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HomeMy WebLinkAboutFND-005-13 �11HIbIZllld�IIL7l'10 REPORT FINANCE DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: APRIL 8, 2013 Resolution #: -2— Report#: FND-005-13 File #: By-law #: Subject: BUILDING PERMIT FEES ANNUAL REPORT FOR 2012 Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report FND-005-13 be received for information. f Submitted by: ., �� �' �' '` Reviewed by: Nancy T lor, , BA, CPA, CA Franklin Wu, Director of Finance/Treasurer Chief Administrative Officer A. Cannella, C.\E.T. Director of Engineering Services NT/LG CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 REPORT NO.: FND- 005 -13 PAGE 2 BACKGROUND AND COMMENT: 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. 1.1 Division C Part 1 Section 1.9 of the Building Code 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. 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 April 2013. 1.3 On Attachment "A" for the summary of the 2012 Annual Report for Building Permit Fees, the total building permit fees revenue is lower than the total of the direct and indirect costs by $1,323 which is insignificant for an adjustment. REPORT NO.: FND- 005 -13 PAGE 3 1.4 As the Building Division reserve fund was drained during the 2008 to 2010 period as a result of the poor economic conditions, an additional transfer of $200,000 was made in 2012 to try to put this reserve fund back on a more sound footing for coming years. The fact that, for 2012, the revenue is lower than the costs by $1,323 is not of significant concern for an adjustment to be done. 1.5 In December 2011, the building permits increased significantly due to the effect of the building code change effective January 1, 2012. 1.6 During the 2012 year, the Engineering Department advised Council through the monthly building permit activity report that the building permits issued in 2012 were going to be lower in comparison to the 2011 year. 1.7 The total number of all types of building permits issued in 2012 was 1,056 compared to 1,188 in 2011 which translates into 11% decrease in 2012. 1.8 The total number of new residential building permits issued in 2012 was 536 compared to 863 in 2011 which translates into 37.9% decrease in 2012. 1.9 The below graph illustrates the number of permits for all types and new residential for the last 7 years. The 2010 figures are more in line with the pre 2007 figures. The 2011 figure is unusually high due to the effect of the building code change effective January 1, 2012. The activity in 2012 reverts to the pre 2007 figures. #of Permits 1400 1200 1045 1000 300 600 400 200 0 Building Permits 1138 6 All types of Permits 2006 2007 2008 2009 2010 2011 2012 Year • New Residential Permits REPORT NO.: FND- 005 -13 PAGE 4 CONCLUSION: 2.0 Attachment "A" is a summary of the 2012 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. It also reflects that the total amount of the permit fees is lower than the costs to administer and enforce the Building Code Act. This small deficit is immaterial for an adjustment from the Building Division reserve fund. 2.1 It is not necessary to adjust the building fees as the Building Fees By -Law #2011 -036 contains a clause to increase building fees by three (3) percent annually effective January 1st each year. 3.0 CONCURRENCE — not applicable CONFORMITY WITH STRATEGIC PLAN — The recommendations contained in this report conform to the general intent of the following priorities of the Strategic Plan: Promoting economic development X Maintaining financial stability Connecting Clarington _ Promoting green initiatives Investing in infrastructure _ Showcasing our community Not in conformity with Strategic Plan Staff Contact: Nancy Taylor, BBA, CPA, CA, Director of Finance /Treasurer Attachments: Attachment "A ": Summary of 2012 Building Permit Fees Revenue & Expenditures ATTACHMENT A REPORT FND- 005 -13 MUNICIPALITY OF CLARINGTON Building Permit Fee Annual Report for 2012 REVENUES Total Building Permit fees collected during 2012 year under the Municipality of Clarington's Bylaw Number 2011 -036, as amended is $1,901.801. TOTAL REVENUES: $1,901,801. EXPENSES Direct Costs: Direct costs 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: $1,236,320. Indirect Costs: Indirect costs are deemed to include the costs for support and overhead services to the Building Division. Total Indirect Costs: $466,804. Transfer to Reserve Fund: $200,000. TOTAL EXPENSES: $1,903,124. Deficit as of December 31, 2012: $1,323. STATEMENT OF RESERVE FUND: Building Division Reserve Fund balance as of December 31, 2012 is $620,957. NOTE: Unaudited Figures.