Ask Pat: Smoke and edibles.

DB asked—

The bylaw regarding Cannabis Regulations No. 8043, 2018 has a section saying retail shops cannot sell edible cannabis. I live in an apartment in New West that has a strict no smoking/vaping policy (which I am very happy about). Edible Cannabis is a work around for situations like mine – unless it will be legal to smoke on the streets (which I am assuming is not the case). I understand it has been adopted but, I still wanted to voice my opinion on it.

That was not strictly in the form of a question. But I’ll take a stab at it.

We are one day away from the legalization if cannabis in Canada, and all three levels of government have been scrambling to get a regulatory regime together. It is a challenge – this an unprecedented change in the regulation of a psychotropic drug. From a local government side, we needed to put together zoning and business bylaws to support the operation of the stores that coincide with the model that the province put together. We also have to think about the inevitable nuisance complaints we are going to receive around the legalization of what is, for all its alleged benefits or harms, a pretty stinky substance.

On edibles, our Bylaw is designed to parallel the federal regulations. There will be no legal edibles sold in Canada in 2018. I suspect this is related to a myriad of packaging and labeling concerns, and addressing the risk to children when sweets and drinks are made containing the psychoactive elements found in cannabis. There is some suggestion that they will address this in 2019, but until then, dried product intended for smoking is the only legal form of recreational cannabis.

Your point about Strata rules prohibiting the smoking of cannabis is definitely a concern. With the existing prohibitions around public smoking – no smoking in parks, in bus stops, 7.5m from the door to any public building, or inside any business or public building – you are right that there will be limited places where it is legal to smoke cannabis. Unlike alcohol, you will not be able to go to a business (like a pub or coffee shop) to smoke, but you will be able (as best I can tell) to smoke on the sidewalk or the street, as long as you are not within 7.5m of a door or air intake. Still, if you are restricted from smoking at home because of strata or rental rules, your opportunities are really limited. This creates a fundamental unfairness – this completely legal product will be inaccessible to some.

I honestly don’t know how to address this and remain compliant with the various laws at all three levels of government. If you have the skills, I suppose you could bake your own edibles using the dried product meant for smoking (I don’t think that would strictly be illegal, as long as you don’t sell the baked goods). Or you can wait until the federal government gets the edibles part figured out. The transition to this new regime is going to be challenging for several reasons.

As a city, we tried our best to put together a comprehensive set of regulations. We had a few workshops with Council and staff, and heard from the public and stakeholders in the industry. After some pretty challenging debates around what the limits should be, we settled on what will no doubt be an imperfect regime, but we will learn as we go along. We will be ready to accept applications for cannabis retailers as soon as legalization occurs on Wednesday, but as the process to get a store approved and operating may still take several months, don’t expect to be buying cannabis in New West until early in 2019.

Update: Time between the legalization of cannabis and the first e-mail complaint received by Mayor and Council abut having to smell the smoke in a public place: 16 hours.  

Ask Pat: Dark Fibre

Jenni asks—

Will the dark fibre network also be connected to older buildings or just new builds?

Short answer is yes, the BridgeNet fibre network can be connected to old buildings and to new builds.

The City of New Westminster is investing in a so-called “dark fibre” network. Hardly as ominous as it sounds, this means we are installing conduits in the ground under our roads, and are putting optical fibre in those conduits. We are not putting light through that fibre (hence the “dark” moniker), but are leasing the rights to light up the fibre to Internet Service Companies (ISPs). We invest in putting fibre in the ground, they pay us to use it. They then sell you (be you a resident or a business) the data connections that are made available. I wrote a little more about it a couple of years ago here. 

The end result for residents and businesses in New Westminster is that they can go to one of the (now 7) ISPs who are leasing BridgeNet fibre and get higher speed internet service than the Big Telecoms are willing to offer in New Westminster. This increase in competition also means your internet (and TV and phone) service may be offered by these ISPs at more competitive rates. Faster internet for less money: that is the goal.

Of course, there are devils in details. We are currently still installing fibre, and it will be a few years yet until all of the major development corridors throughout the city are connected. The “last yard” gap between the fibre and your computer mean that it is multi-unit buildings where the ISPs are concentrating their energy right now in getting hooked up. We have also been working with ISPs to provide specific boutique services to different business sectors, such as higher-cost service to tech businesses that need a really big pipe to move a lot of data, and are willing to pay for it.

There are currently no plans that I am aware of to bring fibre from the BridgeNet Network to single detached home neighbourhoods. The economics are just not there for the ISPs to make that service viable, though there are some interesting delivery models around line-of-sight over-the-air delivery that may make the datarate/cost calculations work out for tat type of service eventually. However, there is nothing preventing older multi-unit buildings from working with one or more of the ISPs to put a junction box in their telecom room, and making the service from that ISP available to their residents or business owners.

Again, the Cit’y role here is to provide the fibre to ISPs and charge them for its use, when it comes to providing retail service, you are best to contact the ISPs directly (or through your Strata Council or Building Management Company).

Ask Pat: Two projects

In the spirit of getting caught up, Here are two Ask Pats with similar answers: “I don’t know”.

mmmmm beer. asks—

I appreciate the transparency your blog offers. I just have a quick question. What ever happened to the Craft Beer Market that was supposed to go in at the New West Station. Is that still moving forward?

Shaji asks—

Firstly, thank you for getting back to me on my question about Frankie G’s 😊
Secondly, there are many of us residents at the Peninsula and Port Royal in general wanting to inquire about the plans for the Eastern Neighbourhood Node. I know there were some extensive discussions and planning sessions between the City and Platform Properties. We also have noticed that some ground preparation work has started. Any updates that you can share on what work has started, what are the prospects and what are the timelines for this project. Thanks 😊

Yes, the answer to both of these questions is “I don’t know”.

The Craft Beer Market was a proposal that came to Council for a Development Permit back in July of 2016, and was proposed for the empty lot across from the Anvil Centre at Eighth and Columbia. You can read the report starting on page 348 here. It was brought to Council as a Report for Information, and the next steps were to be Design Panel review and some public consultation, then staff would bring a Development Permit bylaw to us for approval or rejection. I remember the conversation about the proposal being generally positive (see the Minutes of that meeting, Page 13 here), but we have not, in my recollection, seen any further reports.

The Eastern Neighborhood Node that would connect Port Royal to the rest of Queensborough with a mix of residential and commercial property has been the subject of several meetings. The most exciting part of the proposal (and the part that led to some discussions around the layout of the site ans stage of development) was the allocation of some 50,000 square feet of neighbourhood-serving commercial. This would bring (it is hoped) a small grocery store a some basic services to the booming Port Royal community. There would be some land assembly required, as (again, to the best of my knowledge), the developer does not own all of the land required to make the development work, and some pretty significant utility and drainage engineering needs to be done to support the development.

Both of these speak to how complicated development can sometimes be, and to the fact that Council is not directly involved in some of what makes development happen or not happen in the community. We can, obviously, say “no” to a development proposal that requires variances or zoning changes, but once we say “yes” to a development we really can’t force the developer to build. Even the “yes” we give a developer does not typically contain a timeline to completion. As plans are developed, construction costs are calculated, compromises are negotiated, and market forces are navigated, sometimes the math ends up not working out for the proposal we see at Council, and it never happens. Commonly, those things occur in a way that Council would never see. If there is no decision for us to make, no plan or change of plans for us to approve, we are most likely in the dark about the details of what is holding the situation up.

Both of those proposals have some very public-facing companies involved. They may be able to answer your questions better than I can. As a general principle, I think getting retail happening on the eastern end of Queensborough and that empty lot at Eighth and Columbia activated would be great things for the City, and for our residents. I don’t know how I can make either happen faster than the landowner plans to invest. I can tell you that there is no action that I know of that Council has taken to slow down either proposal.

Ask Pat: Bent Court

I have been tardy on Ask Pats. I have this other project going on, and have taken the Ask Pat thing analogue a bit to reach more people. However, there are a few in the queue here, and I am going to spend a bit of my Thanksgiving weekend trying to get caught up. Enjoy!

Chris asked—

Hello,

In an archived memo back in 2016 you posted this regarding the future study of Bent Court.

Bent Court: This area is interesting, a mixed residential and commercial district that is zoned for high-rises, although it is unlikely that anyone would build to that scale here. Staff is recommending a special approach here that can incentivize the preservation of the heritage homes, whether they be used for residential or commercial.

Can you help clarify why it is unlikely that ” anyone would build to that scale here”

Bent Court is a bit of an anomaly. The comment you hearken back to was part of the OCP discussions, where we recognized a few areas in the city that didn’t fit into a bigger area-wide picture very well. The West End and Massey Victory Heights are pretty internally homogeneous, but areas like Lower Twelfth Street and Bent Court are not easily defined, nor is it clear what land use will be most successful there.

Bent Court is mostly a collection of heritage-aged houses, many of them converted to some sort of commercial use. They are immediately adjacent to the uptown commercial area, but also serve as a buffer to the residential areas of Brow of the Hill. There is currently one project being (slowly) built on this site where a heritage house is bring preserved and a 6-story residential building is being built. Even they project caused us some challenges, as determining what a full compliment of parking should be for an area like this that is walkable, but not that close to SkyTrain is a difficult estimate. Street parking can sometimes be at a premium, but many of the apartment buildings nearby have largely underutilized parking. Alas… parking…

My thought in that statement about building to full high-density at Bent Court (in C-3 Zoning, this means Floor Space Ratio of over 5, mixed-use commercial at grade, residential above) was my own feeling that the economics and difficulty of assembling land to make it happen make it unlikely in the current market. Each of the lots is worth more than $1 Million now, to build to the scale of the adjacent mixed-use towers, one would have to assemble a dozen properties. Some (or most) of these properties have some potential heritage value (which adds some uncertainty to the approval process), and are currently returning commercial lease rates that make them economically viable as they are.

That said, there is a lot of development going on right now across the region, and I am not a land economist, so I may not be reading the market well. Not long after I wrote that statement, a real estate company put signs up suggesting land assembly and high rise development are viable options. That doesn’t mean it is going to happen, nor has there been an application for any kind of rezoning or development permit arrive at Council, nor is it clear how staff, Council, or the community would approach such an application. A Bent Court Area Study is planned for 2019 as part of the ongoing OCP Implementation Plan, and this will provide a little more robust economic analysis than my speculations above. Stay tuned, because there will no doubt be opportunities for community input at that time.

I could imagine Bent Court as a pretty special place. Co-op ownership, preserve the heritage houses, convert them to live/work units where artists can set up studio space and live on their studios, add a few food and drink opportunities and some clever marketing, and it could become a unique mini-artisan village of regional importance. However, one doesn’t have to be a land economist to recognize at a million dollars a lot, it would be neigh impossible to make this work unless one had small fortune to dig into… any patrons out there?

ASK PAT: Small trees and Beg Buttons

neil21 asks—

Howdy. Two questions having just moved here from Vancouver’s West End.

1. Why are the street trees so short? Is it just time (but I thought this city was older) or the species? The streets are really hot without that shade.

2. At 6th and Carnarvon, pedestrians don’t get to cross without pressing the button. Even if pedestrians are crossing the same way on the other side.
2b. Also why aren’t your beg buttons those buttonless ones like you have for the bikes? Those are better.
2c. Also why does 6th and C have beg buttons at all? Just let peds cross with green cars always.

Welcome to New West. I would love to hear more about your decision to move here from our western suburb, and your experiences since making the shift. The theme of my answers to the above will be “A City is always a work in progress”. We are now headed the right direction, but have more work to do.

1: (caveat: I’m not an arbourist, but I have a couple of suppositions) First, the trees may be younger than you are used to. The City of New Westminster, with the exception of Queens Park (the neighbourhood) and a few parts of Glenbrooke North and Sapperton, really lost the plot on street trees a few decades ago. It may have been the fashion of the time, the cost of development, a mandate by the electrical utility, or just short-term thinking, but our urban forest was cut back in a devastating way. Our canopy cover City-wide is less than 18%, which is similar to Vancouver, but low compared to much of North America. It was only a few years ago when New Westminster introduced a new Urban Forest Management Strategy, and started to a) proactively protect the trees we have; and b) ramp up plans to plant trees and bring back more canopy cover. Unfortunately, the ultimate results of this will not be seen for another decade or two. That said, although the best time to plant a tree is 20 years ago, the second best time is today, and we are getting on it.

That said, it is also possible that trees are smaller above ground because they are smaller underground. Trees need healthy root systems to prosper, and our 150-year-old streets and sidewalks and utility corridors mean that the area of healthy nutrient-rich and porous soil around many of our newer trees is limited. This may mean staff decided to plant diminutive tree species to respect the available growing area, or it may be that the lack of soil is keeping the tree from meeting its ultimate size. There is a bunch of new engineering practice around creating “soil cells” as part of new street tree installations, but see last paragraph about 20 years.

2: (Mostly) because the City is old, doesn’t have endless money, and until recently, it wasn’t a priority.

Beg Buttons (the pejorative name given by pedestrian advocates to buttons that must be pushed by pedestrians in order for the red hand to become the white man at light-controlled intersections when the cars get a green light) were all the rage at one time, because everybody important drove, and pedestrians were just another thing that needed to be managed within car spaces to get traffic moving.

Our new Master Transportation Plan, however, prioritizes pedestrians for the first time, so we are working on changing these things. That said, Beg Buttons can still serve a purpose for system-wide traffic management in more pedestrian-oriented urban areas. They can assure that crossing times for wider roads are adequate for slower pedestrians when they are present, and not too long when they are not. They also make the audible crossing signal for the hearing impaired work better. As always, the devil is in the details.

In some places, we still have older Beg Buttons (even old-style small-button ones in place of the larger panel-type ones) in places where more modern treatments would be appropriate. These are being replaced as budgets allow on a priority basis. Every year, Transportation staff do a review of all  identified crossing improvement needs, place some draft priorities on them based on safety, potential to dovetail with bigger projects or adjacent development, and other factors. They pass that priority list through the Advisory Committee for Transit, Bicycles and Pedestrians, the Access Ability Advisory Committee, and the Neighbourhood Transportation Advisory Committee, then spend their budget making the changes. Sometimes that means curb bulges, marked cross walks, lighting changes or updating the signal operations. All of these things are ridiculously expensive, hence the need to set priorities.

In some places, the Beg Buttons will remain (although I hope we will eventually migrate all to the more accessible panel-type ones) because they are a useful tool. If well applied, they make crossing safer for pedestrians, especially in lower-pedestrian-traffic areas. However, when they are not well applied (as you point out a 6th and Carnarvon, and I can point out a few more in the City), they create an impression to pedestrians that are not a priority in our public spaces, and sometimes go so far as to create inconvenient barriers to pedestrians. Perhaps a good example is all of the crossings along Columbia Street in Downtown, where there is an almost constant east-west flow of pedestrians, and pedestrians should see the white walking guy every time cars get a green light.

Ask Pat: Permit times

Someone asked—

I am a rental tenant at [redacted to protect privacy – a downtown Strata building]. I have heard our Strata is considering dissolution & sale of our building to developers. How long does a demolition process take per the City of New West’s permit(s) process etc.?

This is really not a question I can answer with certainty, because I am not involved with these kind of front-counter operations. The short version of your answer is that a Demolition Permit can probably take less than a day or several months (depending on things like the need for hazardous material surveys, Environmental Site Assessments, and safe disconnection from City utilities) but it isn’t the Demolition Permit timing that would necessarily be a limiting factor here.

It sounds like the feeling in your building is that the current building will be demolished and a replacement building built. I suggest that, if this was the case, a new owner would not apply to demolish the building until they had a certainty that they would be permitted to build a replacement on the site. That would likely require a Development Permit, and may even require a Rezoning or an Official Community Plan amendment, depending on what the owner wishes to build. The more of these you add, the more time it takes to get through the process. Those processes also include extensive public consultation, and would likely result in a Public Hearing. All told, these processes can take a year or more. The more complex the project and the more it varies from existing land use, the more complicated and time-consuming these applications go. It is also possible that a developer’s proposal will not be found acceptable by City Policy or by whim of Council, so the wait an be literally endless.

That said, I have no idea what process your building will have to go through, nor do I know what the new owner would plan to build. No application for your address has come to City Council yet. I did a quick scan of the Land Use and Planning Committee agendas for the last year, and don’t see it mentioned there at all (as a preliminary step, any application would likely go to LUPC before it came to Council). I also checked the on-line “Projects on the Go” table, and see no reference to your location, so I am pretty sure no formal application has been made to the City.

In researching your answer, I stumbled upon a report that I am a little reluctant to link to, because it was authored by an organization that has a long reputation of producing dubious reports using sketchy research methods. But for that it is worth, a third party with no reason to make a progressive city like New Westminster look good found that we are comparatively quick in getting new buildings through the approval process. They found that our staff and process are able to process applications faster than most Municipalities in the Lower Mainland: generally in the top 3 or top 5 in the region (depending on the application type). They also found we had among the lowest “Costs and Fees” for a typical application (those fees are ideally set to act as cost recovery). I started by saying I am somewhat separated from front-counter activities at the City, so none of this credit goes to me, but kudos to our great professional staff!

So, in summary, if you are curious about redevelopment plans for your apartment, keep an eye on the City’s LUPC Agenda and the “Projects on the Go” list. Also remember, as a renter, you have rights under the Residential Tenancy Act, including appropriate notice and compensation for being evicted. If you have questions, you should contact those professional staff in our Planning Department. They almost certainly know more than I do. Good luck!

Ask Pat: Climbing (pool) walls

Jason asks—

I’m very interested about how the new pool is coming along and would like to know if there is still opportunity to give input on what amenities go into this new centre.

This coming summer Olympic games in Tokyo will feature a new sport: rock climbing. The climbing event will include three disciplines: sport, bouldering, and speed. 40 climbers (20 men and 20 women) will compete over four days, and the medalists will be chosen based on the combined results of all three disciplines.

I understand that adding a full-scale rock wall, bouldering wall AND speed wall might not be in the budget or have space for it in the new facility. Perhaps only one discipline could be incorporated into the new building… I propose speed climbing. This is because there are already dedicated facilities who offer a wide range of sport and bouldering walls, but speed walls are few and far between. Creating a place for speed wall competition would add a truly unique, exciting, cutting edge component to New Westminster that no other municipality in the country offers. The square footage required of a climbing wall would be fairly minimal as the space needed is more vertical than horizontal. New auto-belay systems are very safe and would allow for individuals new to climbing to try out the sport without needing a partner to belay for them.

We live in a part of the country that offers mountains and the ocean, all in one city. But we all know that it rains for the better part of the year, so why not offer swimming AND climbing in this new state of the art facility?

So my question to you is: What would it take for council to seriously consider incorporating the idea of a speed climbing rock wall into the plans?

The short answer is people need to ask for it, and convince staff it is a good idea. A good case can be made that this improves the overall program in a meaningful way, and makes the entire pool a better grant application. Of course, as always, there is a longer answer.

The Canada Games Pool replacement is a big project, likely the biggest single capital investment the City has ever made. We have spent a couple of years doing extensive public consultations and project planning work – from figuring out a financing model to determining where a new 140,000sqft building can be built without tearing down the old pool first to developing a business plan around what the different major program elements (natatorium, pools, gyms , meeting space, etc.) look like. As we reported last month, we have a pretty well developed plan around these “big questions” and are now working on the next steps: developing a solid senior government grant application and procurement processes.

With clear direction on the bigger questions (square footage, major program elements, buildability), we still have a tonne of smaller questions to answer. I don’t mean smaller in the sense that they are less important, but smaller in that they are more fine-grained details that we need to design, the can hang on the larger framework once built.

I was able to attend one day of  conference out in Harrison last winter where recreation programmers from around the province met to talk about new trends in recreation. It was interesting to hear, especially, how community recreation spaces (centres and outdoor spaces) were changing in Europe. The old-school gyms where basketball and badminton and indoor soccer lines shared floor space between four blank walls were being replaced by more organically-shaped mixed use spaces. They still accommodate the traditional team sports, but were designed to also accommodate adventure playing, climbing walls, and “free play” areas. Outdoor areas where there used to be a soccer pitch within a running track used free spaces to create three-dimensional workout and fun areas, again emphasizing unstructured and creative play instead of just traditionally-structured team sport. It was inspiring, as there was clear integration of traditional sports with spaces designed to be more flexible and share space, and our recreation staff were paying attention.

So when I think about the Canada Games Pool replacement, I see gyms that can house basketball and pickleball, but I also imagine a space designed to have this kind of flexibility. I think a climbing wall would be a great addition, and could easily be fit within that space.

I’m not a climber, so I would need to hear from the climbing community what they would want to see, and to know how it can fit within the space. This should happen soon, as every new and creative use idea (especially ones that appeal to emerging competitive sports) actually strengthen the case for significant Federal and Provincial grants. Could you rally Sport Climbing BC into sending a brief to Council and staff? Let me know!


On a somewhat similar point, I can answer a question for a resident who dropped by my Ask Pat booth a couple of weeks ago and asked about the future of the diving board at Moody Park outdoor pool. As I wrote this answer to you, I see that Staff have come up with a creative replacement plan, so here is the background on that.

The diving board had some structural problems last year, and required repairs. However, the diving board was increasingly an area of concern at the pool, as the depth of the pool and nature of the slope in the tank was such that it did not make our lifeguard staff happy. They restricted head-first diving, and it had been increasingly causing them concern, so the decision was made to not replace the diving board. This is a disappointment to some of the regular pool users.

The good news is that staff have found a creative play element that can replace the diving board, and not have the safety concerns of the springboard. It is an adjustable climbing wall apparatus that bows over the water. Kids and adults can challenge themselves to do climbing moves and try to get to the top of the apparatus, and will splash down in the deep end of the pool if (when!) they lose grip.

I recognize this is not a “competitive” climbing apparatus, but it is adjustable to different skill levels, and should be a fun piece of equipment, and may give a generation of kids a first taste of the newest Olympic sport.

Ask Pat: Elections?

Ed Sadowski asks—

When will we know if you will be running again in the upcoming municipal elections?

Yes, I am running for Council again. Sorry for the delay responding to you, but I did have to do a bit of serious thinking and also put a few things in place so that when I announce my intention to run again, people have a way to contact me and I don’t lose that initial campaign bump on that is (apparently) important.

If you want to read about my campaign, why I am running, what I want to do next term, and why I think you should vote for me, please go over to my campaign website (PJNewWest.ca). It is a little bare-bones right now, but I will be updating and improving it as the campaign goes on. One of my challenges with “launching” my re-election campaign is trying to figure out how I can keep this conversation – 8 years of blogging, hundreds of blog posts, its gotta be a million words by now – and keep it a little separate from the rhetoric necessary for campaigning. The election is in October, but I still have 4 months of work to do before then, so here is my strategy.

This website will pretty much stay the same, with blogs, updates on City stuff, random opinions on topics that interest me, and Ask Pats answered when I get a chance. My Campaign website will talk campaign, will have all of that campaign “why you should vote for me” stuff. My regular Facebook Page will be pretty much as it always was, and my Campaign Facebook Page will have campaign Facebook stuff like updates on where I am going to be, special campaign events, and probably a fair amount of campaign-related opinions. There is no way I am managing two Twitter accounts, or two Instagram accounts, so those are staying as is.

In the meantime, I’ll be out in the community as I have always been, ready to talk about the City and sharing ideas with the citizens of New West. It’s going to be a busy 4 months, but let’s take the time to talk.

Ask Pat: Arenas

Jeremy asks—

What is the current usage rates of our arenas? I see calls for a third area, but I don’t know how often our current arenas are empty, or how many groups trying to book ice time would be unable to do so.

Simple answer is I don’t know, but my reflex answer is that our arenas are well used, rarely empty, but not bursting at the seams. As usual, that answer needs to be put into context of how the City plans and builds new and replacement facilities.

A new facility, be it a swimming pool, a skating rink, or a skate board park, has a capital cost (what it costs to build the thing on the day we build it and over the long term in upkeep and maintenance), and an operating cost (what it costs every year to keep the lights on, staff to maintain the ice and run programs in the facility). Those second costs can be small, like a skate park, which costs very little to maintain once built; or very high, like the old Canada Games Pool, which is a real energy and resources hog.

Conversely, many facilities earn revenue from pool or ice rentals and program fees, but it is almost a fundamental principle of public recreation facilities that the revenue never covers the capital and operational costs. For every person who walks into the Canada Games Pool to swim, take a fitness class, or drop heavy weights on the heads of change room occupants, the City subsidizes their visit by about $2. There is no financial model where a pool with services like the Canada Games Pool even breaks even on earned revenue (otherwise private business would be competing us out of the business, no?),  and models where private companies run ice rinks rarely provide a high level of programming without significant support from clubs and local governments. Many facilities, such as the library, the skate park, or a playground, earn little or no revenue, but are nonetheless important amenities to improve the quality of life of people in a community.

I mix all of these together because building a new facility is never a stand-alone decision. It is *always* about placing things in a priority, which means both understanding the (perceived and actual) demand, and recognizing how existing and new facilities impact your capital and operating budgets.

The demand part can sometimes be recognized by the public and user groups before it comes to the attention of Council, who ultimately hold the purse strings and have to make the priority call. However, lacking a very motivated special interest group, it is much more common that staff who operate these facilities recognize capacity issues or unmet need and bring these challenges to Council through strategic and budget planning. This is the situation with library upgrades, with the Canada Games Pool and Centennial Community Centre replacements, with the expansion of the Queensborough Community Centre, and with the decisions we have made to invest in more flexible (but much more expensive) turf field replacements.

Sometimes, those priorities get shuffled by events. A neighbouring community building a new pool or an event like the Arenex collapse can shuffle the deck, causing us to move priorities in order to assure our program needs are met, and to assure we have the capital flexibility to deal with unexpected needs when they occur. The Arenex is an example of something that we now have to add to our capital budget, and to our planning. The capital cost of its replacement is covered for the most part by insurance, but it still needs to be included in a budget, and we still need to take staff off of existing projects to go through the replacement planning, project management, procurement and design work to make sure we replace it with the right thing. Again, staff time is one more thing that has to sit in a priority list – what work do we delay to rush the replacement of the Arenex?

So back to answering your question. We have not heard from staff that there is a huge unmet demand for ice in the community or the region, at least not in comparison to other unmet needs that have been placed higher in the capital planning priority list. And they would know better than I would, as they are the ones managing the day-to-day resource needs of the community.

That said, with recent requests from some members of the public, Council has asked staff to do a bit of work and better define for us where a third sheet of ice (or other ice allocation improvements) fits on the capital plan priority list, and whether there is a compelling demand case for moving it up. This has to also include some analysis of where ice demand is regionally so we can better understand how the two new ice sheets on our border in Burnaby and two more sheets in Port Coquitlam will impact regional needs. So staff are going to add this work to their work plans, and prioritize it alongside ongoing work to support the Arenex programs and plan the replacement, getting the Canada Games Pool project ready for senior government grants, and all of the other capital works already in our plans. This is a responsible way to approach new capital funding requests, whether they come to us from staff’s understanding of need, or from a data-gathering petition at the beginning of an election campaign.

Ask Pat: DCC, MFA, WTF?

This is not a real “Ask Pat”, but I was recently shown this Facebook Post, and I asked the author if I could answer it at length on my blog. I think it provides a good opportunity to open up a bit of how municipal financing works, from my decidedly non-expert-but-required-to-learn-enough-to-make-decisions viewpoint, and (in a roundabout way) asks what I think is a fundamental question about financing municipal infrastructure.

So here’s a question I’ve been pondering for a while about the housing crisis. I’m not sure exactly when the Local Government Act was amended to change the way municipalities generate revenues to cover the cost of infrastructure to support growth. The current method is called Development Cost Charges (DCC’s).

In conversations with a retired city controller I learned that up to the implementation of DCC’s cities would issue Municipal Bonds to generate the funds needed to cover these costs, build the infrastructure and then taxpayers would collectively pay for the costs through tax payments. In the early 70’s the Province created the Municipal Finance Authority to streamline this process so that hundreds of small communities didn’t have to be floating bonds to generate their infrastructure capital they now have expertise and experience at the MFA.

All this changed with the enactment of provisions in the Local Government Act for DCC’s which are essentially prepaid taxes paid to municipalities to cover the costs of roads, sewer and water installations and parks associated with the new development whether that’s an addition to your house or a 50 storey condo development.

OK so what? Well now the purchase price of that newly developed housing unit comes preloaded with tens of thousands of dollars of prepaid taxes. For arguments sake let’s use $50K as a nice round number, please bear with me for this illustration. So your purchase price includes this $50K, which by the way the developer probably has to finance plus any profit margin the developer might add and so additional costs, but lets work with $50K for now. At 5% mortgage interest that increases monthly payments by about $290 and adds over $37,000 in additional interest to the mortgage. With me so far? Now let’s add property transfer taxes and these days for a lot of people government mandated mortgage insurance as well.
So we’ve transitioned away from publically financed infrastructure growth to growth financed by individual families. What used to be money borrowed at preferential interest rates through government Bonds is now financed by homeowners through their local BANKS, the same ones that continue to report record quarterly profits year after year after year.

So what about the cities. Well since 2008 Canadian Municipalities collectively have managed to sock away over $100BILLION IN CASH while continuing to press Federal and Provincial Governments for cash to help them cover the costs of their suppossed infrastructure deficits. It seems to me that while its easy to blame ‘foreign investors and speculators’, at least some of this crisis needs to be laid at the feet of our governments at every level.

My first impression is that this discussion conflates a couple of things, and that is leading to a bit of confusion. Here is my understanding of the relationship between DCCs, Municipal Bonds, and the MFA.

The idea behind DCCs is to charge the capital cost of infrastructure expansion to the persons who benefit from that expansion. DCCs are charged when there is growth in residential density (a 3-story building becomes a tower, a house becomes a set of townhouses), and are meant to assure that a fair share of the cost of building bigger sewer pipes, bigger water pipes, buying new parks space, etc. is covered by the new population that fills that density. The City charges a DCC based on the square footage of the new density, and presumably the developer passes that cost onto the purchaser of the property, who is the ultimate beneficiary of the new infrastructure. In New West, we have DCC Bylaws for Transportation, Water Supply, Sanitary Sewer, Drainage, and Parks.

At current rates, a new 1,000 sq ft apartment in Downtown New Westminster would include about $5,140 in DCCs. That would be $1,120 for Transportation, $60 for drainage, $250 for water, $430 for sanitary sewers, and $3,290 for Parks. Note than a brand new 1,000 square foot apartment in New Westminster sells for something over $700,000. If you believe that the cost of new housing is directly correlated to the cost of building it, then DCCs can be said to raise the cost of any single unit by much less than 1%. Although they cumulatively do a lot to reduce the cost of infrastructure upgrades for current residents, I don’t think DCCs are a significant cause of the current housing affordability crisis.

It is important to note DCC money is not thrown into general revenue, but is put into specific reserve funds and earmarked for defined projects under the category for which they are collected. This is fundamental to the DCC regulation – they must be spent on improving infrastructure above and beyond what would have been spent if the density was not permitted.

For obvious reasons, DCC money is not spent the day it is collected. A City is a complicated thing, and we cannot upgrade a section of sewer on a whim. Instead, we need to plan out years, sometimes decades, in advance so that all parts of the system work together. When collected, DCC money mostly goes into a reserve fund and is drawn out when the works happen. Sometimes we can borrow against a reserve fund (if the sewer needs to be upgraded today, but a DCC has not been collected yet and we are confident it will be collected in the near future), but even that is a bit deeper than we need to go here.

DCCs also don’t pay for all infrastructure upgrades. Even if there was no density increase in a City, we would have to replace your water lines every 50 years or so, pave your road every 10 years or so, etc. That money comes from property taxes (in the case of roads and parks) or part of your water/sewer bill (in the case of the pipes). We collect a little more in your water bill than it costs us to run the water system, and set that aside into those same reserves to pay for maintenance and upgrades of the system when they are needed. Alternately, we can pay for the upgrades when they come up by borrowing money, and charge future users that cost (plus interest). As you will see, we do a little of both based on what makes the most financial sense at the time.

That is how we can have both $120 Million in our reserves and $65 Million in debt. I hate using household finances as a model for explaining municipal finance (they are two very different things), but this is similar to having money in an RESP account at the same time as holding mortgage debt: we do it for rational reasons related to how the financial and taxation systems are designed. We didn’t invent global capitalism, but we operate within it. If you have an alternative system that more fairly distributes capital, send me your e-mail and I’ll subscribe to your newsletter!

This does raise what I think is the fundamental question about how we finance public infrastructure. If we want to build, say, a new $100 Million recreation complex, do we save up enough money to pay for it before we build it, or do we build it on debt and pay it off over time? There are compromises to both.

In the first case, everyone pays today into a reserve fund until we hit the number that we need to build the complex. It will take several years, and for all that time, the taxpayers of the City will be paying into the fund but not receiving the benefit of those payments until some point in the future when the complex is completed (if they still live in the City at that time). Is that fair to them?

In the second case, the complex gets built first, and the people who have an opportunity to benefit from that complex pay taxes for it while it is being used. Of course, they have to pay a little more this way because the debt needs to be serviced over the period of time it takes to pay it off. Is that fiscally prudent?

(It sounds to me like you would prefer more of the latter in the case of financing infrastructure related to new growth, as it would result in the City borrowing more from the MFA or Municipal Bonds and spreading the cost evenly among all taxpayers, whereas the former puts more burden on the new home purchaser which they would, presumably, borrow from a bank to finance. Please correct me if I got your argument wrong.)

There are other factors that need to be considered, and this is why most local governments do some combination of both. It matters what interest rate a local gov’t can earn on its reserves vs. what interest they pay servicing the debt. In this low-interest era, we may choose differently than back in the high-interest 70s. These rates are also related to your financial status: a City with $100 Million in the bank can get a lower rate than a City with $100 Million in debt. There are also significant complications local governments have to go through to borrow beyond their 5-year financial plan. Add to this uncertainties like inflation of construction cost and other capital needs that may pop up in the same time period. The practicality is that we sometimes need debt, and we benefit from strong reserves. 

I don’t want to get into the discussion here about us going to senior governments with hats in hand asking for their help in funding public infrastructure (this blog post is already much too long). However, I can summarize by saying local governments are responsible for the maintenance and upkeep of about 60% of public infrastructure in Canada, and we directly receive about 8% of all tax revenues. Without help from senior governments, little of your public infrastructure would be sustainable. The Infrastructure Gap commonly measured across Canada to be more than a hundred billion dollars is measured above our existing reserves; but I digress.

The Municipal Finance Authority is, essentially, a Credit Union. Local Governments can borrow money from the MFA at rates better than we can get from commercial banks, and we can save our reserves with the MFA and receive a pretty good return. Most years, New West makes a little more in interest on our reserves than we spend in interest on our debt (though market fluctuations obviously impact this equation). As you note, the MFA structure has largely replaced Municipal Bonds issued by individual Local Governments. In essence, the MFA issues Bonds on behalf of all its member Local Governments. I am really not an expert on this part of finance, but I would assume that the reason we use the MFA instead of issuing our own Bonds is that the interest rates the MFA can offer (because they are a large, diverse organization) is much lower than we would have to pay to make the Bonds attractive in this razor-thin investment market.

But perhaps more to the point, the Bonds vs. MFA issue is something completely separate from the DCC discussion. DCCs are taxation – they generate revenue for a Local Government. Bonds are simply debt instruments; they are loans which we would have to generate revenue (taxes) to pay back. This takes us right back to the fundamental question that we have already asked – when should a government collect the money to pay for new infrastructure? Before it is built, or after? In reality, we do a little of both, and use the financial instruments available to us under the Local Government Act to hopefully strike a fair and responsible balance between the needs of today and the needs of tomorrow.