Are proposed fee hikes fair?

Ron Seymour 2008-10-16 Kelowna Courier:

An independent expert has been consulted to review whether the city‘s proposed development cost charges for 2009 are fair. Some in the building industry say that a construction slowdown means that prices for materials such as asphalt, pipe and concrete are below the city‘s currently projected levels. And others believe a softening market will reduce growth and allow some big-ticket infrastructure projects to be delayed, which could also reduce the proposed DCC charges. “Certainly, with the market downturn, we‘d like to see if some projects could be deferred,” Andrew Bruce, vice-president of Renascence Developments Corp., said Wednesday at a city-sponsored meeting on the proposed DCCs. City staff propose to increase DCCs by about 10 per cent next year. The fees are paid by developers to help finance the cost of new or expanded roads, water and sewer lines, and parks throughout the city. The DCCs are set based on what the city expects to pay for construction materials and land purchases. Charges for 2009 have been set, in large part, on what tendered projects were revealing earlier this year.

Since then, however, some developers say, prices have been coming down, and that reduction should be reflected in the city‘s DCCs. “Maybe the prices are dropping, and maybe we shouldn‘t increase the DCCs,” said city works and utilities director John Vos, inviting more up-to-date information from developers and builders. A quantity surveyor, or cost engineer, is reviewing the city‘s projected DCCs to see if they fairly reflect construction rates. A second open house on the proposed DCCs will be held Oct. 21 at City Hall, with council expected to decide in early November whether to approve the higher charges, which would take effect in February. If the higher charges are approved, the builder of a new single-family home in the central area of the city would pay $22,200 in DCCs in 2009, up from $20,300 this year.