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HomeMy WebLinkAboutFIN 12-13C-dy °¢ Report to Executive Committee PICKERING Report Number: FIN 12 -13 Date: May 13, 2013 From: Paul Bigioni Director, Corporate Services & City Solicitor Subject: 2012 Building Permit Stabilization Reserve Fund Recommendation: It is recommended that Report FIN 12 -13 from the Director, Corporate Services & City Solicitor regarding the 2012 Building Permit Stabilization Reserve Fund be received for information. Executive Summary: Section 7(4) of the Building Code Act requires that "every 12 months each principal authority shall prepare a report ... of building fees and related costs." This Reserve Fund was established under that Act and this report provides this information. Financial Implications: This report contains information pertaining to the financial status of the Building Permit Stabilization Reserve Fund as at December 31, 2012. Provincial legislation requires an annual report on this fund be presented to Council. Discussion: In December 2005, Council approved report PD 41 -05, which enacted a new building permit process and fees under the Building Code Act or Bill 124. The premise of Bill 124 was the requirement that municipalities will no longer be able to subsidize planning services or other City areas through building permit fees._ C.N. Watson 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, the consultant recommended a small increase in building permit fees to provide for cost recovery and to establish 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. The Building Code Act requires that an annual report be prepared that includes total fees collected in the previous 12 month period and a summary of indirect and direct costs of delivering the service. Report FIN 12 -13 May 13, 2013 Page 2 The following statements indicate that expenses exceeded revenues and therefore there was no transfer to the reserve fund as required by the Act. Due to the relatively low rate of development since the fund was established in 2006, the accumulated shortfall for this reserve fund is approximately $2.80 million. Annual Report — Building Permit Fees for the year ended December 31, 2012 Building Permit Revenue $1,636,117 Costs: Direct Costs $ (1,470,372) Indirect Costs (254.871) (1,725,243) Excess (Shortfall) Revenue Over Costs $ ( 89,126) Building Permit Stabilization Reserve Fund Opening Balance, January 1, 2012 $ 2012 Contribution Closing Balance, December 31, 2012 $ Attachments: None Prepared By: Stan Karwowski (Acting) Division Head, Finance & Treasurer Recommended for the consideration of Pickering City CouAcil , , Tony Prevedel, P.Eng. Chief Administrative Officer dorsed By: Paul Bigioni�\ Director, Co orate ervices & City Solicitor 1.;0, 201;