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HomeMy WebLinkAboutFIN 19-14 city, co = Report to Executive Committee PICKERING Report Number: FIN 19-14 Date: July 7, 2014 From: Paul Bigioni Director, Corporate Services & City Solicitor Subject: 2013 Building Permit Stabilization Reserve Fund Recommendation: It is recommended that Report FIN 19-14 from the Director, Corporate Services & City Solicitor regarding the 2013 Building Permit Stabilization Reserve Fund be received for information. Executive Summary: Section 7(4) of the Building Code Act (the "Act") requires the City to prepare an annual report of building permit and inspection fees and related administrative and enforcement costs. This Report fulfills the requirements of section 7(4) of the Act. This Report also contains information about the City's Building Permit Stabilization Reserve Fund. Financial Implications: This report contains information pertaining to the financial status of the Building Permit Stabilization Reserve Fund as at December 31, 2013. Discussion: In December 2005, Council approved report PD 41-05, which enacted a new building permit process and fees under the Act. The Act requires permit fees to be accounted for, and not used to subsidize City functions other than administration and enforcement of the Act and the Ontario Building Code. Watson & Associates Economists Ltd. was retained to undertake a comprehensive analysis of all Planning & Development service costs, fees and legislative requirements and to develop an Activity Based Costing (ABC) model for the City. Using this information, Watson recommended a small increase in building permit fees to provide for cost recovery and establishment of a building permit stabilization reserve fund. The purpose of this reserve fund is to provide a source of funds for current operating budget costs during an economic downturn to offset lower building permit revenues. Without such a reserve fund, reduced growth and permit volumes during a downturn could result in severe budgetary pressures which could impair the City's ability to enforce the Act and the Building Code. The Act requires that an annual report be prepared that includes total fees collected in the previous 12 month period and a summary of directly and indirectly related administrative costs. . 384 Report FIN 19-14 July 7, 2014 Subject: 2013 Building Permit Stabilization Reserve Fund Page 2 The following statements indicate that expenses exceeded revenues and therefore the Act did not require any transfer to the reserve fund. Due to the relatively low rate of development since the fund was established in 2006, the accumulated shortfall for this reserve fund is approximately $3.2 million. Annual Report— Building Permit Fees for the year ended December 31, 2013 Building Permit Revenue $1,354,207 Costs: Direct Costs $ (1,595,291) Indirect Costs (258,302) (1,853,593) Excess (Shortfall) Revenue Over Costs $ (499,386) Building Permit Stabilization Reserve Fund Opening Balance, January 1, 2013 $ - 2013 Contribution Closing Balance, December 31, 2013 $ - Attachments: None Prepared By: Approved / Endorsed By: IP Stan Karwowski Paul Bigioni Division Head, Finance &Treasurer Director, Corpor.: .ces & City Solicitor Recommended for the consideration of Pickering Ci • ouncil � I jc.ote ZO ao/4. Tony Prevedel, P.Eng. Chief Administrative Officer • 385