City reviews development charges

Wolf Depner - Penticton Western News Published: May 13, 2009

Some development fees could rise, while others could fall, as Penticton council has directed staff to review costs. Council issued this direction after considering several recommendations from the city's development services advisory committee. The recommendations included among others a call to review development cost charges, less than two years after council raised those same rates during what has turned out to be the apex of the development boom preceding the current downturn. Development cost charges paid by developers help finance necessary infrastructure such as roads and sewers and rose sharply last year, just before the start of the current economic downturn. In fact, some local business leaders worried as early as January 2008 that the city would be raising the cost of doing business just as the economy was starting to head south. With that in mind, now it is time to review the true cost of construction, said Coun. Dan Albas, who pushed for the review. While he acknowledged the short time period between reviews, he said that the city needs timely information in facilitating development. Coun. John Vassilaki disagreed with the recommendation in voting against the review along with Coun. Garry Litke. Everybody already knows that development (and the cost of construction) has gone down, said Vassilaki, suggesting that the city should not wait until receiving the outcome of the review to lower development cost charges. "I'm dead-set against the rates that they are now," he said. Vassilaki, for the record, approved the current rates last year as a member of the previous council. Only then-councillor-now-turned-mayor Dan Ashton had opposed the current rates at the conclusion of the last review. The review now underway is expected to take up to two months. A full, comprehensive review would take up to eight months.

Council also asked staff to bring forward a list of possible incentives to help development. Staff are also looking into raising the cost of building permits by up to 10 per cent. That last instruction raised some questions from some members of council about the city's consistency. Coun. Andrew Jakubeit wondered why the city is potentially looking at cutting some development costs, while increasing others. Coun. Mike Pearce said the city is being consistent. If certain fees are too low, the city will raise them; if they are too high, the city will cut them, he said.