 2012 program they chose to include a future Tech Park Road leading from Leigh Road (north of the Ambulance Station) up to a future business park to encourage job creation. Staff are proposing to keep this Tech Road in the 2017 program for the same reasons.
4. Larkhall Extension – The City retained WATT consulting in 2016 to undertake an assessment of our downtown network. One of the improvements suggested was to connect existing Larkhall which extends from Veterans Memorial Parkway to Claude Road, all the way west to Peatt Road. This has been added to the program at a value of $800K which includes some property that would be required to complete this to its ultimate configuration.
5. Peatt Road – Two roundabouts are included in the program and include one at Brock Avenue to replace the existing traffic button and one at Hockley Avenue. The same downtown network report prepared by WATT was used to ascertain that the signal can stay on Peatt at Goldstream and that these two roundabouts could be added.
6. Irwin Road – this road is being connected from its current end point just east of Creek Side Trail as part of the West Shore Parkway completion project. Irwin Road will be extended through to connect to West Shore Parkway before the railway crossing at Humpback Road closes and the new railway crossing at the West Shore Parkway is opened. In addition to the extension works, the road needs to be widened in some sections. A cost of $833,994 has been allocated to this project.
7. Sooke Road at Glen Lake Road/Happy Valley Road – staff have allowed for realignment of this intersection to redirect Glen Lake Road to Sooke Road to meet Sooke Road at Happy Valley Road. The cost of this project is estimated at $1.8M
8. Salem Road – the City has a grant application in with the government to extend sewer along a future Salem Road extension between Sooke Road and Luxton Road. Salem Road would also extend on this same corridor. This road would provide large improvements to the regional traffic flow allowing traffic to travel in an east/west direction from Sooke Road to Luxton Road and on to Happy Valley and Latoria Roads at the east and West Shore Parkway at the west. A project cost of $4.7M has been allocated to this project.

Road project construction costs were obtained from engineers estimates where available (typically the engineers of record for adjacent development sites) or were costed by the City Engineer and proofed by a consulting engineer retained by the City.

To provide a baseline of information for the DCC program, the number of vehicular trips in the peak hour of travel for specific types of development is calculated. The cost of the proposed road network improvements are calculated and tallied, then divided by the number of peak hour trips to create a “unit DCC”. This Unit DCC is then multiplied by the peak trip for each category of development to determine the DCC payable. The development categories include:

• Single Family Residential with suites
• Small lot and attached residential with no suites
• Residential apartment
• Commercial
• Institutional (schools)
• Industrial

In each category listed above either the total anticipated units or total estimated building area in m2 is used in the DCC rate calculation.

Single Family Residential >300 m2/Small lot <300m2 and attached residential with no suites and Residential Apartment/Condos: The total unites in each of these categories were identical to those units used in the 2016 Transportation Update Report to be consistent with the traffic report.

The proposed road DCC rates for each class of development are provided in Schedule A, Table 1(A). A map showing the location of the proposed projects can be found in Schedule B and a list of proposed DCC projects and preliminary cost estimates is provided in Schedule C.

Proposed Road DCC Rates (Schedule A, Table 1(A))

In summary:

1. All residential rates went down between 10 and 19%. The most notable being the multi-family which is also one of the most affordable styles of residences in the City;
2. The commercial rate increased by 18%. Using a building such as a grocery store at 52,700 sq ft or 4900m2, this cost difference would be $232K increased to $273K or $41,000. Staff do not see a major impact on commercial development with this rate because the bulk of such development sites already have or will have DCC credits to levy against the charges because they are constructing Road DCC projects as well.
3. The industrial rate is increasing 24% however buildings are typically relatively small on industrial sites. Using the recently erected AMJ Campbell building on West Shore Parkway it was 854m2 and paid $5,397 in Road DCCs. At the proposed new rate the Road DCC costs would be $6,806. Even a building double that size would still pay under $13,000.

Note that the industrial vehicle trip rate has been set lower than a typical vehicle trip rate to keep Road DCC charges artificially lower in the commercial and industrial categories to encourage economic growth in Langford.

In closing staff feel that these proposed new rates are palatable and acceptable in all categories of charges.

Road DCC Area

The 2017 Road DCC bylaw will apply to all of Langford with the exception of the Skirt Mountain and Bear Mountain properties. Skirt Mountain and Bear Mountain properties are included in a Local Service Area (LSA) and are therefore excluded from the DCC program (properties and projects cannot be included in both programs). Schedule D depicts the lands contributing to the 2017 Road DCC program.

Road DCC Projects

The projects included in the DCC program have been recommended by the transportation study, which notes connectivity and improvements to intersections as key elements for future capacity. Staff worked extensively with the traffic consultants to experiment with road widths, configurations and levels of service at various intersections to create a plan for the future that will improve the network while keeping costs and impacts to the environment at a minimum.

One project that is not specifically mentioned in the transportation study is the “Tech Road” referred to as Project #10 on Schedule C, the Road DCC project map. This Tech Road extends west from Leigh Road and up into the plateau area of land south of the Trans Canada Highway and west of Leigh Road. This area is identified in the Official Community Plan (OCP) as an employment center. Council may wish to encourage technology based industry by providing credits for the road that will service that development. Including that project in the DCC programs provides a simple mechanism for this type of incentive at no cost to the taxpayer.

Determining Stormwater Development Cost Charges

The City has identified South Langford as an area that requires intensive storm drainage infrastructure. A report prepared by the Focus Corporation in 2007 includes preliminary design and costing for a storm drainage system that will improve flood conditions in the area. An additional assessment was undertaken by KWL to update the original 2007 study and support the proposed projects included in the 2012 Storm DCC program proposed as part of this staff report (KWL, March 2012).

The City retained KWL (KWL Technical Memorandum January 11, 2017) to review the 2012 Stormwater DCC program and produce a report that:

• Summarized the improvements to date that have resulted from completion of stormwater DCC projects;
• Review the remaining projects to see which ones might no longer be required; and
• Make any recommendations for any additional Stormwater DCC projects.

Re-zonings in the South Langford impose a storm levy based on square metres of development to be paid at the time of subdivision or building permit.

A list of proposed DCC projects is provided in Schedule E for Bylaw 1700.

Council may wish to note that storm drainage (and other) DCC funds can only be used for capacity improvement, not maintenance.

Stormwater DCC Area

Because no new works are recommended for North Langford, no DCC is proposed for that area at this time. Should any new works come to light as a result of new development in North Langford, those works could be required as a condition of re-zoning or a new DCC program implemented for the area at that time. Council may also wish to revisit the storm drainage plans and refresh the DCC bylaw every 5 years to ensure that the system will continue to meet the needs of the community. A Map showing contributing lands for the proposed 2017 Storm DCC program is attached in Schedule F.

Stormwater DCC Projects 2012 versus 2017

The 2012 Stormwater DCC program contained thirty-two (32) ponds, stormwater drains and channel improvements. Note the 2012 program list had 33 numbers because a blank line was accidentally numbered. The addresses and locations of the ponds in the 2012 program were approximate and since then some ponds were relocated very slightly based on groundtruthing information used to situate the ponds in place. Since 2012 the following stormwater pond projects were completed:

• Project 1 – Willing Pond
• Project 3 – 815-879 Latoria (constructed at 835 Latoria)
• Project 4 – listed as 3572-3582 Latoria (should have been a Happy Valley Road address, has been constructed)
• Project 5 – Flatman Pond (constructed as Katie’s Pond)
• Project 10 – 910 Latoria (constructed at 935 Latoria)
• Project 12 – 3622-3635 Happy Valley Road (constructed at 3620 Happy Valley Road)
• Project 14 – 774-760 Latoria
• Project 22 – Happy Valley at Marwood

Also completed were these channel improvements:

• Project 15 – Bilston Creek at Wild Ridge Way
• Project 16 – Bilston Creek through the Rod & Gun property

In all the City has successfully:

• Completed 40% of the original 2012 Stormwater DCC program by storage volume
• Provided 30,000 m3 of additional stormwater storage
• Lowered the 200 Year Peak Flows (m3/s) as much as 32.5% (Flatman Pond area) and an average of 10% in the program area or 0.1 to 0.3m
• Lowered peak flows at Bilston Creek near Wild Ridge Way by 0.53m3/s, or 0.16m in height

In addition to the completed projects, City staff and KWL worked together to determine if any projects are no longer required or if new information had resulted in the past five years to suggest a project is not able to be built. The following projects are proposed to be removed from the 2012 program for the new 2017 program:

• Project 6 (Pond) – 1021 Englewood – this project is not attainable due to ambient groundwater levels
• Project 9 (Pond) - Wendey Drive – located on private strata owned property, with limited storage
• Project 20 (Channel Improvement) – Galloping Goose north of Englewood, ditch enclosure is not recommended due to surrounding overland flows
• Project 21 (Channel Improvement) – Happy Valley (Marwood to Walfred), a portion of this has already been constructed on Happy Valley Road, the remaining drain is not needed

Of the thirty-two 2012 projects, fifteen (15) are either completed or can be removed for seventeen (17) physical projects. The #18 project is the ongoing Stormwater Management Plan upkeep. The 2012 net DCC eligible program value was $6,642,341 (the value after grant funds and benefit to existing users is removed).

The new proposed 2017 net DCC eligible program value is $4,268,816.

Stakeholder Input

The Best Practices Guide provided by the Ministry of Community, Sport and Cultural Development recommends stakeholder input to the proposed bylaws to ensure that there will be no negative effect to development and affordable housing.

An Ad Hoc Committee comprised of staff and representatives of the West Shore Developers’ Association have had the opportunity to review and comment on the proposed bylaw and has officially endorsed the program.

Collection of DCCs

Development Cost Charges are collected on a per lot basis at the time of subdivision for Single Family projects, at building permit on a per unit basis for Multi Family projects and per square metre of gross building area for Commercial, Industrial and Institutional projects such as schools.

DCC Credit

If a developer or land owner constructs works as a condition of development approval that form part of the DCC projects list, they may be eligible for DCC credit up to the dollar value of DCC’s payable for that particular project.

The credit may be in the form of charges not payable at the time of building permit, or in the form of a rebate. The City created a Road and Storm Drainage DCC Credit Policy (POL-0003-ENG) in 2012 that provides a guide to staff and developers with respect to enabling DCC credits. The policy was recently amended to address instances of developer bankruptcy.

Financial Implications

The intent of DCC program is that improvements required to support future development are paid for by that development. Any benefit to existing users is expressed as a percentage of the cost of the works and deducted from the total cost of the projects.

The proposed Road DCC program includes maintaining the cost to existing users of 1% and for the Storm DCC program a 10% assist factor. Both factors are the same as the 2012 program.

Council must approve the projected yearly taxpayer contribution and include that in the municipal budget. The DCC program as proposed will require a yearly taxpayer contribution of $33,498.98 in the Road DCC program and $32,757 in the Stormwater DCC program. This is consistent with the 5 year financial plan.

Legal Implications

The proposed DCC bylaw has been reviewed and vetted by the solicitors for the City. The bylaw requires approval by the Ministry of Community, Sport and Cultural Development prior to bylaw adoption.

Options

That Council:

1. Give the first three readings to the City of Langford Development cost Charge Bylaw No. 1700, 2017;
   AND
2. Repeal District of Langford Development Cost Charge Bylaw No. 26,1993;
   AND
3. Direct Staff to refresh the transportation study and Roads DCC bylaw every 5 years;
   AND
4. Support the reduced Commercial and Industrial Road DCC rates in order to encourage economic growth and job creation;
   AND
5. Include the Tech Park Road Project #10 in the list of proposed projects in order to encourage economic growth and job creation;

OR

6. That Council decline to pursue changes to the Roads and Stormwater DCC bylaw at this time.

Respectfully Submitted

Submitted by:
Michelle Mahovlich, P.Eng. Director of Engineering

Concurrence:
Matthew Baldwin, MCIP, RPP Director of Planning

Concurrence:
Mike Leskiw, Parks and Recreation Manager

Concurrence:
Steve Ternent, Director of Finance

Concurrence:
Jim Bowden, Chief Administrative Officer

:mm

Attachment: Bylaw 1700