MAPLETON – Council here is weighing alternatives to raising building and planning fees by massive amounts suggested in a consultant’s report aimed at attaining “full cost recovery” for the services.
A report by Hemson Consulting presented at a Jan. 16 public meeting indicated building permit fees in the township need to rise by 18 per cent across the board, and planning fees by 84% on average in order to achieve full cost recovery.
For building code services in 2024, the report projected costs of $669,400 against revenues of $567,000, leaving a difference of $97,700. Under the Building Code Act, that means the maximum increase the township could levy is 18%.
The projected shortfall in planning fees is even starker, with 2024 costs projected at $617,954 and revenue at $338,000, leaving a deficit of $279,954.
The Hemson study also showed Mapleton’s charges for numerous building and planning services were significantly below fees in other area municipalities.
After council members expressed concerns about the impact of such steep increases, council deferred a motion to proceed with a bylaw reflecting the proposed increases and tasked staff with producing a report aimed at finding cost mitigation and efficiencies.
Reports provided by staff at the Jan. 30 council meeting provided options to implementing the increases.
A report from chief building official Tim Swartzentruber indicates while some recommendations from the Hemson report could be implemented, the building department “would not be looking to increase the fees” beyond a previously approved increase in the town’s existing fees and charges bylaw based on the Consumer Price Index.
Instead of an additional increase, the CBO’s report recommends:
- adding fees for some services not currently charged for;
- adding penalties for building without obtaining a permit; and
- allowing for a percentage refund on cancelled permits.
In addition, Swartzentruber suggested continuing to contribute building reserve funds to a target reserve of 1.3 times the building services gross operating budget as recommended by the consultant.
“This will hopefully maintain a lower-than-average cost for building permits as compared with neighbouring municipalities,” the report states.
Swartzentruber told council the consultant’s target of an 18% increase is “a good baseline.
“Yeah, this is what we would need to raise everything up to get every cent back for every second and every minute that we put into issuing permits and enforcing the Ontario Building Code … but when ever is there 100% full cost recovery, like for every phone call?” he observed.
The CBO pointed out the installation of cloud-based permit software has “greatly improved our efficiencies.
“So instead of having to hire additional staff, we we’re able to keep the numbers low enough, that we would like to just maintain the fees and charges that we have already been approved this year, add a couple of additional line items and more items for fees and fines and rebates as well,” he stated.
Councillor Marlene Ottens inquired about uptake from the public on using a new online application system for permits.
“Do you find that a lot of people are utilizing it and finding it helpful?” she asked.
While continued efforts are needed to make people aware of the service, which also allows for online payment, Swartzentruber noted “it saves them the trip in, especially our Mennonite community.
“They do have the internet, but it’s sometimes more difficult for them to get here.”
He added, “I find we still obviously will take phone calls and people, when they come in, we will meet with them.
“It’s not that everything’s just cloud-based, but it does take some of that load off with admin and communications.”
Although council simply accepted the report as information, Mapleton CAO Manny Baron told the Advertiser the CBO’s recommendations would be reflected in an updated fees and charges bylaw.
A report from Mapleton planning and development director Michelle Brown points out full cost recovery is a difficult benchmark to quantify.
On average, the planning department processes approximately 60 applications per year that result in direct revenue, the report states.
“However, the planning department also receives on average 40 new enquiries a month, plus pre-consultation appointments that may or may not result in revenue,” the report explains.
Once an application has been received ongoing consultations with applicants are still required.
“Staff meet with potential applicants regularly to assess their needs and collaboratively work to come up with alternative solutions to avoid costly and sometimes unnecessary expenses …” Brown states in the report.
“The value in the pre-consultation process is not easily quantifiable in a chart but deserves to be highlighted as this level of customer service does not provide any revenue and therefore will always result in a deficit.”
The report notes a substantial amount of staff time is dedicated to providing prospective applicants with advice and guidance prior to an application being submitted.
“This ensures potential applicants can make an informed decision,” the report states.
“The time required by staff to research and respond to proposals is currently not recovered by a fee, unless a formal pre-consultation is required and outside agencies participate in the process.”
While noting staff are “sensitive to the financial impacts on prospective applicants,” the report states that without the full fee increase proposed by the consultant, ratepayers will continue to contribute towards the cost of planning applications.
“It is staff’s opinion the proposed fee increase should continue to strengthen our community relationships as we move closer to reaching our goal of full transparency and efficiencies that do not impact the tax rates,” Brown states in the report.
The report provided council with four options for approaching the revenue shortfall:
- continue with the approved 2024 fees and charges (status quo) resulting in a revenue shortfall of $280,000;
- move immediately to full cost recovery;
- focus on direct cost recovery, thereby eliminating the indirect costs from the analysis, resulting in shortfall of $92,000; and
- full cost recovery using a three-year phased-in approach.
Under the phased-in approach, the report suggests fee increase fees by 32% in 2024, followed by of 20% the following year and 15% in 2026.
“One of the things I don’t see in the report is actual cost mitigation strategies,” observed councillor Michael Martin.
“I see the four options, obviously … on what sort of philosophy we want around the fees.
“But one of the premises of requesting a report was … what are some strategies we could do … are there any ways in which we do business that could be streamlined to try and affect that $280,000?”
Brown noted the department already does as much as it can electronically, “but I still need humans here to review.”
Also indirect costs such as office space, technology, carpeting, lighting and supplies are more or less baked into the overall operation of the township.
“I have legislative requirements, I have to follow all these steps, I have to put mail out, I have to be able to send it to different people,” Brown stated.
“Trust me when I say to you, I’m not looking for extra work to do, or I’m not taking on projects that aren’t necessary.”
Councillor Marlene Ottens suggested the township implement the 32% increase required for the first phase toward full cost recovery “then revisit this in a year to see how reality compares to the Hemson report’s projections.”
“It’s pretty heavy to have these kinds of increases. It’s certainly not what we’ve been about for the last number of years,” observed Mayor Gregg Davidson.
Barron suggested council proceed with a hybrid option because “obviously, the appetite to go and recover that full ($280,000), from what I can gather here anyway, is maybe not there.”
Instead, Barron suggested council phase-in increases based on the $92,000 figure representing the deficit after removing in-direct costs over a three-year period.
“Would that be more palatable?” he asked.
“I like the idea of slowly eliminating it over years, instead of trying to do it all at once,” said Davidson.
Councillor Martin Tamlyn presented a motion to proceed as Ottens had suggested with the 32% increase implemented immediately and revisiting the rates in the future. However the motion was not seconded.
“I think the most palatable for me is … phasing in the direct cost recovery ($92,000) option,” said Martin.
“It would be maybe prudent just to see what that looks like, as far as numbers go, mapped out.”
A motion by councillor Amanda Reid to defer a decision until a report on the hybrid option presented by Barron could be compiled and reviewed by council was approved.