A servicing agreement is a legal agreement between a property owner and the municipality to extend or modify municipal services within the municipal road allowance in order for a site to be developed.
Servicing agreements are typically required where a property does not have direct access to a required municipal service such as a sanitary sewer, storm sewer, watermain or opened municipal roadway.
Typically, a servicing agreement is used to ensure the proper implementation and construction of municipal services within the municipal roadway according to city and provincial standards.
Prior to application, one of the first steps in the development process for any potential project is to contact the local authority to gather information about land use regulations and the availability of municipal services.
The developer's consultants/engineers will review the information, make any additional inquiries, prepare a preliminary design proposal for the developer and identify any possible development constraints. During this point in the development process, the feasibility of extending municipal services will be examined and the appropriate authority contacted. Municipal services normally include sanitary sewers, watermains, storm sewers, roads and accesses to municipal roads.
To start the process, a letter is required from the developer/owner requesting to enter into a servicing agreement with the City for the purpose of developing a site. Payment of the appropriate fee as per the current City schedule of rates and fees is also required. As part of the submission, the applicant shall provide drawings prepared and stamped by a Professional Engineer registered in Ontario.
City engineering staff will review the drawings and request any additional information and/or revisions as necessary.
Once the drawings are acceptable to the City Engineer, the applicant will be advised to obtain any additional approvals from outside agencies, such as the Ministry of Transportation, Ministry of the Environment, Niagara Region, Niagara Peninsula Conservation Authority, Niagara Escarpment Commission, etc.
The applicant shall provide a cost estimate for the proposed works.
A draft agreement will be prepared by City staff and forwarded to the applicant for review and endorsement.
Once the servicing agreement is signed and appropriate approvals, securities and inspection fee amounts received, the agreement will be presented to City council for approval. City legal staff will then register the agreement on title.
Before construction begins, a pre-construction meeting is held with City staff, the developer/owner, agent, developer's consultants/engineers and contractor.
After the construction is completed to the satisfaction of the City Engineer, consideration to release the securities can begin.
Securities and inspection deposit amounts will be determined by the City based on the cost estimate and scope of work.
As per the Construction Lieu Act, after 45 days from completion and the receipt of a statutory declaration, the amount of securities held in this regard may be released.
Once the project is completed to the satisfaction of the City Engineer, including all reinstatement works, securities will be held for a one-year maintenance period, starting the day of completion.
The inspection deposit account will be balanced, any surplus amounts will be refunded and any outstanding amounts shall be paid to the City before the security amount will be released.
After the one-year maintenance period has expired, the project will be re-inspected and the remaining securities released upon acceptance by the City Engineer.
The above procedure is an example of the steps involved in a typical servicing agreement and can change depending on the type and scope of the project.