Parkland Dedication: “How Low Can You Go?” by Barnet H. Kussner1 “You can neither lie to a neighbourhood park, nor reason with it. 'Artist's conceptions' and persuasive renderings can put pictures of life into proposed neighbourhood parks or park malls, and verbal rationalizations can conjure up users who ought to appreciate them, but in real life only diverse surroundings have the practical power of inducing a natural, continuing flow of life and use.” Jane Jacobs, The Death and Life of Great American Cities A. Introduction In the modern urban environment, parks and public recreational facilities are things that can be both greatly appreciated and taken for granted. We might all agree that parks are inherently a ‘good thing’ for ensuring the health, well-being and vibrancy of our communities and the people who live and work there; however, where there is often widespread disagreement and controversy is on the more concrete issues of how and where we plan for parks, and who pays for them. These issues are of increasing importance in an economic and policy environment of scarce public resources and high costs for land and services in the modern land use planning and development context. It therefore comes as no surprise that in the post-Growth Plan era, parkland dedication has become a focal point for discussion and debate among the development industry, public sector bodies such as municipalities and the Province, and the Ontario Municipal Board (“OMB” or “Board”). The purposes of this paper are: (1) to explore the statutory and policy framework for the provision of parks and public recreational facilities as part of the development approval process in Ontario; (2) to discuss the issues that have arisen in the forefront of the discussion and debate about the provision of parkland or cash-in-lieu of parkland as a condition of development approval; and (3) to examine, as a case study, the adjudicative response from the OMB in its recent decisions involving the Town of Richmond Hill Official Plan and its implications for future policy decisions on parkland dedication. 1 Partner, WeirFoulds LLP, Barristers & Solicitors, Toronto. The author gratefully acknowledges the contributions made by Tracey Steele, Manager of Parks Planning & Natural Heritage, Town of Richmond Hill, as well as the comments provided by Kim Mullin, Partner, WeirFoulds LLP. Any errors or omissions are, of course, the author’s alone.- 2 - B. The Statutory Framework Historically in Ontario, the primary means by which municipalities have acquired land for park-related purposes is by way of a requirement that land be conveyed for such purposes as a condition of development approval under section 42 of the Planning Act2 – commonly referred to as parkland dedication. That section provides as follows: Conveyance of land for park purposes 42. (1) As a condition of development or redevelopment of land, the council of a local municipality may, by bylaw applicable to the whole municipality or to any defined area or areas thereof, require that land in an amount not exceeding, in the case of land proposed for development or redevelopment for commercial or industrial purposes, 2 per cent and in all other cases 5 per cent of the land be conveyed to the municipality for park or other public recreational purposes. Definition (2) For the purposes of subsection (3), “dwelling unit” means any property that is used or designed for use as a domestic establishment in which one or more persons may sleep and prepare and serve meals. Alternative requirement (3) Subject to subsection (4), as an alternative to requiring the conveyance provided for in subsection (1), in the case of land proposed for development or redevelopment for residential purposes, the by-law may require that land be conveyed to the municipality for park or other public recreational purposes at a rate of one hectare for each 300 dwelling units proposed or at such lesser rate as may be specified in the by-law. Official plan requirement (4) The alternative requirement authorized by subsection (3) may not be provided for in a by-law passed under this section unless there is an official plan in effect in the local municipality that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement. Use and sale of land (5) Land conveyed to a municipality under this section shall be used for park or other public recreational purposes, but may be sold at any time. Payment instead of conveyance (6) The council of a local municipality may require the payment of money to the value of the land otherwise required to be conveyed under this section in lieu of the conveyance. No building without payment (6.1) If a payment is required under subsection (6), no person shall construct a building on the land proposed for development or redevelopment unless the payment has been made or arrangements for the payment that are satisfactory to the council have been made. Redevelopment, reduction of payment (6.2) If land in a local municipality is proposed for redevelopment, a part of the land meets sustainability criteria set out in the official plan and the conditions set out in subsection (6.3) are met, the council shall reduce the amount of any payment required under subsection (6) by the value of that part. 2 R.S.O. 1990, c. P.13, as amended (the “Act”)- 3 - Same (6.3) The conditions mentioned in subsection (6.2) are: 1. The official plan contains policies relating to the reduction of payments required under subsection (6). 2. No land is available to be conveyed for park or other public recreational purposes under this section. Determination of value (6.4) For the purposes of subsections (6) and (6.2), the value of the land shall be determined as of the day before the day the building permit is issued in respect of the development or redevelopment or, if more than one building permit is required for the development or redevelopment, as of the day before the day the first permit is issued. Where land conveyed (7) If land has been conveyed or is required to be conveyed to a municipality for park or other public purposes or a payment of money in lieu of such conveyance has been received by the municipality or is owing to it under this section or a condition imposed under section 51.1 or 53, no additional conveyance or payment in respect of the land subject to the earlier conveyance or payment may be required by a municipality in respect of subsequent development or redevelopment unless, (a) there is a change in the proposed development or redevelopment which would increase the density of development; or (b) land originally proposed for development or redevelopment for commercial or industrial purposes is now proposed for development or redevelopment for other purposes. Non-application (8) Despite clauses 74.1 (2) (h) and (i), subsection (7) does not apply to land proposed for development or redevelopment if, before this subsection comes into force, the land was subject to a condition that land be conveyed to a municipality for park or other public purposes or that a payment of money in lieu of such conveyance be made under this section or under section 51 or 53. Changes (9) If there is a change under clause (7) (a) or (b), the land that has been conveyed or is required to be conveyed or the payment of money that has been received or that is owing, as the case may be, shall be included in determining the amount of land or payment of money in lieu of it that may subsequently be required under this section on the development, further development or redevelopment of the lands or part of them in respect of which the original conveyance or payment was made. 1994, c. 23, s. 25. Disputes (10) In the event of a dispute between a municipality and an owner of land on the value of land determined under subsection (6.4), either party may apply to the Municipal Board to have the value determined and the Board shall, in accordance as nearly as may be with the Expropriations Act, determine the value of the land and, if a payment has been made under protest under subsection (12), the Board may order that a refund be made to the owner. Same (11) In the event of a dispute between a municipality and an owner of land as to the amount of land or payment of money that may be required under subsection (9), either party may apply to the Municipal Board and the Board shall make a final determination of the matter. Payment under protest (12) If there is a dispute between a municipality and the owner of land under subsection (10), the owner may pay the amount required by the municipality under protest and shall make an application to the Municipal Board under subsection (10) within 30 days of the payment of the amount.- 4 - Notice (13) If an owner of land makes a payment under protest and an application to the Municipal Board under subsection (12), the owner shall give notice of the application to the municipality within 15 days after the application is made. Park purposes (14) The council of a municipality may include in its estimates an amount to be used for the acquisition of land to be used for park or other public recreational purposes and may pay into the fund provided for in subsection (15) that amount, and any person may pay any sum into the same fund. Special account (15) All money received by the municipality under subsections (6) and (14) and all money received on the sale of land under subsection (5), less any amount spent by the municipality out of its general funds in respect of the land, shall be paid into a special account and spent only for the acquisition of land to be used for park or other public recreational purposes, including the erection, improvement or repair of buildings and the acquisition of machinery for park or other public recreational purposes. Investments (16) The money in the special account may be invested in securities in which the municipality is permitted to invest under the Municipal Act, 2001 or the City of Toronto Act, 2006, as the case may be, and the earnings derived from the investment of the money shall be paid into the special account, and the auditor in the auditor’s annual report shall report on the activities and status of the account. Under section 42 of the Act, the council of a local municipality may pass a by-law requiring that as a condition of development or redevelopment of land, land be conveyed for park or other recreational purposes. Section 42(1) authorizes such conveyance in an amount not exceeding 2% of the land (in the case of commercial or industrial development/redevelopment) or 5% of the land (in the case of all other development/redevelopment).3 Notably, there are no statutory pre-conditions which the municipal council must meet prior to enacting a by-law which implements these “standard” requirements, nor any prerequisites other than the standard processes mandated by the council’s own procedure by-law or at common law. It is also noteworthy that there is no right of appeal to the OMB from a by-law passed under Section 42 of the Act. Under section 51.1 of the Act, the identical parkland dedication requirements may be imposed as a condition to the approval of a plan of subdivision pursuant to section 51. In that instance, the requirement is determined by the approval authority as a condition of subdivision approval rather than by by-law, and is 3 Planning Act, s. 42(1)- 5 - thereby subject to a right of appeal to the Board respecting the fairness, reasonableness and appropriateness of the condition of approval.4 Section 42(6) of the Act authorizes a municipality to accept all or part of the parkland dedication requirement by way of the payment of money instead of actual dedication – more commonly known as “cash-in-lieu”. Under section 42(10), the amount of the cash-in-lieu requirement must be determined on the basis of the appraised value of the lands that would otherwise have to be dedicated, as of the date prior to building permit issuance. In other words, the amount payable is based on the full development potential of the lands having regard to the actual development proposed. As a general matter, the “standard” 5% requirement for parkland dedication in the case of residential development is geared toward satisfying the local park needs of new residential subdivisions. In such a low to medium density context, there is typically sufficient land area available to accommodate an appropriately-sized park to serve the recreational needs of its residents. However, when it comes to modern high-density development - particularly in the context of infill or intensification consisting of a high number of residential units on a relatively small parcel of land - the 5% parkland dedication requirement is particularly ill-suited to serve its intended purposes, whether by way of actual dedication or cash-in-lieu. In both respects, and with limited exceptions, in a typical high-density scenario the standard 5% requirement is apt to be insufficient to satisfy the actual parkland needs generated by the proposed development either on-site or off-site. For this reason, both section 42 and section 51.1 of the Act provide that in the case of residential development, the municipality is also authorized to impose an “alternative requirement” for parkland dedication: specifically, in the case of section 42(3), that land be conveyed to the municipality for park or other public recreational purposes “at a rate of one hectare for each 300 dwelling units or at such lesser rate as may be specified in the by-law” adopted by the municipal council under section 42. This is also commonly referred to as the “alternative rate”. In the case of section 51.1(2), the alternative rate is to be “determined by the municipality”,5 although as a practical matter many municipalities include it as part of the same by-law as the section 42 requirements. 4 Planning Act, s. 51.1 5 Planning Act, supra, ss. 42(3), 51.1(2)- 6 - Notably, the alternative rate is not expressed as a maximum or “up to” in section 42(3). Rather, it is a specific statutorily prescribed rate of one hectare per 300 units. Like any rate prescribed by law, no municipality has the right to exceed it; however, if the municipality so chooses, it can opt for “such lesser rate as may be specified in the by-law” contemplated under section 42. In both instances, the Act imposes one statutory requirement which must be met before the municipality can impose the alternative requirement. That requirement is as follows: (a) Subsection 42(4) – the alternative requirement “may not be provided for in a by-law passed under this section unless there is an official plan in effect in the local municipality that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement”. (b) Subsection 51.1(2) – where the approval authority for plans of subdivision has imposed a condition under subsection 51.1(1) requiring land to be conveyed to the municipality, the municipality may impose the alternative requirement if it “has an official plan that contains specific policies relating to the provision of lands for park or other public recreational purposes.” In contrast to subsection 42(4), there is no express proviso in subsection 51.1(2) that the specific policies must “deal with” the use of the alternative requirement itself.6 Although planning for parks has long been an integral component of land use planning at the local level, a comprehensive specific statutory framework for parkland dedication has only been in place since 1973 - little more than 40 years now. Prior to the amendments to the Planning Act back in 1973, section 33(5) of the Act had contained a provision respecting conveyance of land to the municipality “for public purposes other than highways” as a condition of subdivision or consent approval only. Specifically, it authorized the requirement, as a condition of subdivision or consent approval, that “land to an amount determined by the Minister but not exceeding 5 per cent of the land included in the plan shall be conveyed to the municipality for public purposes other than highways”. If the owner of the land was not satisfied with the condition, like 6 Planning Act, supra, ss. 42(4), 51.1(2)- 7 - other conditions of approval, the owner had a statutory right to require that it be referred to the Board under section 33(7).7 As part of the 1973 amendments to the Act, section 35b introduced a similar regime for “the development or redevelopment of land for residential purposes” in circumstances other than subdivision or consent approval. Subsection 35b(1) authorized the council of a municipality to pass a by-law requiring, as a condition of such development or redevelopment, “that land in an amount not exceeding 5 per cent of the land proposed for development or redevelopment be conveyed to the municipality for park purposes”. Subsection 35b(7) made clear that this requirement applied in cases other than conveyances as a condition of subdivision approval. Subsection 35b(6) provided that the council of the municipality could accept all or part of the conveyance requirement by way of cash-in-lieu. Notably, there was no statutory requirement for Official Plan policies prior to the enactment of a by-law under subsection 35b(1). Moreover, in contrast to the by-law authorized under section 35a for development/site plan control, section 35b contained no right of appeal or referral of the authorizing by-law to the Board, nor any requirement for Board approval in respect of such a by-law or its application to a specific development or redevelopment.8 Section 35b also introduced, in subsection 35b(3), an “alternative requirement” to the 5 per cent conveyance requirement authorized under section 35b(1). It stipulated that the authorizing by-law “may require that land be conveyed to the municipality for park purposes at a rate of one acre for each 120 dwelling units proposed or at such lesser rate as may be specified in the by-law” [emphasis added].9 Like the 2 per cent and 5 percent conveyance requirements authorized by by-law under subsection 35b(1), the alternative requirement as determined by council by-law was not subject to any right of appeal or requirement for Board approval. Unlike the requirement authorized by subsection 35b(1), however, a bylaw authorizing and specifying the alternative requirement under subsection 35b(3) was made subject to one statutory condition – namely, the proviso in subsection 35b(4) that the alternative requirement “may not be provided for in a by-law passed under this section unless the municipality has an official plan that contains provisions relating to the provision of lands for park purposes, which provisions have been 7 Planning Act, R.S.O. 1970, c. 349, s. 33(5) 8 Planning Amendment Act, 1973, supra, s. 10 9 Planning Amendment Act, 1973, supra, s. 10- 8 - approved by the Minister subsequent to the coming into force of this section”. At that time, the Minister was the approval authority for all official plans. Notably, the requirement for official plan provisions did not expressly include policies relating specifically to the alternative requirement itself.10 In the R.S.O. 1980 consolidation of the Planning Act, sections 35a and 35b were renumbered as sections 40 and 41, respectively. Section 41 itself was otherwise unchanged from the previous section 35b, except for corresponding changes to the references to other sections as well as the change in subsection (3) from “one acre for each 120 dwelling units” to its metric equivalent, i.e., “one hectare for each 300 dwelling units”.11 The Planning Act was substantially amended in 1983. At that time, sections 40 and 41 remained substantially the same despite the numerous changes in form, substance and organization to the balance of the Act. In the case of section 41 itself, the following amendments were made: (a) Subsection 41(1) was amended by adding a provision, requiring conveyance of an amount not exceeding 2 per cent of the land proposed to be developed or redeveloped for commercial or industrial purposes, to the scope of the by-laws that may be passed by local municipalities. The authorized purposes for the conveyance requirement were also expanded to “park or other public recreational purposes” [emphasis added]. (b) Subsection 41(3) was amended to provide that the alternative requirement continues to apply only to residential development/redevelopment, and not additionally to commercial/industrial. However, the statutorily authorized alternative requirement remained “one hectare for each 300 dwelling units proposed or at such lesser rate as may be specified in the by-law”. (c) Subsection 41(4) was amended as follows: 10 Planning Amendment Act, 1973, supra, s. 10 11 Planning Act, R.S.O. 1980, c. 379, ss. 40 and 41- 9 - R.S.O. 1980 Version S.O. 1983 Version The alternative requirement authorized by subsection (3) may not be provided for in a by-law passed under this section unless the municipality has an official plan that contains provisions relating to the provision of lands for park purposes, which provisions have been approved by the Minister subsequent to the coming into force of this section. [emphasis added] The alternative requirement authorized by subsection (3) may not be provided for in a by-law passed under this section unless the municipality has an official plan that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement. [emphasis added] This language in section 41(4) (now 42(4)) has remained unchanged in the Planning Act to this day. As discussed further below, it is this statutory requirement for “specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement” that has been the principal focus of discussion and debate when it comes to section 42, particularly in the postGrowth Plan era where intensification in order to achieve Provincially-mandated growth targets has become a primary policy objective at the Provincial, regional and local levels. As noted below, other significant issues relating to section 42 have also been the subject of adjudication at the OMB, such as the sustainability criteria contemplated by section 42(6.2) and 42(6.3), as well as the valuation methodology mandated by section 42(10). However, it is the issues associated with the amount of parkland dedication (or more precisely, cash-in-lieu of land) authorized under the alternative requirement which – by a wide margin – have been accorded the most intensive scrutiny and consideration. Undoubtedly, this is mainly on account of the financial impacts associated with parkland dedication or cashin-lieu in the high-density development context. To the extent that the amount of cash-in-lieu payable under the alternative requirement is dependent on the development value of the property, and the value in the case of high-density lands is directly proportional to their maximum density potential, the section 42 obligations can pose significant financial challenges for both the developer and the municipality. For developers, at an alternative rate of one hectare per 300 units the quantum of cash-in-lieu payable on a per unit basis is likely to be substantially greater than other cost inputs such as development charges, particularly when dealing with land values that are approaching $10 million per hectare for intensification lands in some areas of the GTA. Likewise, for municipalities seeking to acquire lands for programmable- 10 - park purposes in order to achieve their mandated service levels, higher land values can make it prohibitively expensive for them to sustain the land acquisitions they require for those purposes. They can also pose challenges in terms of the policy objectives for intensification and affordable housing that have been mandated through the Growth Plan and at the regional Official Plan level in some areas of the GTA. To some extent, those challenges can be ameliorated through creative approaches toward satisfying programmable parkland needs, such as easements and stratified title, dedication of off-site lands, and publicly accessible private open space (POPS), as well as the sustainability criteria now contemplated by section 42 itself. However, even on a collective basis the successful implementation of these alternative strategies alone is unlikely to satisfy the needs of either of the two stakeholders most directly affected – namely, developers and municipalities. Collectively, these pressures have led to greatly increased scrutiny in recent years when it comes to the alternative rate for parkland dedication, which has been manifested at all levels of policy review and implementation. This has included an ongoing Provincial policy review which was originally commenced prior to the June 2014 Provincial election, but which remains ongoing as of the time of writing. It has also included greater awareness and involvement by the development community and other stakeholders in the consideration and adoption of Official Plan policies, as well as municipal by-laws implementing those policies under section 42 of the Act. Recently, these pressures have also generated substantial litigation before the OMB, both in terms of the relative jurisdictions and roles of the OMB and municipal councils in the formulation of policies dealing with parkland dedication and the alternative rate in particular, as well as the resulting policies themselves. For the first time since the alternative requirement was first established in 1973, there have been contested Official Plan hearings on parkland policies as adopted in the Official Plans of a number of municipalities where the pressures resulting from intensification policies have been most acute, particularly in the southern tier of York Region. The recent experience involving the Town of Richmond Hill Official Plan is perhaps the best illustration of the range of planning and policy issues that have arisen in this context, and how those issues have been adjudicated by the OMB.- 11 - C. Case Study: The Town of Richmond Hill Official Plan In July 2010, following several years of public review and consultation, the Town of Richmond Hill adopted a comprehensive new Official Plan (OP). The OP was appealed to the Board in 2011-2012 by a total of approximately 50 appellants, after the approval authority (York Region) did not make a decision within the statutory time period. Section 3.1.8 of the Town’s OP sets out specific policies related to the provision of land for parks and other public recreational purposes throughout the Town. It includes, among other things, specific policies dealing with the conveyance of lands for such purposes as a condition of development or redevelopment of land, and the rate at which such conveyances may be authorized by by-law pursuant to that section. The adopted policies were also endorsed for approval by York Region and the Ministry of Municipal Affairs & Housing. Since the appeals were filed in 2011-2012, the Town’s OP has been substantially approved by the Board, and the unapproved portions (including section 3.1.8) have been the subject of successive hearings on an issue-by-issue basis. A hearing in respect of section 3.1.8 took place over a 7 month period from November 2013 to May 2014. In January 2015 the Board released its decision allowing the appeals in part (attached as Appendix ‘A’), and approving section 3.1.8 substantially in the form in which it had been adopted by the Town and subsequently settled with most of the appellants, but with one very notable modification respecting the alternative rate. This will be addressed in further detail below. The origins of the Town’s post-Growth Plan policy framework respecting parks and parkland dedication can be traced back to December 2007. At that time Town Council approved Official Plan Amendment 249 (OPA 249), which amended the Town’s 1982 OP to include specific policies requiring the provision of land for park or other recreational purposes at the alternative rate of one hectare for each 300 units. Subsequently, a new Parkland Dedication By-law (By-law No. 97-08) was approved by Town Council on May 12, 2008 to implement the one hectare per 300 unit rate. In 2009 the Town’s parkland dedication policy was reviewed as part of the background work for the new OP. The review included: municipal benchmarking; preliminary assessments of parkland needs in intensification areas; legal consultation; and a consultant assessment of the impact of utilizing the- 12 - alternative rate on various actual and scenario-based developments in the Town. A Staff Report approved by Town Council in April 2010 summarized the results of the parkland dedication policy review and recommended that the one hectare per 300 unit rate be brought forward into the new OP. Consistent with the policy framework established by the OP for use of the alternative rate, the Town initiated the Parks and Recreation Plan process in 2012 to determine the Town’s specific parks and recreation needs over the OP planning horizon (i.e., to 2031). Following an extensive public consultation process and detailed analysis of facilities for parks and outdoor recreation across the Town, Council approved the final Parks Plan in April 2013. A new Parkland Dedication By-law (By-law No. 58-13) was brought forward at the same time to implement the parkland dedication recommendations of the Parks Plan. The new by-law included a reduced parkland dedication rate for high density developments of one hectare of land for every 730 persons (equivalent to 1 hectare per 380 units). Notably, By-law 58-13 replaced an interim provision which Town Council had enacted by way of an amendment to the Town’s previous parkland by-law in June 2011. The effect of that amendment (By-law 70-11) was to impose a specific alternative rate of $10,000 per unit as cash-in-lieu of parkland dedication. In a March 2014 decision involving a site-specific appeal and valuation of cash-in-lieu owing under that bylaw, the OMB cast serious doubt on the legality of a by-law which imposes a “per door” cap on cash-in-lieu of parkland dedication12. The Board’s concern was that this approach cannot be reconciled with the statutory requirement in section 42(10) that on an appeal to the Board, the value of the land must be determined “in accordance as nearly as may be with the Expropriations Act” – in other words, the fair market value of the land based on what a willing purchaser would pay a willing vendor having regard to the development rights associated with the land. In the meantime, following Town Council’s approval of the new OP in July 2010 as noted above, section 3.1.8 of the OP (the parkland policies) was appealed to the Board by a total of 11 parties representing various development interests. While many issues were raised, the key issue on all of those appeals was whether the policies in section 3.1.8 should include mandated reductions in the alternative rate authorized under section 42(3) of the Act. For the larger group of appellants, the proposed policies consisted of a 12 Great Land (Yonge 16th) Inc. v. Town of Richmond Hill, March 6, 2014 (OMB)- 13 - combination of elements, including: (i) for medium density development (50-99 uph), a reduced alternative rate fixed at 0.8 ha per 300 units; (ii) for high-density development (greater than 100 uph), a sliding scale ranging between 0.4 and 0.6 ha per 300 units, based on the number of bedrooms per dwelling unit; and (iii) in both instances, an overall cap which would limit the maximum dedication requirement to no more than 15% of the total development site or its cash-in-lieu equivalent. Prior to the main hearing, on a preliminary motion which was argued before the Board in 2012, the Town asserted that in exercising its jurisdiction to consider and approve OP policies “dealing with… the use of the alternative requirement” under section 42(4) of the Act, the Board did not have the jurisdiction to impose a cap or to reduce the specific alternative rate authorized by section 42(3). The Town’s position was that if there was going to be a reduction in the alternative rate, it could only be “specified in the by-law” adopted by Town Council in accordance with section 42(3). Based on the plain language in section 42 of the Act and the modern rule of statutory interpretation, the Town’s position before the Board was as follows: (a) On an appeal respecting Official Plan parkland policies, as with any Official Plan appeal, the Board must be satisfied that the proposed policies represent good planning. The policies are subject to all of the usual requirements and scrutiny in the context of all applicable planning policies (including Provincial and Regional policies) and other relevant planning considerations. At the end of that exercise, the Board will approve a set of policies that will, among other things, guide the use of the alternative requirement. Theoretically, it is open to the Board to conclude that there is no good planning justification to warrant the municipality exercising its right to impose the alternative requirement at all; in that event, there would be no approved policies "dealing with... the use of the alternative requirement", and the municipality will not have satisfied the condition imposed under section 42(4) - in which case it could not proceed to enact a by-law imposing the alternative requirement. (b) Either way, however, as a jurisdictional matter and in light of a comprehensive and contextual interpretation of sections 42(3) and 42(4), what the Board cannot do on an Official Plan appeal is fix the actual rate at which the alternative requirement is set at something less than one hectare per 300 units, or otherwise preclude the- 14 - municipal council from determining the appropriate rate by by-law. Once the Board considers and approves a policy regime "dealing with... the use of the alternative requirement" under section 42(4), the actual requirement itself - i.e., the rate at which it is set - is to be determined and imposed by by-law under section 42(3), at the discretion of the municipal council. It alone can decide whether it should be set at one hectare per 300 units “or at such lesser rate as may be specified in the bylaw”. It was the Town’s position that the Board cannot fetter that discretion by fixing a lesser amount as a matter of Official Plan policy; the effect of so doing, the Town argued, would be to take away the statutory right of the municipality to set the rate at one hectare per 300 units “or at such lesser rate as may be specified in the by-law”. (c) Accordingly, once the Board is satisfied that there is an appropriate Official Plan policy regime "dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement", a municipality is at liberty to set the rate at one hectare per 300 units or such lesser amount as it determines by by-law. It is only where the Board cannot be satisfied as a threshold matter that there is any appropriate policy regime dealing with the use of the alternative requirement that the municipality would not be at liberty to invoke section 42(3) at all, by virtue of not having satisfied the condition in section 42(4). In essence, it was the Town’s position that the language of the Act is clear on its face. The alternative rate can only be set by by-law, and not limited as a matter of Official Plan policy. Had it been the intent of the Act to authorize the imposition at the Official Plan stage of a cap on the alternative requirement at a lesser rate than that mandated by s. 42(3), or to require a municipality to provide a planning rationale at the Official Plan stage in order to preserve its right to enact a subsequent by-law imposing the statutorily authorized rate, the Act could and would have said as much. Instead, the Town contended, there is nothing in the Act which mandates those limitations on a municipality’s powers. At a more fundamental level, the issues engaged by the public debate about the alternative rate have more to do with the relative roles of the municipal council and the Board in land use planning matters, particularly as it relates to a local Official Plan and its implications for local land use policy decisions. It was the Town’s- 15 - contention that to impose on a municipality at the Official Plan stage a requirement for a land use planning analysis and rationale to justify a decision by a municipality to authorize the alternative rate mandated by the Act, or to preclude it from imposing that rate in the absence of such evidence at the official plan stage, would be to disregard the primacy of the policy discretion of the elected council in making those determinations. Such a requirement would effectively allow the Board to second-guess council’s policy determination and to pre-emptively fetter its discretion in advance of that determination, in circumstances where the by-law authorizing the alternative requirement under s. 42(3) was clearly not intended to be subject to an appeal at all. It would be an unintended, roundabout manner of imposing indirectly – at the official plan stage – a significant limitation on the scope of a municipality’s discretion, notwithstanding that the Legislature could have imposed such a limitation directly but did not do so. The Town further contended that since “Official Plans are not statutes and should not be construed as such”13, it would be inconsistent with that role and function for the Board to impose, as a matter of Official Plan policy, a specific alternative rate for parkland dedication which is less than that which the Legislature has expressly mandated municipal councils to impose. In effect, the Town contended, it would be tantamount to a statutory modification by the Board on a municipality-specific basis. However, in a decision rendered on November 5, 201214, the OMB concluded that it had jurisdiction to determine not only whether an alternative parkland rate should be used, but also what that alternative rate should be. In its decision, the Board effectively treated the actual words used in section 42(4) – i.e., policies “dealing with the use of the alternative requirement” – as if those words were interchangeable with policies “authorizing the alternative requirement” itself. As the Board stated, “to conclude that the use of an alternative rate can be explored at a hearing, but not the specific rate would, as [the appellants] argued, serve no useful purpose and unduly restrict the ability of the appellants to test the planning rationale for the Town’s policies as they relate to parkland dedication”.15 The Board concluded as follows: If the position taken by the Town is adopted, then there would be no ability or discretion for any municipal Council to set a specific rate in its official plan. The Board would effectively be directing that specific rates in official plans run afoul of s. 42 of the Act. Yet, some municipalities have chosen to set out alternative rates in both their official plans and implementing by-laws. In those instances, would municipalities be required to amend their official plans and remove specific rates? 13 Toronto (City) v. Goldlist Properties Inc., 2003 CanLII 50084 (ON CA); Bele Himmell Investments Ltd. v. Mississauga (City) (1982), 13 O.M.B.R. 17, 1982 CarswellOnt 1946 (Div. Ct.); R & G Realty Management Inc. v. North York (City),  O.J. No. 3358 (Div. Ct.) 14 Decision and Order of the Ontario Municipal Board, November 5, 2012 (Case No. PL110189) 15 ibid. at para. 17.- 16 - In the Board’s view, the Town is urging the Board to adopt an unduly restrictive interpretation of the Act which would result in limiting what can be included in the parkland dedication policies of any official plan. The provisions of s. 42 of the Act are not that restrictive. Simply put, when read together, s. 42(3) and s. 42(4) do not say that a specific rate cannot be identified in an official plan. The Board will not read such a restriction into the Act and thereby limit the flexibility of municipalities to determine what detail they wish to provide at the official plan level.16 The Town subsequently sought leave to appeal the Board’s decision on the preliminary motion to the Divisional Court. However, in May 2013 the leave application was dismissed as premature on the basis that any appeal from the Board’s decision should only be heard at the conclusion of the entire hearing, after a decision had been rendered on the actual parkland policies in section 3.1.817. This set the stage for the main Board hearing respecting the parkland policies which commenced in November 2013. Following the exchange of witness statements for the parkland policies hearing and after the hearing had commenced in November 2013, the Town reached settlements with certain appellants, by which they withdrew their Section 3.1.8 appeals. Moreover, over the course of the hearing the remaining appellants and the Town reached agreement on proposed modifications to several of the adopted policies contained in Section 3.1.8, all of which were ultimately approved by the OMB18. While the withdrawals and agreed upon 16 ibid. at para. 26 17 The Corporation of The Town of Richmond Hill v. Yonge Bayview Holdings Inc. et al., 2013 ONSC 2252 (Div Ct) 18 The settled policies (highlighted in yellow on Appendices ‘B’ and ‘C’) include the following: (a) 220.127.116.11 – authorizing the acquisition of parkland by certain means other than dedication under section 42; (b) 18.104.22.168(e) – uses that are exempt from a dedication/cash-in-lieu requirement; (c) 22.214.171.124(f) – where more than one use is proposed, the rate is to be determined on the basis of the predominant use; (d) 126.96.36.199(g) – the Town “may, at its discretion, accept the conveyance of off-site lands in fulfillment of parkland dedication requirements”; (e) 188.8.131.52(h) – specific criteria to be used by the Town in determining whether or to what extent it will require cash-in-lieu of dedication; (f) 184.108.40.206(k) - criteria for determining when the Town may give consideration to parkland dedication by stratified title, rather than fee simple; (g) 220.127.116.11(l) - reduction in parkland dedication or cash-in-lieu where the Town, “in its discretion, secures public access over privately-owned open space”; and- 17 - modifications assisted in narrowing the scope of matters subject to the hearing, the central issues - principally concerning the alternative rate, but a number of other matters as well - remained unresolved. The proposed policies and modifications which were urged upon the Board by the Town and the larger appellant group at the time final arguments were heard in May 2014 are attached as Appendices ‘B’ and ‘C’, respectively. In its Decision issued on January 15, 2015, the Board accepted the Town’s position on all of the contested issues other than the alternative rate issues. Specifically, the Board made the following determinations: (a) The actual policy language should be the version of section 3.1.8 as adopted and proposed to be modified by the Town; (b) The Board accepted the Town’s final position on the types of land suitable for parks, and confirmed that the municipality need not accept hazard lands or environmental lands in fulfillment of parkland dedication requirements; (c) The Board agreed with the Town that it is not necessary for the OP to include additional policies applicable specifically to parkland dedication associated with lands in the Oak Ridges Moraine Conservation Plan area; (d) In recognition of the Town’s development of a “sustainability metrics” program in concert with the Cities of Brampton and Vaughan, the Board would not require that Section 3.1.8 of the OP include policies to facilitate reductions in parkland dedication requirements for developments meeting specific sustainability criteria, as proposed by the appellants; (e) The Board rejected the appellants’ proposed policy directing that the Town “may accept the conveyance of any lands suitable for active or passive parks or other public recreational purposes in fulfillment of the parkland conveyance requirements under this section; and (f) The Board rejected the appellants’ position that the OP should contain a policy directing the Town to pass a by-law under section 42 implement the intent of the Board-approved section 3.1.8 policies within a specified period (4 months). However, when it came to the alternative rate issues, the Board’s decision generally favoured the position advocated by the appellants. In terms of the amount of information required to be included in OP policies if the alternative rate is being used, the Board held that the Town was required to implement OP policies that (h) 18.104.22.168 - criteria for determining credits for previous conveyances or cash-in-lieu under sections 42(7) and 42(9) of the Act.- 18 - include a sufficient level of detail to provide developers some level of certainty regarding the magnitude of the parkland requirement. In other words, the Board determined that it is not enough for an OP to specify a parkland dedication rate of “one hectare per 300 units” or “up to one hectare per 300 units.” If the alternate rate is to be used it must be explained and justified to some degree in the Official Plan itself. This aspect of the Board’s decision was not substantially in doubt, since it is essentially a reiteration of the same findings which the Board had already made on the Town’s 2012 preliminary motion, and the Town could therefore not contest it for purposes of the main hearing. In essence, the Board maintained its earlier determination that it had jurisdiction on an Official Plan appeal to impose policies mandating an alternative rate or cap which is less than the 1 hectare per 300 units prescribed by section 42 of the Act. The Board further held that where there is no agreement between a municipality and its stakeholders, “the extent to which the Board should go in fixing a particular rate will depend on the quality of the evidence, the planning merits and rationale provided to support a particular rate and most importantly, an assessment of what constitutes the correct balance between the competing interests” [emphasis added]. At the same time, however, the Board also found that “determining the ‘correct’ cap is not an exact science given the variables relied upon for any calculation”. The Board also found that the imposition of a cap “clearly has a significant effect on the costs per unit and the amount of parkland dedication payable to the Town”. On the specific alternative rate itself, the Board required the Town to implement a cap on its parkland dedication requirements equivalent to 25% of the area of the site to be developed, or its cash-in-lieu equivalent. Although the Board rejected the appellants’ position that the parkland dedication rate for the Town should be fixed at an amount less than one hectare per 300 units, and instead approved the OP policy of “up to one hectare per 300 units” as urged by the Town, the effect of imposing an overall cap of 25% (as noted below) is to reduce the parkland dedication rate to an amount significantly below one hectare per 300 units for all high-density development within the Town. Notably, none of the parties before the Board had advocated a cap of 25%. The rationale for setting the cap at 25% appears to have been determined by the Board itself, primarily on the basis of the following considerations: (a) it fell within a reasonable “range of the cash-in-lieu requirements generated by different percentage caps”;- 19 - (b) a doubling of the appellants’ proposed cap, to 30%, “would result in a dedication requirement that is within ranges charged elsewhere, but… at the high end of the range”. A 30% cap would also “bare [sic] a close relationship to the Town’s estimated parkland needs”. Nevertheless, “the percentage cap should be set, as a matter of official plan policy, below 30%, but higher than 15%”; (c) a 25% cap “would also result in cash-in-lieu obligations that would fall within the range of what has been received by the Town between 2007 and 2012”. Notably, that period predates the adoption of the Town’s Parks Plan in 2013 and the by-law which was adopted by Town Council to reflect and implement the standards in the Parks Plan; and (d) a 25% cap “provides some room for the Town to implement a sliding scale by by-law and provides some certainty for landowners that is not reflected in the Town’s proposed s. 22.214.171.124 which reflects a maximum alternative rate of ‘up to 1 ha per 300 units’”. On January 30, 2015, the Town served a Notice of Motion for leave to appeal the Board’s January 15, 2015 Decision to the Divisional Court. Among the issues raised on the proposed appeal are (i) the same jurisdictional issues which had been raised by the Town on its earlier leave application which was dismissed on grounds of prematurity, and (ii) the legality of imposing, as part of the alternative rate, a cap which is based on a percentage of site area (as contemplated by the standard rate authorized by section 42(1)) rather than on site density (as contemplated by the alternative rate under section 42(3)). As of the time of writing, the Town’s leave application remains pending. It is currently anticipated that the application will likely be heard in the summer or early fall of 2015. D. Implications of the Board’s Decision In the case of the Town of Richmond Hill, some of the immediate implications of the Board’s January 15, 2015 decision are clearly discernible. For other local municipalities who are faced with OMB appeals respecting their Official Plan parkland policies, or who may be embarking on such a policy review in the near future, the implications of the Board’s decision are less readily apparent. In Richmond Hill’s case, the Board’s decision will impact the parkland dedication requirements for all high density residential development, since the threshold density at which the 25% cap will apply is 75 units per hectare. However, for all development densities less than 75 units per hectare, the decision has no implications and the 1 hectare per 300 unit rate currently applicable pursuant to the Town’s in force parkland dedication by-law (By-law No. 58-13) would continue to apply.- 20 - The following table illustrates the effect of a 25% cap on land dedication relative to the 1 ha per 300 unit rate for development on a hypothetical 1 hectare site, at progressively higher densities: Parkland Dedication Requirement Development Density (units per ha) 1 ha per 300 units (ha) 25% site area (ha) 25 0.083 0.250 50 0.167 0.250 75 0.250 0.250 100 0.333 0.250 125 0.417 0.250 150 0.5 0.250 200 0.667 0.250 300 1.0 0.250 *applicable dedication requirement is highlighted As this table illustrates, the gap between the parkland dedication requirement at the 1 ha/300 units rate and under the 25% cap will increase as the density of development increases. Similarly, on a per-unit basis the effect of the 25% cap will be to diminish the amount of parkland dedication per unit. In finding merit with an overall cap, however, the Board appears to have accepted the appellants’ evidence that (i) in most highdensity development scenarios, the dedication requirement will be satisfied not by actual dedication, but rather by cash-in-lieu; and (ii) given that the valuation of a high-density development site is typically dependent on the level of density permissions, the per-unit cash-in-lieu payable will not in fact decrease significantly, since any decrease will be offset by the higher land valuation. In effect, the purpose of the cap, as contended by the appellants, was to ensure that the same unit on the same size development parcel pays substantially the same cash-in-lieu, regardless of whether it is part of a 300 unit development or a 600 unit development. In the absence of a cap, the evidence suggested, the same unit would pay substantially more in the latter scenario than the former. The appellants contended that on the one hand, this rendered it prohibitively expensive and thus operated as a disincentive to develop at higher densities, and on the other- 21 - hand, it was counterproductive from the standpoint of Provincial, regional and local policies promoting residential intensification in general and affordable housing in particular. The Town’s Parks Plan estimated that the Town would need 67.3 ha of land over the lifespan of the OP to meet its parkland needs. Over the course of the hearing the appellants identified some minor errors in the Parks Plan calculations, and it was agreed that the Town’s park land needs were more accurately stated as 63.9 ha. During the hearing staff also revised the total cash needs required by the Town for parks purposes and concluded that those needs could be met with funds totalling as much as approximately $250 million. On that basis, one potential outcome that could result from the 25% cap is a shortfall in the range of approximately $70 million from what may be required to meet the needs and service levels identified in the Town’s Parks Plan. Accordingly, if the Board’s decision stands that Plan will almost certainly need to be reevaluated or alternatively, other funding sources beyond section 42 will need to be identified and pursued. As far as other municipalities are concerned, the Richmond Hill decision represents the first time that the Board has held a contested hearing and determined that it can consider the alternative rate contemplated by section 42 of the Act, and impose a lesser rate or cap as a matter of Official Plan policy if it sees fit. Accordingly, to the extent that the Board may be bound by its own decisions on matters of jurisdiction and broad policy, its decision in this case will likely serve as a precedent on other OP appeals respecting parkland policies. Moreover, the Board’s decision also seems to place significant weight on the need to ensure that Richmond Hill’s parkland dedication rate is comparable to the rate charged by other area municipalities. Likewise, the Board’s decision will likely be relied upon to support the reasonableness of a cap in the range of 25% in other municipalities which face the same set of development pressures, cost factors and policy demands at the Provincial, regional and local levels as does the Town of Richmond Hill. Beyond that, what the future holds for other municipalities in the realm of parkland dedication is a matter for considerably greater speculation. As a practical matter, there are limited choices available to a municipality when it comes to funding sources for parks and recreational facilities. Except in very limited respects, the Development Charges Act, 199719 is not an option given that the “acquisition of land for parks” is 19 S.O. 1997, c. 27, as amended- 22 - specifically listed as an ineligible service under section 2(4) of that Act20. While section 37 of the Planning Act might be a useful tool in some scenarios, it has its obvious limitations given that the “facilities, services or matters” contemplated by that section are generally secured by agreement, and only where the municipality has committed to approving additional height or density in return for the agreed community benefits. From a realistic standpoint, the funding sources available to municipalities for parks and recreational facilities are thus few and far between. Ultimately, the only viable alternatives may be to look to user fees or the general revenues of the municipality (i.e. property taxes) for those purposes. Given the fiscal constraints faced by most municipalities when it comes to the politics and public appetite for increased taxes and user fees, however, those alternatives might prove to be viable in theory, but not in practice. In principle, there is some merit to the proposition that, like development charges, acquisition and maintenance costs for parks and recreational facilities should be borne by new development only to the extent that the development itself benefits from those facilities, as opposed to subsidizing existing residents. However, aside from the practical limitations associated with implementing that principle in the context of residential intensification within existing communities, in most urban municipalities there is a wide range and hierarchy of parks and recreation facilities ranging from local parkettes and urban squares to destination parks serving the entire municipality and beyond. One of the likely consequences is that new residential development – whether it consists of greenfield subdivisions, or high-density intensification with existing built-up areas – is bound to impact on parkland resources and service levels for existing communities. This will likely serve to heighten public resistance against increased taxes or user fees to augment existing facilities or even hold the line at current service levels. For the most part, it remains to be seen what the municipal response will be in each instance when it comes to satisfying the public need for parks and recreation facilities as a matter of good land use planning for complete communities. We thus come full circle to the conundrum identified at the outset of this paper: whether such facilities will be fully appreciated to the extent required politically and financially, or whether the result of such political and financial constraints will be that municipal parks and recreational facilities, and the public amenities they offer, will be taken for granted. 20 It should be noted that under section 1(1) of O. Reg. 82/98, this prohibition “does not include land for an enclosed structure used throughout the year for public recreation and land that is necessary for the structure to be used for that purpose, including parking and access to the structure”.