3. CONFIRMING ELIGIBILITY FOR THE REIMBURSEMENT PROGRAM FOR DEVELOPMENT RELATED FEES FOR CHARITABLE AND NON-PROFIT ORGANIZATIONS

CONFIRMATION DE L'ADMISSIBILITÉ AU PROGRAMME DE REMBOURSEMENT DES REDEVANCES D'AMÉNAGEMENT POUR LES ORGANISMES DE BIENFAISANCE OU SANS BUT LUCRATIF

COMMITTEE RECOMMENDATION

That Council approve the amended listing of organizations eligible for reimbursement from the Reimbursement Program for Development-Related Fees for Charitable and Non-Profit Organizations.

RECOMMANDATION DU COMITÉ

Que le Conseil approuve la liste modifiée des organismes admissibles à un remboursement en vertu du Programme de remboursement des redevances d'aménagement pour les organismes de bienfaisance ou sans but lucratif.

Documentation

1. Deputy City Manager’s Report, Planning and Infrastructure Services dated

20 April 2012 (ACS2012-PAI-PGM-0118).

2. Extract of Draft Minutes, Planning Committee meeting of 8 May 2012.

Report to/Rapport au :

Planning Committee

Comité de l'urbanisme

and Council / et au Conseil

20 April 2012 / le 20 avril 2011

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice municipale adjointe, Planning and Infrastructure/Urbanisme et Infrastructure

Contact Person/Personne-ressource : John L. Moser, General Manager/Directeur gérénal, Planning and Growth Management/Urbanisme et Gestion de la croissance

(613) 580-2424 x28869, John.Moser@ottawa.ca

City-wide / À l'échelle de la Ville

Ref N°: ACS2012-PAI-PGM-0118

SUBJECT:	confirming eligibility for the reimbursement program for development related fees for charitable and non-profit organizations

OBJET :	confirmation de l'admissibilité au Programme de remboursement des redevances d'aménagement pour les organismes de bienfaisance ou sans but lucratif

REPORT RECOMMENDATION

That Planning Committee recommend Council approve the amended listing of organizations eligible for reimbursement from the Reimbursement Program for Development-Related Fees for Charitable and Non-Profit Organizations.

RECOMMANDATION DU RAPPORT

Que le Comité de l'urbanisme recommande au Conseil d'approuver la liste modifiée des organismes admissibles à un remboursement en vertu du Programme de remboursement des redevances d'aménagement pour les organismes de bienfaisance ou sans but lucratif.

BACKGROUND

On January 23, 2002, City Council confirmed its commitment to the quality of life of the community by partnering with Ottawa’s hospitals to tackle the challenge of raising $232 million locally to fund a 10-year capital requirement identified by the hospitals. Specifically, Council considered and approved the following recommendations from the Corporate Services and Economic Development Committee:

1. Council will waive development charges on hospital capital projects, on a case-by-case basis, subject to a City staff report confirming that the projects fall within the scope of this 10-year program; and

2. Council will remit permit fees paid to the City on hospital capital projects, on a case-by-case basis, subject to a City staff report confirming that the projects fall within the scope of this 10-year program.

On March 11, 2009, the Corporate Service and Economic Development Committee recommended to Council that it “…revise its policy of reimbursing building permit, planning application and cash-in-lieu of parkland fees paid to the City by hospitals for capital projects to include a sunset clause stating that in order to apply for the reimbursement, the building permit, planning application and cash-in-lieu of parkland fees must have been paid prior to March 31, 2009.” Document 1 details the funding support provided under this program

On June 24^th, 2009, Council directed staff to develop a policy for responding to requests from hospitals and charitable and non-profit organizations who wish to reduce the amount paid towards development-related application fees. The intent was to provide a framework for reimbursement and to avoid ad hoc requests. On October 28, 2009, Council approved the Program for Responding to Requests for Reimbursements of Development-related Fees. The Program provides reimbursement of up to 50 per cent of various development application and building permit fees. The Program was approved with a proposed budget of $1,200,000, subject to budget approval that year. The budget estimate was derived from two sources: Charitable and non-profit organization building activity in the previous two years; and what the hospitals had anticipated they would be seeking in reimbursements over 2009 and 2010.

On November 17, 2009 an omnibus motion was proposed by the Audit, Budget and Finance Committee. The motion included the following line item:

Defer portion of Development Fee Rebate for Hospitals -$1,000,000

The motion was passed, and reduced the Reimbursement Program’s budget to $200,000. The Planning and Growth Management Department continued to apply the program reimbursement criteria to eligible non-profit organizations, but not to hospitals, in accordance with the motion. This report provides for formal recognition of the motion in the reimbursement program criteria.

The City has been approached by a hospital requesting reimbursement for its latest expansion of its facility. The previous expansion was reimbursed November 2009, as the fees and permits had been paid before the March 31, 2009 deadline.

The permit application for most recent expansion of the hospital was submitted and fees paid in fall 2009, too late to take advantage of the original funding support process.

With the March 31, 2009 sunset clause in effect, and removal of hospital funding from the Reimbursement Program, the Hospital is ineligible for any reimbursement.

DISCUSSION

This report is in response to a general motion put forward and carried by Council on November 30, 2011. The motion states:

“THEREFORE BE IT RESOLVED that the public hospital portion of the Program for Responding to Requests for Reimbursements of Development-Related Fees policy be referred to Planning Committee for review and subsequent recommendation to Council.”

Development by Ottawa hospitals is specifically exempted from the Development Charges By-law 2004-298. However hospitals are required to undergo the Development Review process, which is not complicated requires minimal fees. Hospitals must also obtain a Building Permit for construction projects. Fees for building permits can be substantial, prompting hospitals to seek reimbursement.

For example, the building permit fee for the expansion of the one local hospital mentioned above was $831,000 and was reimbursed out of the City-Wide Capital Reserve Fund. The building permit fees for the recent phase of the hospital’s expansion are $953,000, for which hospital officials are seeking reimbursement, but there is no reimbursement program.

The Building Code Act requires building permit fees cover all costs associated with servicing building permits and enforcing the Act and Code. The Act essentially requires the program to be revenue neutral and to not impose a tax base pressure. Thus, revenues cannot be used as grant funding as this could result in potential shortfalls or be viewed by permit applicants as misuse of revenues for purposes other than to service permits and enforce the Act and Code contrary to the legislation. An attempt to alter the Building Code Act was not successful primarily because Council does have the ability to grant funding by other means – through such programs as the City-Wide Capital Reserve and the Reimbursement Program described above.

The Planning and Growth Management Department has for the last two years asked to increase the budget of the Reimbursement Program; however those requests have been declined. With insufficient funds in the Program, an inability to increase the fund’s budget, and the limitations within the Building Code Act, hospitals are unable to take advantage of the Program.

There is some relief expected in terms of the building permit fees for hospitals and other institutional construction once the City adopts the new fee methodology for building permits.

Hospitals will notice a drop in the total building permit fees once the new system is implemented. A report is scheduled to be presented to Planning Committee this summer with an implementation date in the fall.

RURAL IMPLICATIONS

There are no rural implications associated with this report.

COMMENTS BY THE WARD COUNCILLORS

Not applicable - City-Wide report

LEGAL IMPLICATIONS

There are no legal implications associated with this report.

RISK MANAGEMENT IMPLICATIONS

There are no risk management implications associated with the recommendation in this report.

FINANCIAL IMPLICATIONS

There are no financial implications associated with the report recommendation.

Should Council opt to include hospitals in the Reimbursement Program for Development Related Fees for Charitable and Non-profit Organizations, estimated funds of $1,000,000/year would be required. Planning and Growth Management would bring forward a budget pressure in the 2013 draft operating budget.

TECHNOLOGY IMPLICATIONS

There are no technology implications associated with this report.

TERM OF COUNCIL PRIORITIES

Financial Responsibility – Maintain and enhance the City’s Financial Position.

SUPPORTING DOCUMENTATION

Document 1 Hospital Capital Funding Support

DISPOSITION

The Planning and Growth Management Department will revise the Reimbursement Program for Development-Related Fees for Charitable and Non-Profit Organizations’ list of eligible organizations.

HOSPITAL FUNDING SUPPORT DOCUMENT 1

Hospital Capital Funding Support pursuant to the hospital's approved 10-Year Capital Program up to and including March 31, 2009
	Building Permit Fees	Planning Application Fees	Development Charges & Parkland Fees	Land Transfers, Capital Grants & Others	Total by Institution
Ottawa Heart Institute	178,970	-	5,894	-	184,864
Queensway Carleton Hospital	1,614,477	18,761	105,341	-	1,738,579
Montfort Hospital	2,041,991	10,485	117,070	-	2,169,546
Sisters of Charity	560,558	18,931	57,261	-	636,750
Ottawa Hospital **	2,753,179	28,422	143,650	-	2,925,251
Royal Ottawa Healthcare Group	94,273	-	-	657,997	752,270
Children's Hospital of Eastern Ontario	879,713	1,515	88,681	-	969,909
Rogers House	40,500	8,690	-	-	49,190
Perley & Rideau Veteran's Health Centre	19,934	8,600	58,948	-	87,482
Land Lease for 599 Smyth Road to the Ottawa Hospital	-	-	-	6,599,160	6,599,160
Development charges exempted per DC Bylaws since 07/04	-	-	14,301,804		14,301,804
Total	8,183,595	95,404	14,878,649	7,257,157	30,414,805

** Includes the Riverside, Civic and General campuses.