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5. 2008 ANNUAL REPORT ON BUILDING CODE FEES RAPPORT ANNUEL DE 2008 SUR LES DROITS DE PERMIS DE CONSTRUCTION |
Committee recommendation
That Council
approve the 2008 Annual Report on Building Code Fees, as outlined in Document
1.
Recommandation DU Comité
Que le Conseil approve le rapport annuel de 2008 sur les droits de
permis de construction, qui fait l'objet du document 1.
Documentation
1.
Deputy
City Manager’s report, Infrastructure Services and Community Sustainability
dated 9 April 2009 (ACS2009-ICS-BLD-0012).
Report to/Rapport au :
Planning and Environment Committee
Comité de l'urbanisme et de l'environnement
and Council / et au Conseil
09 April 2009 / le 09 avril 2009
Submitted
by/Soumis par : Nancy Schepers, Deputy City Manager
Directrice municipale adjointe,
Infrastructure Services and Community
Sustainability
Services d’infrastructure et
Viabilité des collectivités
Contact Person/Personne ressource : Arlene Grégoire, Chief Building
Official/Chef du service du bâtiment, Planning and Growth Management/Urbanisme
et Gestion de la croissance
(613)
580-2424 x 41425, Arlene.Gregoire@ottawa.ca
SUBJECT:
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OBJET :
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RAPPORT
ANNUEL DE 2008 SUR LES DROITS DE PERMIS DE CONSTRUCTION |
REPORT
RECOMMENDATION
That the Planning and Environment Committee recommend that Council approve the 2008 Annual Report on Building Code Fees, as outlined in Document 1.
RECOMMANDATION DU RAPPORT
Que le Comité de l'urbanisme et de
l'environnement recommande au Conseil d'approver le rapport annuel de 2008 sur
les droits de permis de construction, qui fait l'objet du document 1.
BACKGROUND
Pursuant to Section 7.(4) of the Building Code Act, the City is required to prepare a report, every 12 months, containing information on the building permit fees collected, as well as the costs of servicing building permits and enforcing the Building Code Act and Building Code. Regulation Division C Part 1 (1.9.1.1) further directs the municipality to distinguish between direct and indirect costs, as well as to include in the report the balance of the reserve(s) at year end, where such have been established. Accordingly, the 2008 Annual Report on Building Code Fees (Document 1) is provided for the approval of Planning and Environment Committee and Council.
CONSULTATION
The City is required to report annually on the status of building permit revenues, costs of servicing building permits and enforcing the Building Code Act and Building Code and the reserve funds and to make the report available upon request. Accordingly, consultation was not undertaken.
LEGAL/RISK MANAGEMENT IMPLICATIONS:
There are no legal/risk management implications associated with this report.
FINANCIAL IMPLICATIONS
SUPPORTING DOCUMENTATION
Document 1 2008 Annual Report on Building Code Fees
DISPOSITION
The Annual Report will be posted on the City's website and distributed upon request.
2008
ANNUAL REPORT ON BUILDING CODE FEES DOCUMENT 1
2008 ANNUAL REPORT ON BUILDING CODE FEES
SUMMARY
Pursuant to Section 7. (4) of the Building Code Act, the City is required to prepare a report containing information on the building permit fees collected, as well as the costs of servicing building permits and enforcing the Building Code Act and Code. Regulation Division C Part 1 (1.9.1.1) further directs the municipality to distinguish between direct and indirect costs, and to include in the report the balance of the reserve(s) at year end, where such have been established. Accordingly, the following information is provided:
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The Cost of Servicing Building Permits |
Actual
2008 |
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$000 |
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Building Permit Revenues |
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25,160 |
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Less: |
Expenditures |
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Direct Costs |
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(12,341) |
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Indirect Costs |
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( 4,285) |
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Transfer to Building Code
Enforcement Reserves |
8,534 |
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Building Code Enforcement Reserve Funds
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Revenue Stabilization $000 |
Insurance $000 |
Capital Contribution $000 |
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Closing
Balances |
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December 31,
2007 |
15,460 |
2,516 |
1,773 |
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December 31,
2008 |
16,107 |
5,387 |
6,113 |
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This documentation constitutes the 2008
Annual Report for the Building Code Services Branch of the Planning and Growth
Management Department of the City of Ottawa.
THE COST OF SERVICING
BUILDING PERMITS
The Building Code Act directs municipalities to set building permit fees to fully recover the cost of servicing building permits and the cost of enforcing the Act and Building Code. These include both direct and indirect costs. Direct costs include such costs as the compensation costs for the Building Officials, staff involved in the processing of applications, training and development costs, computers and peripherals, vehicles and mileage costs, to name a few. The approach for allocating indirect costs within the City is closely aligned with the Ontario Municipal Benchmarking Initiatives (OMBI) recommended methodology. Indirect costs consist of expenditures by other Branches incurred in support of the Building Code Branch’s Code activities, including legal assistance and representation from Legal Services, budgeting preparation and tracking by the FSU team of Finance Services, as well as accommodation expenses based on the actual square footage space that is occupied by the Branch.
Of total costs, 74 per cent are direct costs while 26 per cent are indirect. For 2008, the direct and indirect costs, excluding the contribution to the reserve funds, were:
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Direct Costs |
$12,341,000 |
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Indirect Costs |
$ 4,285,000 |
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2008 Totals |
$16,626,000 |
These figures are consistent with
previous years. In 2006 and 2007, direct costs represented 72 per cent and
73 per cent respectively.
Permit Fee Rate
In 2008, the building permit fee rate was reduced to $13.25 per $1000 in construction value for all buildings and structures and similarly, the rate for farm buildings was reduced to $9.30 per $1000 in construction value, as assessed.
As a result of
higher than expected revenues in 2007 and 2008 and savings due to vacancies,
contributions to the reserve funds were accelerated and the reserve was almost
fully funded by mid-2008. In view of
the requirement to ensure Branch operations remained revenue neutral, Building
Code Services initiated
a review of its financial model to validate the cost allocations and the fee
rate. The review included an analysis
of historical building permit activity, the costs of the Building Code related
activities and services and the reserve funds.
The results of this review will be submitted to the Planning and Environment
Committee and Council in Q3 of this year.
Reserve Funds
The Building Code Act provides for the
establishment of reserve funds to ensure municipalities are able to fulfill
their legislative mandate despite downturns in construction activity, to cover
capital investments (growth vehicles, computers and software development, etc.)
and special costs/liabilities. In 2006,
the Branch established the following reserve accounts to which surplus building
permit revenues are allocated at year-end:
Revenue Stabilization Fund
To safeguard the City’s ability to fulfill its legislative mandate to enforce the Building Code Act and Code by covering 100 per cent of the total direct costs associated with the activities of servicing building permits and enforcing the Act and Building Code where there is a decline in building permit revenues/volumes, year over year.
Insurance Fund
To cover costs associated with lawsuits, as a result of the City’s mandate to enforce the Act and Code, not covered by the City’s general liability insurance policy, as liability is jointly and severally held by the municipality, and for the City’s deductible for claims covered by the City’s general liability policy.
Capital Contribution Fund
To cover capital expenditures in support of the activities related to servicing building permits and enforcing the Building Code Act and the Building Code, such as new fleet vehicles, additional computers, safety equipment and tools for staff, new workstations and renovations to accommodate the new staff, and for the development and implementation of new technological information systems, such as the e-portal service for tract house builders.
As of December 31, 2008, the following fund balances were as follows:
Building Code Enforcement Reserve Funds
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Revenue Stabilization |
Insurance |
Capital Contribution |
Total |
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Opening
Balance (January
1, 2008) |
15,459,922 |
2,516,351 |
1,772,696 |
19,748,969 |
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2008 Contributions |
136,000 |
136,000 |
408,000 |
680,000 |
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2008 Interest |
511,000 |
85,000 |
43,000 |
639,000 |
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2008 Capital Program Contributions |
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-1,315,000 |
(1,315,000) |
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2008 Year-End Contributions |
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2,650,000 |
5,203,877 |
7,853,877 |
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Opening Balance (January 1, 2009) |
16,106,922 |
5,387,351 |
6,112,573 |
27,606,846 |
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2008 ACHIEVEMENTS
· In 2008, the Branch received 9450 building permit applications and undertook 105,028 Building Code related inspections. These numbers are surprising and follow the previous year’s frenetic construction activity. Both 2007 (9212) and 2008 (9450) building permit applications surpassed the number of applications submitted in 2001 (9159) and 2002 (9151), two years considered to be the ‘boom’ construction activity years!
· At the 2008 national Government Technology Exhibition and Conference (GTEC) Awards Gala, the e-Footprint Application developed by the Building Code Services Branch in conjunction with Information Technology Services won a gold medal for “Service Delivery to Citizens and Businesses.” The e-portal service on ottawa.ca allows production home builders to submit their building permits applications, pay the fees and monitor the progress of the review of these, all online. This innovative application improved service delivery to the building industry and assisted the Branch to avoid higher costs that would have been required to meet the statutory timeframes for the review of applications and rendering a decision with respect to permit issuance.
Percentage of applications determined within legislated
timeframes
Further refinements have been made to processes and data collection that has resulted in improved performance and reporting. The improvement in turnaround times continues to reflect the successful implementation of the award winning eFootprint Applications portal process introduced late 2007, the further refinements to the permit application processes and the lower volume of applications received in Q4 2008.
ON THE 2009
AGENDA
Staffing
· In Q4 2008, a Continuous Improvement and Performance Measurement unit was established within the Branch that will be fully staffed in 2009. This group will assist the Chief Building Official in ensuring the Branch’s activities continue to comply with the Building Code Act and its regulations and will be responsible for the continuous improvement of business processes, performance measurement, audits, and risk management.
Technology
· The Branch is implementing the Electronic Documents & Records Management System (eDRMS), which will result in a comprehensive information management strategy. This includes the establishment of guidelines for efficient management of information on our shared drives and will identify opportunities to increase its accessibility via eDRMS, Ozone and ottawa.ca.
· Further refinements of the Branch’s computerized system for tracking building permit activities are being pursued to allow all permit applicants to electronically track their applications and obtain updates as to status via ottawa.ca.