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_ Executive Committee
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PI KERIN
Report Number: FIN 17-15
Date: June 8, 2015
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: . 2014 Building Permit Stabilization Reserve Fund
Recommendation:
It is recommended that Report FIN 17-15 from the Director, Corporate Services & City
Solicitor regarding the 2014 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, 2014.
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.
FIN 17-15 June 8, 2015
Subject: 2014 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 $3.85 million.
Annual Report— Building Permit Fees
for the year ended December 31, 2014
Building Permit Revenue $1,302,585
Costs:
Direct Costs $ (1,674,689)
Indirect Costs (283,458) (1,958,147)
Excess (Shortfall) Revenue Over Costs $ (655,562)
Building Permit Stabilization Reserve Fund
Opening Balance, January 1, 2014 $ -
2014 Contribution
Closing Balance, December 31, 2014
Attachments: None
Prepared By: Ap• ov- •/Endorsed By:
Stan Karwowski Paul B
Division Head, Finance & Treasurer Directo , Corpor.te Services & City Solicitor
Recommended for the consideration
of Pickering City Council
SP/tkiell Yet, V, 2045
Tony Prevedel, P.Eng.
Chief Administrative Officer