Fears of increased debt and higher sewer rates in Muskoka are resurfacing following recent debate on local development charges.

Last week Muskoka district council voted in favour of an across-the-board 10 per cent increase in development charges, the fees new home and business owners pay to municipalities to contribute to the added cost of growth.

Council was originally considering increasing development charges by nearly 100 per cent for residential development and more than 900 per cent for non-residential development.

But the majority of district councillors felt the recent economic downturn put development at risk in Muskoka and suggested such increases would force developers out of the community. This, they argued, could mean job losses and reduced tax revenues.

At a meeting last week, council rejected the larger increases in favour of the minimal increase. They will consider the matter again next summer.

Still, some councillors are concerned about Muskoka’s debt and how to repay it.

Muskoka Lakes mayor Susan Pryke came to last week’s meeting armed with figures from Stephen Cairns, district commissioner of finance and corporate services. Cairns confirmed the numbers are correct, but only if the 10 per cent increase in development charges was implemented for five years.

With the 10 per cent model, over five years, the shortfall in repaying Muskoka’s debt would be $46 million, said Pryke.

“Who would pay for that?” asked Pryke. “That will be a debate for another day, but currently under the rules that exist, the users pay for that – mostly the sewer users.”

A second option, which included a three and five year phase-in of the higher development charges, would still leave the district with a shortfall of $32 million, she said.

Pryke added that the shortfall would mean more increases to sewer rates. If the 10 per cent model is taken, rates could increase by 49 per cent. If higher development charges were adopted, but phased in, there would be a 39 per cent increase.

 “The 10 per cent solution across-the-board isn’t enough,” said Pryke.

Cairns said the figures cited by Pryke were calculated using figures from Muskoka’s recent growth study and development charges study.

He stressed the numbers are only relevant if the 10 per cent increase is not adjusted in July.

 “In the short term, probably the difference between the 10 per cent and the (phased in option) is fairly insignificant,” said Cairns. “Because you are only really looking at it for the next eight months. It’s not a prime time building permit issuance.”

The 10 per cent increase is an across-the-board increase, which is in contrast to the phased-in solution, which included exemptions for existing commercial expansion, said Cairns.

“I think at the end of the day – between the two – there is different messaging, but not significant in terms of dollars.”

Cairns said he doesn’t think council will leave the increase at 10 per for the next five years.

“There will be some movement in July,” said Cairns.

From now until that time councillors will have a chance to look at the figures and see if the economy will take a certain direction, he said.

Some district councillors, like Lake of Bays councillor Ben Boivin, thought a reduction in the debt should be a priority.

In the public meeting on the district’s debt problem in August, the consensus was to include the development charges in the solution, said Boivin.

“All the sudden now, it’s like a flashback, like I am having a bad dream – five years ago, the same arguments that are being presented now are the arguments I heard five years ago,” said Boivin.

Muskoka Lakes district councillor Mary Grady said she feared there would be a “mass exodus from our urban areas.”

Grady pointed out that only a few months ago the same council levied a 17 per cent increase to water and sewer users.

“Those people are in the same economic downturn as everybody else is in,” said Grady.

But the majority of councillors, 12 out of 20, favoured letting developers know “Muskoka is open for business” in difficult economic times.

That thought resonated with land development consultant Josh Campbell of Rock Solid Consulting in Bracebridge.

Campbell represents a housing developer who had several projects planned in Muskoka and was ready to pull out if development charges increased as originally planned, said Campbell. The increases would have meant an additional $10,000 for his client.

“Millions of dollars – and additional users to assist in paying for the system – would have been gone,” he said.

Muskoka Builders’ Association president Dave Nodwell said his membership will be keeping a close eye on the issue in the future.

“We want to get involved in this process to make sure we have our say in it,” said Nodwell.

In particular, the commercial development charge increases were of concern for his membership.

“The commercial side the rates were way too high,” said Nodwell, adding that nearby municipalities like Parry Sound have no development charges.