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Report To
Executive Committee
Report Number: CST 21-11
Date: May 9, 2011
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2010 Building Permit Stabilization Reserve Fund
Recommendation:
That Report CST 21-11 from the Director, Corporate Services & Treasurer regarding
the 2010 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 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, 2010.
Provincial legislation requires an annual report on this fund be presented to Council.
Sustainability Implications: This report does not contain any sustainability
implications.
Background: In December 2005, Council approved report PD 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,
R8eDort CST 21-11 Date: May 9, 2012
Subject: 2010 Building Permit Stabilization Reserve Fund Page 2
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 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. Due to the relatively
low rate of development since the fund was established in 2006, the accumulated
shortfall for this reserve fund is approximately $2.7 million.
Annual Report - Building Permit Fees
For the year ended December 31, 2010
Building Permit Revenue
Costs:
$1,074,592
Direct Costs $(1,162,411)
Indirect Costs (232,105) (1,394,516)
Excess (Shortfall) Revenue Over Costs
$(319,924)
Building Permit Stabilization Reserve Fund
Opening Balance, January 1, 2010 $ -
2010 Contribution
Closing Balance, December 31, 2010 $ -
As part of the 2011 Current Budget, Council approved the undertaking of a study to
review building permit fees and the status of this reserve fund. The firm of Watson &
Associates will be retained to assist staff in completing the study. It is anticipated a
report will be presented to Council late in 2011.
Attachments: None
Report CST 21-11
Subject: 2010 Building Permit Stabilization Reserve Fund
Page 3 88
Prepared By:
Approved / Endorsed By:
Stan Karwowski Gillis A. Paterson
Manager, Finance & Taxation Director, Corporate Services & Treasurer
S K/vw
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering 'ty Council
26t L011
Tony Prevedel, P.Eng.
Chief Administrative Officer
Date: May 9, 2012