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;