Item - 2023.EX10.6

The Executive Committee  

1. Received the report (November 16, 2023) from the Chief Financial Officer and Treasurer for information.

Development charges are collected from new development and redevelopment for the purposes of recovering growth-related capital infrastructure costs. This report provides a statement of the Development Charge Deferred Revenues for the year ended December 31, 2022, as required by the Development Charges Act, 1997 (DC Act).

The City’s financial statements are prepared in accordance with Public Sector Accounting Standards (PSAS).  Under PSAS, development charges are recognized as liabilities called “deferred revenues” on the City's Statement of Financial Position when received and are recognized as earned revenue on the City's Statement of Operations and Accumulated Surplus when the capital expenditures these funds are intended to support are incurred. Use of these deferred revenues is restricted to activities specified in legislation or contractual agreements.

For the fiscal year ended December 31, 2022, the City recognized development charges deferred revenues of $799.0 million and $357.3 million in earned revenue based on capital expenditures. Development charge deferred revenues were allocated interest of $9.0 million based on City Council's allocation policy.  The final development charges deferred revenue balance at December 31, 2022 is $2,713.9 million, and is included in the City's overall deferred revenue balance in the City's audited consolidated financial statements. The 10-Year Capital Plan includes $6,769.0 million in development charge commitments and obligations available through both existing deferred revenue balances and forecast future year development charge revenues.

This report provides a summary of the balances and activity of these development charge deferred revenues, along with the details of the project costs funded from earned revenue, for the 2022 fiscal year. It is important to note, however, that Bill 23, "the More Homes Built Faster Act", is currently estimated to result in a $2.3 billion revenue loss to the City's growth funding tools over a ten-year period (i.e., 2022-2031), including development charges ($2.0 billion) and parkland dedication ($0.3 billion). The most significant impact is the removal of housing service as an eligible development charge service.  The figures are based on available information from the 2022 development charge background study, which included a development forecast of 136,000 housing units over a ten-year period (i.e., 2022-2031).