Proposed Regional Subdivision By-law Amendments: Security Options and Inspection Fees

Request

Amend the Regional Subdivision By-law to add development bonds as a security option for subdivisions with new infrastructure and revise how inspection fees are collected for the installation of primary and secondary services associated with subdivision.

Proposal

Development Bonds – The Regional Subdivision By-law (the By-law) currently allows the Development Officer to accept security, for the purpose of guaranteeing the construction of municipal infrastructure, to be submitted in the form of letters of credit, cash, certified cheque, or bank draft. The development bond has been described by industry as a practical alternative to a letter of credit. The development bond can be structured to suit the needs of the Municipality as a pay-on-demand security which differs from construction bonds which are default instruments. Some key benefits include the financial assurance to a Municipality that a developer will successfully complete all obligations and the bond may be reduced, and ultimately released, when the infrastructure is accepted. A development bond provides the Municipality with the same financial assurance as a letter of credit and provides the developer with the benefit of improved liquidity to potentially fund other developments. Many other Canadian cities have begun the practice of accepting development bonds to secure development, notably the City of Calgary and the City of Hamilton. It should also be noted that the Halifax Regional Municipal Charter includes bonds as an option to secure infrastructure through the subdivision process. The intent is to include bonds, as acceptable to the Municipality in consultation with Finance, as an additional form of security for this purpose. 

Inspection Fees – The Regional Subdivision By-law currently requires applicants of subdivisions with new infrastructure to pay inspection fees equal to 0.5% of the total cost of primary and secondary services to be installed. This amount is required to be paid prior to a pre-construction meeting to commence construction of the new streets and services. Upon acceptance of the Municipal infrastructure and completion of the warranty period, the unused inspections fees are returned. It is proposed that the By-law be amended to require inspection fees to be paid upon inspection as set out in Admin Order 15. Required inspections will be requested and paid through the infrastructure permit in the online Permitting, Planning, Licensing and Compliance system. Collecting fees in this manner would reduce the administrative burden of holding, drawing, and returning funds associated with inspection fees. This will reduce red tape and improve customer service.

Process

Community Engagement

Regional Council approved the public participation program as outlined in the December 12, 2023 Initiation Report for the proposed amendments, per the following:

Providing additional flexibility relative to acceptance of security and altering the process for acceptance of inspection fees impacts land developers in HRM. HRM has held preliminary discussions with industry regarding the inclusion of development bonds as security. Many of the major developers and consultants in HRM have been involved in discussions about proposed changes to the inspection fee process. Discussions on both items have been positive and there is support for the inclusion of development bonds and changes to the inspection fee process from industry. Given the broad geography involved and the previous engagement on the matter with industry, the proposed level of community engagement would be consultation through the Development Liaison Group (DLG), and information sharing and invitation for feedback through the HRM website. In addition to this public participation, the HRM Charter requires a public hearing to be held before Regional Council can consider approval of any amendments.

The community engagement carried out was consistent with the public participation program approved by Regional Council. Staff met with representatives from the development industry through the Development Liaison Group and posted a notice with the proposed amendments on the Halifax.ca website accepting feedback between June 25th, 2024 to July 9th, 2024. Feedback from meeting with industry stakeholders has been positive with many key developers indicating they will use bonding as a security option for infrastructure subdivisions. Industry stakeholders support the proposal of charging per inspection to avoid burdensome carrying costs, overpayment and refunds in the infrastructure subdivision process. No feedback was received from the website posting.

Status

TAKE NOTICE THAT Halifax Regional Council did, on Tuesday, October 1, 2024 approve the following:

Regional Subdivision By-law – Security Options and Inspection Fees - HRM-Initiated application to amend the Regional Subdivision By-law that would include the addition of development bonds as a security option and revise how inspection fees are collected for the installation of primary and secondary services associated with subdivision.

The planning documents have been reviewed and approved by the Minister of Municipal Affairs and Housing as per the Halifax Regional Municipality Charter.

This notice was posted to this site on Friday, November 1, 2024 in accordance with the requirements of the Halifax Regional Municipality Charter.