Part 1: Growth Assumptions, Development Charges, and Financial Risk – 07/10/2024

The Audit Committee meeting was called to order as a virtual, live streamed meeting. The purpose of the meeting was to review audit related matters, with a strong focus on development charges, growth forecasts, and the numbers behind major infrastructure decisions, especially water and wastewater planning in Wellington. From the start, it was clear this meeting was about trust in data, risk to taxpayers, and whether current planning assumptions still make sense.

Photo: PEC Council (YouTube)

View the entire PEC Council meeting, or continue to speaker comments and councillor votes.

The committee quickly moved through agenda confirmation, conflict of interest declarations, and approval of the previous meeting’s minutes. There were no announcements or deputations, but there was a public comment, which set the tone for the rest of the meeting.

Public concerns about flawed data

A member of the public raised serious concerns about incorrect housing and growth data used in multiple county studies. The concern was that incorrect building permit and housing completion statistics had been provided to consultants, and those numbers were then used in growth forecasts, development charge studies, and public infrastructure planning.

The key issue raised was simple but serious. If the underlying data is wrong, then the conclusions are unreliable. That includes population forecasts and the justification for very expensive infrastructure projects, like a new regional water system estimated at hundreds of millions of dollars. The public comment questioned whether it makes sense to plan for growth that has not actually materialized, and asked whether council and committees can trust the numbers they are being asked to rely on.

Focus on development charges and growth forecasts

The core of the meeting centered on a discussion with a consultant from Watson and Associates. The committee was tasked by council to dig deeper into how growth numbers and development charges were calculated, especially for Wellington.

The discussion focused heavily on population growth assumptions. Committee members pointed out that the County has historically experienced very low population growth, yet recent forecasts assume a much higher annual growth rate for the next 30 years. This raised red flags. Members questioned how the county could suddenly outpace nearby municipalities when building permits, housing starts, and employment trends do not clearly support that assumption.

Planned growth versus actual growth

A major theme was the gap between planned development and what actually gets built. It was acknowledged that thousands of housing units are approved or in advanced planning stages, but approvals do not guarantee construction. Developers can sit on approvals for years, waiting for market conditions to improve.

Committee members repeatedly returned to the risk of planning infrastructure for growth that may arrive slowly or not at all. If water and wastewater systems are sized for optimistic growth scenarios, but development lags, then someone still has to pay for that infrastructure in the meantime.

The Wellington commercial development issue

One of the most contentious topics was the assumption that Wellington will see nearly one million square feet Wellinof non residential development. This assumption directly affects development charges, making Wellington’s commercial charges much higher than nearby municipalities.

Committee members questioned who would realistically choose to build commercial space in Wellington when development charges are several times higher than places like Belleville or Quinte West, and where transportation access and workforce availability are more limited.

The explanation given was that the number comes from the master servicing plan, which assumed a certain amount of commercial land would be developed. Infrastructure was then sized to serve that assumed demand. Development charges were calculated afterward as a way to recover those costs.

Risk to ratepayers

A critical takeaway from the discussion was that if commercial development does not happen as expected, the infrastructure still exists and still needs to be paid for. Development charges can recover costs over time, but if growth is delayed, interim financing costs fall to the ratepayer. This reinforced concerns that residents could end up paying for oversized infrastructure while waiting years for development charges to catch up.

The meeting ended with agreement that key questions remain unanswered, especially around population growth, employment growth, wage levels, and sensitivity analysis. The committee agreed that another meeting is needed with the consultant who authored the growth forecast, so those assumptions can be properly explained and tested.

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Disclaimer: This article is based on a meeting with an approximate duration of 1:20:39. Due to the length of the meeting, our team was not able to independently review the full recording in its entirety. As a result, we relied on software-generated transcription, automated summarization, and automated recognition of speakers and participants, which may not be entirely accurate. All transcriptions, summaries, and related content are prepared by our team in good faith and on a reasonable best-efforts basis. The content is provided for general informational purposes only and is intended to support public understanding of the topics discussed. While reasonable efforts have been made to present the information accurately, automated processes may result in errors, omissions, or unintended misinterpretations. This article does not constitute an official, certified, or verbatim record of the meeting, and it should not be relied upon as such. Readers are encouraged to consult original source materials, official minutes, or recordings where available for confirmation or clarification. Questions, requests for clarification, or suggested corrections may be submitted to hello@pecconnect.ca for review and consideration.