Report to: Development Services Date Report Authored: February 1, 2011
SUBJECT: Proposed Amendments to Development Fee and Building Fee By-laws
Development Services Commission
PREPARED BY: Tim Moore, Director of Building Standards, Ext. 4712
Jamie Bosomworth, Manager of Strategy and Innovation, Ext. 2180
RECOMMENDATION:
1) That the Report titled “Proposed Amendments to Development Fee and Building Fee By-laws”, Development Services Commission, dated February 1, 2011 be received.
2) And that the proposed amendments be referred to a Public Meeting of Development Services Committee, to be held on February 22, 2011;
3) And that Staff be authorized and directed to do all things necessary to give effect to this resolution.
1. Purpose 2. Background 3. Discussion 4. Financial
PURPOSE:
The purpose of this report is to propose amendments to Development Fee By-law 211-83 respecting development applications and Building By-law 2009-160 respecting construction, demolition and change of use permits, inspections and related matters. These by-laws set fees to be paid by direct users of Town development and building standards services, and are reviewed and updated on an annual basis. This report is to refer the proposed amendments for 2011 to a Public Meeting of Development Services Committee, to be held on February 22, 2011.
BACKGROUND:
The
Development Fee By-law and the Building By-law are amended each year to recover
the reasonable costs associated with the administration of the Planning Act (development applications)
and the Building Code Act (building permit
applications and building code enforcement).
The adjustments fall into one or more categories:
- overall adjustments driven by a moving average of indirect and direct costs
- refinements of existing fees to better reflect actual and anticipated costs of providing the related services
- new fees to capture new or previously underfunded services
OPTIONS/ DISCUSSION:
Increased fees are required in 2011 to cover the projected increase in
costs over the 2010 base. These
increases are a result of projected 2011 salary and benefit increases and
general inflation, and other adjustments as outlined in this report. The fees are calculated based on the past
5-year average volume development activity and this cyclical trending contributes to the proposed increase in fees per application
for 2011. The 5 year average drops 2004
(a higher volume year) and adds 2009 (a moderate volume year). This contributes to a higher per application
cost, balanced over the latest 5 year average level of activity. The proposed 2011 general rate increase for
Development Fees is 7.2%, and for the Building Fee is 9.4%. Adjustments to the
categories within each fee by-law are also being proposed.
Development Fee By-law
Within the Development Fee By-law, Staff are
proposing to maintain fees for the residential component of minor variances and
heritage site plan applications at current levels, as generally these
applicants are local home owners and further increases may become a deterrent
to filing of applications and potentially result in construction activity without
proper permits and by-law compliance.
In addition to the flat rate increase of 7.2% for Development Fees,
rounded up to the closest $10, Staff are also recommending the following
adjustments to the existing categories within the Development Fee By-law:
Site Plan Control
Include a new
fee for extension of Site Plan Endorsement of $1,000.00 (similar to existing
fee for extension of draft plan of subdivision approval).
Committee of Adjustment
To better reflect the amount of
Staff review time and resources for minor variance applications for
non-residential applications, and recognizing that some applications are
technical in nature requiring fewer resources, Staff are proposing the
following changes to the Committee of Adjustment fees:
·
Increase
the fee for a minor variance associated with non-residential properties
including apartments and condominiums from $1,600 to $3,200.
·
Changing
the wording of Technical Amendment provision so non-residential applications
for “variances to rectify existing conditions requiring minor review by Staff,
at the discretion of the Director of Planning and Urban Design” pay a minimal
fee per application. This fee is currently only applied to residential
applications.
Urban Design
Through the Subdivision Agreement process Urban Design collects a landscape processing fee. This fee is based on a % of the landscape works cost and a % of the Town wide Soft Development Charge (use of the Soft Development Charge is for calculation purposes only) based on the number and type of units. Historically, the second portion of the fee calculation has been called the Parks Development Fee. This fee represents Urban Design’s role in reviewing the draft plan, planning parks and open space locations, parkland dedication requirements and the overall design of the community. In order to document current practice and better reflect what this fee represents a category called Urban Design Community Planning is being proposed. In addition Staff are proposing to rename “Landscape Planning Fee” to “Urban Design and Landscape Approval Fee” for both Site Plans and Subdivisions.
Studies for both Planning and Urban Design and Engineering
Add an additional category to
capture Review of Studies using Peer Review Consultant. The fee will be the Peer Review Consultant
costs plus 15% for administration.
Fees for Urban Design and Engineering using Percentage of Cost of Works
Certain fees for Urban Design and Engineering are calculated as a fixed percentage of cost of works (5.1%) for both landscape/design works and engineering works. The 5.1% of cost of works has not increased since 2007. Capturing the annual cost increases without increasing the percentage of cost of works has been based on the assumption that changes to the construction costs more or less match the department cost increases. Table 1 compares the third quarter Construction Price Index (CPI) versus the annual Engineering Departmental* operating cost increases over the past 4 years. It is evident that the percentage increase in department operating costs has outpaced the CPI, and therefore, the fees collected within these 4 years are not sufficient to cover the operations of the departments.
|
Table 1:
Comparison of Construction Costs Versus Fee Increases |
|||||
|
|
Q4
2007 |
Q4
2008 |
Q4
2009 |
Q3
2010 |
Compounded
Total |
|
Non-residential construction price index |
9.6% |
12.4% |
-10.0% |
1.0% |
12.0% |
|
Departmental Fee Increases |
3.5% |
4.0% |
4.0% |
4.0% |
16.4% |
* Note:
Staff are using the Engineering Department increases
as a basis to compare the change in costs.
The Urban Design Departmental fee increases are similar to the
Engineering Departments.
In addition
Staff are spending more time and effort on reviewing
and approving landscape and engineering submissions due to increasing
complexities, additional meetings required, additional consultations with
outside agencies, etc. It is anticipated that moving forward, the
trend toward more complex, intensification development will continue.
Therefore, for 2011 Staff are proposing to increase
the percentage of cost of works by the same annual rate as the overall
engineering fee (7.2%), increasing the cost of works ratio from 5.1% to 5.5%.
Building By-Law
The body of the by-law remains substantively unchanged, except for amendments necessary to bring the Town’s bylaw into conformity with new building code regulations governing application processing and document submissions.
An overall fee adjustment of 9.4% is necessary to recover the direct costs for building permit and enforcement services, indirect cost transfers to the Town, and to re-establish a reserve. The building permit reserve has been used to offset a downturn in building permit revenues in the last two years. The reserve fund was $2,412,366 at the beginning of 2009, $540,388 at the beginning of 2010, and is now fully exhausted. Markham provides very comprehensive plan review and building inspection services, which must be sustained through appropriate fees. Markham’s building permit fees will remain competitive with comparable GTA municipalities after this increase, and some adjustments are being made to ensure permit fees do not present any great financial burden on homeowners undertaking minor projects, or persons employing green technologies.
The following specific fee changes are proposed:
1.
A reduction in the fee for a residential solar
collector system to $100, and establishment of a $500 flat fee for commercial
solar collector systems. This is a decrease from the unit fees currently
payable, and will remove a potential financial barrier to the use of green
technologies;
2.
Establishment of fees for other green technology
installations, in expectation of increasing numbers of these applications.
Green technology fees have been set on the basis of minimum cost recovery, and are waived where
the installation is incorporated as part of new building construction;
3.
A fee decrease to $100 for residential decks, garden
structures and new entrances, to remove any significant financial barriers to
homeowners taking out proper permits for minor projects in established
residential areas;
4.
Establishment of a $100 flat fee for pre-servicing a
residential lot. This will permit residential lot servicing to be completed and
inspected during road construction, prior to building permits being available,
and will assist development industry timelines;
5.
Establishment of a $500 fee where an Unsafe Building
Order or Prohibition Order is issued on an existing building, in order to
recover the administration and enforcement costs associated with these Orders,
and
6. Establishment of a fee setting mechanism of $12 per $1000 of the prescribed value of an alteration or other construction which is not otherwise listed in the permit fee table.
Public Consultation
The Building Code Act requires the Town to hold
at least one public meeting with respect to any changes in fees. Notice must be given to the general public
and interested parties 21 days prior to the meeting. It is recommended that notice be placed on
the Town’s website, in the Markham Economist and Sun and the Thornhill Liberal, and be mailed to the Urban Development
Institute, Toronto Home Builders Association, and development industry
representatives listed on the Town’s “Developers Round Table” distribution
list. Staff are recommending that the public meeting
be held on February 22, 2011 as part of the regular Development Services
Committee Public Meeting scheduled for that date.
FINANCIAL CONSIDERATIONS AND TEMPLATE:
The Finance Department has been working closely with Development Services Commission staff to ensure proper direct and indirect cost recovery and to incorporate the results into the proposed 2011 operating budget. Increased fees are required in 2011 to cover the projected increase in costs over the 2010 base. These increases are a result of adjustments based on the 5-year average volume of development activity, projected 2011 salary and benefit increases and general inflation.
HUMAN RESOURCES CONSIDERATIONS
Not Applicable
ALIGNMENT WITH STRATEGIC PRIORITIES:
Not Applicable
BUSINESS UNITS CONSULTED AND AFFECTED:
Development Services
Commission Departments and
RECOMMENDED BY:
________________________ ________________________
Jim Baird, Commissioner of Tim Moore, Director Building
Development Services Standards
ATTACHMENTS:
Attachment “A” Draft of amendment to Development Fee By-law 211-83
Attachment “B” Draft of amendment to Building By-law 2009-160