HomeMy WebLinkAboutCS 12-08
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REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 12-08
Date: March 17, 2008
1 59
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
2007 Building Permit Stabilization Reserve Fund
Recommendation:
That Report CS 12-08 of the Director, Corporate Services & Treasurer 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 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, 2007.
Provincial legislation requires an annual report on this fund be presented to Council.
Sustainability Implications:
implications.
This report does not contain any sustainability
Background: In December 2005, Council approved report PO 41-05, which enacted
a new building permit process and fees under the Provincial Building Code Statue Law
Amendment 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 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.
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Report CS 12-08
Date: March 17, 2008
Subject: Building Permit Stabilization Reserve Fund
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Page 2
The Building Code Act requires that an annual report be prepared including total fees
collected in the previous 12 month period, a summary of indirect and direct costs of
delivering the service.
The following statements indicate that expenses exceeded revenues and therefore
there was no transfer to the reserve fund as required by the Act.
Annual Report - Building Permit Fees
For the year ended December 31, 2007
Building Permit Revenue
$ 936,519
Costs:
Direct Costs
Indirect Costs
($1,142,117)
(201,244)
(1,343,461)
($ 406,942)
Excess (Deficit) Revenue Over Costs
BUILDING PERMIT STABILIZATION RESERVE FUND
Opening Balance, January 1,2007
$
2007 Contribution
Closing Balance, December 31,2007
$
In 2006, the costs (direct & indirect) exceeded the building permit fee revenues and
therefore, no transfer was made to the building permit stabilization reserve fund. For
2007, the similar situation occurred. The cumulative operating deficit for the years 2006
and 2007 is $992,955 and staff will explore this year the possibility of having the
cumulative deficit amount charged against future years building permit excess
revenues. The primary reason for the shortfall is that building permit activity has fallen
short of the levels projected in the original study. Staff will be reviewing these projected
levels and the building permit fee itself in conjunction with the forthcoming Development
Charge Study.
Attachments: None
Report CS 12-08
Date: March 17,2008
Subject: Building Permit Stabilization Reserve Fund
Page 3
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Prepared By:
Approved I Endorsed By:
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Gillis A. Paterson
Director, Corporate Services & Treasurer
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Stan Karwowski
Manager, Finance & Taxation
GAP:sk
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City Council
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