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HomeMy WebLinkAboutFND-017-10~larg~ton Energizing Ontario REPQRT FINANCE DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: JUNE 21, 2010 Resolution #: ~f°~ ^ 38b'~/0 Report #: FND-017-10 File #: By-law #: Subject: BUILDING PERMIT FEES ANNUAL REPORT FOR 2009 Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report FND-017-10 be received for information; and 2. That existing building division fees be confirmed with no change required. Submitted by: Treasurer ~~ A. .Cannella, .E.T. Director of Engineering Services. NT/LG/hjl Reviewed by: ranklin Wu, Chief Administrative Officer CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1 C 3A6 T (905)623-3379 REPORT NO.: FND-017-10 BACKGROUND AND COMMENT: PAGE 2 1.0 Under the Building Code Act, 1992 and the passing of subsequent amendments and Ontario Regulation 350/06, municipalities are required to prepare an annual report that records the amount of building permit fees collected and the costs incurred during the process. Section 1.9 of Division C Part 1 of the Building Code Act specifies what is to be included in the annual report as follows: (1) The report referred to in Subsection 7 (4) of the Act shall contain the following information in respect of fees authorized under Clause 7 (1) (c) of the Act: (a) total fees collected in the 12-month period ending no earlier than three months before the release of the report, (b) the direct and indirect costs of delivering services related to the administration and enforcement of the Act in the area of jurisdiction of the principal authority in the 12-month period referred to in Clause (a), (c) a break-down of the costs described in Clause (b) into at least the following categories: (i) direct costs of administration and enforcement of the Act, including the review of applications for permits and inspection of buildings, and (ii) indirect costs of administration and enforcement of the Act, including support and overhead costs, and (d) if a reserve fund has been established for any purpose relating to the administration or enforcement of the Act, the amount of the fund at the end of the 12-month period referred to in Clause (a). (2) The principal authority shall give notice of the preparation of a report under Subsection 7 (4) of the Act to every person and organization that has requested that the principal authority provide the person or organization with such notice and has provided an address for the notice. 1.1 The requirement to issue an annual report on building permit fees came into effect for the 2006 year which means the first report was required by March 31, 2007. It is unclear in the regulations as to how the annual report is to be reported; i.e. via Council meeting, newspaper advertising, municipal website, etc. 1.2 In accordance with the Building Code Act as amended, staff have prepared this report to Council on an informational basis and Attachment "A" will be posted on the municipality's website in June 2010. 1.3 On the Attachment "A" for the summary of the 2009 Annual Report for Building Permit Fees, the total of the direct and indirect costs exceeds the total building permit fees revenue by $835,499. During the 2009 year, the Engineering REPORT NO.: FND-017-10 PAGE 3 Department advised Council through the monthly building permit activity report that the building permits issued in 2009 were significantly down in comparison to the 2008 year. The total number of all types of building permits issued in 2009 was 643 compared to 950 in 2008 which translates into a 32% decrease in 2009. The total number of new residential building permits issued in 2009 was 273 compared to 593 in 2008 which translates into 54% decrease in 2009. This over expenditure is included in the overall year end results for 2009 as reported in FND-006-10 Financial Update as at December 31, 2009. Council also addressed the shortfall in building permit revenues in CAO-004-09, Report on the Status of the 2009 Budget Shortfall and Proposed Remedial Measures. CONCLUSION: 2.0 During 2010, staff will be reviewing and updating the building fee financial analysis model used to verify that the rates charged are reasonable. The current model has been in place for five years and requires updating. 2.1 Staff will report back in the fall on the outcome of the update. 2.2 In light of the upcoming review, staff recommend that the current fee structure in the municipal by-law for the building permit fees By-Law Number 2005-145 remain status quo for 2010. 2.3 Attachment "A" is a summary of the 2009 building permit fees revenue and related expenditures with the expenses broken down into direct and indirect costs along with the balance of the building division reserve fund and reflects that the total amount of the fees do not exceed the costs to administer and enforce the Act. Attachments: Attachment "A": Summary of 2009 Building Permit Fees Revenue & Expenditures ATTACHMENT "A" MUNICIPALITY OF CLARINGTO'.~l Building Permit Pee Annual Report for 2009 TOTAL FEES: Total Building Permit fees collected during 2009 year under the Municipality of Clarington's Bylaw Number 2005-145 is $814,942.00 DIRECT COSTS: Direct casts are deemed to include the costs of the Building Division of the Engineering Department for the processing of building permit applications, the review of building plans conducting inspections and building-related enforcement duties. Total Direct Costs: $1,117,457.00 INllIRECT COSTS: Indirect costs are deemed to include the costs for support and overhead services to the Building Division. Total Indirect Costs: $>32,984.00 SUMMARY: Grand Total of Direct and Indirect Costs: $1,60,441.00 Costs over Revenue as of December 31, 2009 - $835,499.00 STATEMENT OF RESERVES: Building Division Reserve Fund balance as of December 31, 2009 - $145,987.00 NO"f E: Unaudited Figures.