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HomeMy WebLinkAboutFIN 03-23 Report to Council Report Number: FIN 03-23 Date: January 23, 2023 From: Stan Karwowski Director, Finance & Treasurer Subject: 2023 User Fees File: F-2000-001 Recommendation: 1. That Council approve the attached General Municipal Fees and Charges By-law to amend By-laws 6191/03 and 7362/14, and incorporate User Fee Schedule I into the 2023 Current Budget; 2. That Council authorize the Director, Finance & Treasurer to increase the budget for the Access to Recreation grants from $30,000 to $60,000, to be funded from the Casino Reserve; and 3. That the appropriate City of Pickering officials be given authority to take the necessary actions to give effect thereto. Executive Summary: User Fees are an important revenue source for the City of Pickering and help to cover all or some of the cost of delivering customer-specific services like recreational programs, licenses and processing of development applications. These fees benefit the community by taking pressure off the tax rate, while ensuring that the City is able to continue to provide the high levels of service our customers expect. Historically, the City has brought forward the recommended User Fees with the Current Budget, but because the 2023 budget will not be considered by Council until April, these fees are being brought forward early to allow for implementation as of February 1, 2023. Before recommending 2023 User Fees, staff undertook a community engagement process to ensure that the needs, expectations and concerns of our residents were understood. The draft 2023 User Fees were posted on the City’s website in early December for residents to review and provide comments through the User Fee survey. The City received 86 survey responses and a summary of the results is included in Attachment 1. City staff reviewed the current schedule of User Fees and determined that a general increase in fees of two percent is recommended for 2023 to address City cost pressures including: higher wages, inflationary increases, increased costs for utilities and higher costs for equipment purchases and maintenance , all while being sensitive to the affordability needs of FIN 03-23 January 23, 2023 Subject: 2023 User Fees Page 2 the community. The proposed 2023 User Fee & Charges Schedule is included in Attachment 2. The modest two percent increase allows the City to recover some of the increased operating costs arising from the unusually high inflation rate of over six percent currently being experienced across the province. In specific areas such as Planning & Development, fees have been further increased to move the service closer to full cost recovery and to reduce property tax subsidization of those services. Financial Implications: The revised User Fees will be incorporated into departmental budgets through the 2023 budget development process. The financial impact will be determined and presented with the 2023 Current Budget. Revenue increases calculated through this process will help offset a portion of the cost increases for service delivery that would otherwise require a higher increase to the 2023 tax levy. Discussion: As part of its commitment to engagement, accountability, and transparency, in respect of the 2023 Budget, City staff engaged the community to capture their views on the proposed 2023 User Fees Schedule. This was the first phase of the 2023 budget engagement plan running from December 8, 2022 to January 3, 2023. Community Engagement The City used a broad and diverse mix of owned and paid communications channels including Pickering News Advertiser Community page, digital community billboards, website and social media, and targeted email marketing to groups like ActiveNet registrants. Static curbex boulevard signs and a short explainer video for social media were also used. Social media results included:  Instagram – 4,437 reached  Facebook – 20,579 reached  Twitter – 727 reached On the Let’sTalkPickering.ca/budget project page, a survey was made available. The page generated 1,300 visits and 86 respondents. While 86 responses may not be viewed as being a statistically significant response rate, staff did consider the responses and comments carefully in determining the recommended 2023 User Fees. Not surprisingly, a theme identified in the survey responses was the impact of fee increases on accessibility (see Questions 4 and 5 in Attachment 1), particularly for our more vulnerable communities such as seniors, youth and persons with disabilities. The City shares these concerns and has implemented programs specifically designed to support those in need and to ease financial barriers to participation, including: FIN 03-23 January 23, 2023 Subject: 2023 User Fees Page 3  Access to Recreation assistance program;  discounted and free seniors & youth programming;  room rental reductions for community groups; and  community grants program. For additional information, including links to the City’s web pages and information on accessing these programs see Attachment 3. Some users also indicated a desire for the Waterfront Parking fees to be reviewed. Staff note that these fees were implemented to provide residents better access to the waterfront and to resolve parking issues that have been increasing over the last 3-5 years. The paid parking fees charged for non-resident parking at the waterfront are currently under review and will be brought forward to Council through Report to Council in the first quarter of 2023. Fee Recommendations In determining the recommended User Fees for 2023, staff considered:  public engagement survey and customer feedback results;  current market conditions, including benchmarking against other area municipalities;  demand for service;  cost of service delivery; and  inflation. Recovery of costs associated with the delivery of services and programs, and ongoing maintenance of the facilities and equipment is an underlying principle of User Fees. The impact of inflation on the City’s costs is a particular concern in 2023. The province has experienced historically high levels of inflation, with CPI for our area topping six percent throughout 2022. The City’s cost for salaries, materials, utilities and building maintenance have all been impacted by these increases, putting pressure on both user fees and the tax levy. Recognizing the importance of affordability to our community, staff recommend a balanced approach, with the general User Fee increase for 2023 being held to two percent. This recommendation aligns with the survey feedback, in which users were split between the desire to recover the cost of service delivery and the need to contain costs for community users. To provide resources for even greater financial support to the community, st aff further recommend that the Access to Recreation budget be increased by $30,000 from $30,000 to $60,000 in 2023. These financial assistance grants ensure that the support is provided to those in need while also ensuring that City User Fees are reflective of the cost to deliver the services. Recreation User Fee Study To further understand the best structure for the City’s recreation User Fees, the Recreation & Parks Master Plan recommended that the City undertake a Recreation User Fees Study. As FIN 03-23 January 23, 2023 Subject: 2023 User Fees Page 4 per Resolution #23/22, Pickering Council awarded this consulting engagement at the December 5, 2022 meeting of Council. The City of Pickering’s Recreation User Fee Study will allow the Community Services Department to demonstrate the development of fair a nd transparent rates, and equitable access to all services. The development of a pricing policy will serve to offer a defensible rate and fee schedule for programs and services and as well to ensure the overarching principles are supported by the community. This is a significant undertaking given that there are hundreds of programs and services offered by Community Services. This project addresses the need for the City to ensure that recreation, museum, and special event fees reflect the cost to provide the services, and that lower cost recovery levels reflect the social values of the community. The Recreation User Fee Study is expected to be completed by fall of 2023. City Development Fees There is a general principle in municipal planning and finance that all development application fees (inclusive of Building and Planning) should recover the City’s cost for reviewing those applications. The intent is to avoid having the existing tax base (residents and business owners) subsidize the costs to the City incurred from new development. Watson & Associates Economists Ltd. (Watson) was retained by the City to complete a comprehensive update to the development approval application process fees. One of the objectives of Watson’s review wa s to determine the fee increases necessary to achieve full cost recovery. Based on Watson’s review, the City’s building permit application fees, as proposed, are intended to have full cost recovery. These Building Services fees, on average, have increased roughly 5 percent over those of the previous year. This is in response to inflationary increases seen on a global level, where in Canada we saw an increase of 8.1 percent at its height during the summer months. This increase is anticipated to address cost-of-living increases. Excluding City-initiated applications, Minor Variance, and Land Division applications, which are not intended to achieve cost recovery, the City’s current planning application fees only recover 78 percent of the costs of staff’s review of these development application files. The proposed fee increases included in Attachment 2 of this report will move the City’s fees for reviewing Planning Act applications closer to full cost recovery. Excluding Minor Variance, Land Division, and City-initiated applications, cost recovery performance will increase from 78 percent to almost 95 percent. For Official Plan Amendments, the move to full cost recovery was considered too great to be implemented through a one-time increase. Therefore, a more moderate fee increase is recommended at this time. Similarly, staff recommend not recovering the full cost for Minister Zoning Order Amendments, as these fees may be overly burdensome on residents that live in areas under these regulations. Details of the pr oposed fee increases are contained in Watson’s Planning Application Fee Review – Update Study, which was attached to Report to Council PLN 47-22, and summarized in Table 1 below. FIN 03-23 January 23, 2023 Subject: 2023 User Fees Page 5 Table 1 - Current and Proposed Cost Recovery by Application Type Application Type Current Cost Recovery Proposed Cost Recovery Subdivision 53% 100% Condominium 82% 100% Official Plan 37% 69% Zoning By-Law Amendment 89% 100% Site Plan 98% 100% Minor Variance and Land Division 11% 15% City Initiated Applications 0% 0% These fee increases are necessary if the City wants to ensure that the application and review fees better reflect the City’s costs for reviewing development applications. The alternative will be to shift a greater portion of the cost for reviewing development applications onto Municipal tax assessment revenue. Attachments: 1.User Fee Survey Results 2.Proposed 2023 User Fees & Charges 3.Community Support Programs 4.Draft By-law to Confirm General Fees & Charges 2023 Prepared By: Approved/Endorsed By: Danna Munns James Halsall Senior Budget & Financial Analyst Division Head, Finance Stan Karwowski Director, Finance & Treasurer Original Signed By:Original Signed By: Original Signed By: FIN 03-23 January 23, 2023 Subject: 2023 User Fees Page 6 Recommended for the consideration of Pickering City Council Marisa Carpino, M.A. Chief Administrative Officer Original Signed By: Attachment #1 to Report FIN 03-23 Survey Summary Question 1 Many City services enjoyed by the community are funded from property taxes. There are however some services that provide direct benefit to an individual, group, or business, rather than the community as a whole, and as such, the City charges a user fee directly to the individual or organization benefiting from the service. This means the in dividual/organization enjoying the service, pays for the service. Based on the Draft 2023 User Fee Schedule and information provided on the project page, do you believe you have a good understanding of how user fees are used? Answer (86 responses) 57% of respondents believe they have a good understanding of how user fees are used Question 2 Is it fair for Pickering taxpayers to subsidize various user fees that other residents have to pay in order to participate in City-run programs and activities such as gym memberships, art lessons, music lessons, and more? Answer (86 responses) Respondents were evenly split on in their view of the fairness of taxpayers subsidizing user fees. Question 3 Do you support the City increasing user fees annually based on the rate of inflation? Answer (86 responses) Slightly more than half of respondents believe that the City should increase rates based on inflation. Question 4 It is important to be fair with user fees and costs. Therefore, the individual directly benefiting from a City service is the one paying for that service. Do you feel that any user fees should be exempt from cost recovery? If yes, please list the fees and why. Answer (86 responses) 66% of respondents indicated that no user fees should be exempt from cost recovery. If yes, please list the fees and why. User fees that impact seniors or youth, or persons with a disability Not for profit community groups Swimming lessons – both youth and seniors Community Centre/Recreation fees See Attachment 2 for description of current City community support programs. Question 5 After reviewing the Draft 2023 User Fee Schedule, please provide any additional feedback you have. General response themes included: Importance of promoting accessible youth programs Consider breaks for low income/financially troubled families Fees for gym and other recreation programs seem high Consider removing or reducing Waterfront Parking See Attachment 2 for description of current City community support programs. Attachment #2 to Report FIN 03-23 Schedule I Attachment #3 to Report FIN 03-23 Community Support Programs Access to Recreation: The City’s Access to Recreation Policy minimizes financial barriers to participation. This policy is designed to ensure residents have full participation in recreation programs and services regardless of their income status. Low income residents who are eligible for assistance include those already receiving social assistance from Durham Region, households whose income is below the Low-Income Cut-Off, residents over the age of 65, and persons with disabilities. Funding for this program is provided from a number of sources including the City of Pickering, Durham Region, and the Canadian Tire Jumpstart Program. In addition to the Access to Recreation Policy, where there are three or more children in the same family taking part in the same program, the third child will be charged half price. Discounts apply to the lower priced program within the current session. This includes registrations for swimming lessons and summer camps. Seniors Programming: The City offers a variety of free and discounted programs for Seniors. Current City of Pickering programs and events for Seniors 55+ can be found online at https://www.pickering.ca/en/adults-55-plus.aspx. A number of programs and events such as the Seniors Centre Without Walls, Spotlight Series and Active Living fair are free of charge, while other registered programs are offered at a lower rate than comparative adult programs. The city also partners with a number of Seniors Clubs and Groups such as the South Pickering Seniors, Rougemount Seniors and Claremont Golden Age Seniors Club. Each of the clubs offers a wide variety of free or low-cost programs in City of Pickering facilities. https://www.pickering.ca/en/living/adults-55-plus-resources.aspx Adults over 65 years receive a 50% rate reduction on memberships at the Recreation Complex. Youth Programming: Current City of Pickering programs and events for Youth can be found online at https://www.pickering.ca/en/teen.aspx. A large number of programs and events are free of charge, including Skateboard pop ups, Basketball, Volleyball, Breakdancing and Improv while other registered programs are offered at a lower rate than comparative adult programs. Memberships are offered at a significant discount to the adult fees. Not For Profit Community Groups: Community groups and community sport organizations have reduced rentals rates to ensure their affordable access to our facilities. Community Grants Program: Each year the City of Pickering accepts grant applications from local non-profit community groups who provide programs, services and events to Pickering residents. In 2022, $77,500 was provided to various community organizations through this program. Information about this program can be found online at https://www.pickering.ca/en/city-hall/CommunityGrants.aspx Attachment #4 to Report FIN 03-23 The Corporation of the City of Pickering By-law No. 7983/23 Being a by-law to amend By-law No. 6191/03 and 7362/14 to confirm General Municipal Fees Whereas the Council of the Corporation of the City of Pickering enacted By-law 6191/03, as amended, on October 14, 2003 to confirm general municipal fees. Whereas Schedule “I” to By-law 6191/03 was updated and replaced under By-law, 6338/04, By-law 6519/05, By-law 6652/06, By-law 6677/06, By-law 6748/07 By-law 6857/08, By-law 6951/09, By-law 7032/10, By-law 7119/11, By-law 7194/12, By-law 7268/13, By-law 7339/14, By-law 7411/15, By-law 7478/16, By-law 7542/17, By-law 7605/18; By-law 7679/19; By-law 7740-20, 7823/21 and 7918/22; Now therefore the Council of the Corporation of the City of Pickering hereby enacts as follows: 1.Schedule “I” to By-law Number 6191/03, as amended, is hereby deleted and Schedule “I” attached hereto is substituted therefore. 2.Schedule “B” to By-law Number 7362/14, as amended, is hereby deleted and replaced with City Development building fees included in Schedule “I”. By-law passed this 23rd day of January, 2023. __________________________________ Kevin Ashe, Mayor __________________________________ Susan Cassel, City Clerk