Dull Name, Big Deal

The Interim Phasing and Financial Plan slows costly sprawl

by Paul Dechene

city-hallSometimes at city hall, the reports with the most opaque titles hide the most far-reaching implications. Take this gem from council’s June 23 meeting: “Interim Phasing and Financial Plan.” Sounds pretty harmless. But in explaining its importance to the gallery, Ward 8 councillor Mike O’Donnell said of it, “This is a big deal and this is big money.”

And he isn’t kidding. This unassuming little plan means the difference between the orderly construction of future municipal infrastructure and potential financial ruin.

In short, the Interim Phasing and Financial Plan increases the fees paid by developers to help cover the cost of infrastructure that will service the city’s newest suburban neighbourhoods. At the same time, it puts construction of several new suburbs on hold temporarily while only allowing a few of the least expensive projects to go ahead.

These changes will be in effect for the next two years as city administration conducts a review of those developer fees — more commonly known as Servicing Agreement Fees (SAFs) — and of how best to phase in new developments.

At the end of the review, a long-term plan will be implemented.

But why the rush to boost revenue and rein in sprawl? Well, despite the fact that city hall doubled Servicing Agreement Fees in 2007 (over fierce opposition from some in the development community), it seems Regina is expanding faster than the city’s finances can handle.

If we continue expanding without boosting fees or phasing in developments, city administration estimates we’ll blow our debt limit and face a one-time seven per cent mill rate increase to cover the shortfall.

Not an appealing prospect.

As such, even the developers who came out to speak about the fee increases they face seemed to accept the broad strokes of what council was doing.

It was some of the details they quibbled over.

For example: representatives from Dream Development (formerly known as Dundee Developments, the builders responsible for Harbour Landing) seemed miffed that their plans for a massive suburban development they’re calling Coopertown would be stalled by two years.

And Stu Niebergall of the Regina & Region Home Builders’ Association raised concerns that increasing SAFs adds a cost to development that will be passed on to home buyers and make housing in Regina more unaffordable.

Ward 3 councillor Shawn Fraser cried foul at this claim.

“Since 2007 till now, house prices in Regina have climbed by $210,000. Only about $9,000 of that is related to increases in Servicing Agreement Fees,” said Fraser. “Definitely, when we hear about affordability — and we should be very concerned with affordability — we should also keep it in perspective that really, even with these quite significant changes we’ve made, it’s a bit of a red herring to say that [Servicing Agreement Fees are] really the cause of the housing prices in Regina.

“It’s simply not true,” added Fraser.

In fact, while Fraser supported the interim plan, he argued that it doesn’t go far enough.

“This isn’t a flying leap in the right direction or anything like that. The Servicing Agreement Fund is still going to take on an additional $30 million in debt in the next two years, taking it from about $20 million in the hole to about $50 million in the hole,” he pointed out.

Regardless, council passed the Interim Phasing and Financial Plan unanimously, and now city administration has two years to consult with industry and come up with a sustainable level of servicing fees and suburban expansion.

2014-06-26