Centre Wellington has revised its schedule for building permit fees.
The new rates, based on Statistic Canada’s Construction Cost Index for Ontario, work out to an increase of 6.9%. That puts the fee for residential construction at $1.02 per square foot.
Chief Building Official Bob Foster told council on July 16 that his department’s fees, and that of the planning department, had been established in 2005, based on a costing review by C.N. Watson and Associates.
Recent changes in the building code require that building permit fees reflect the cost of doing business.
Foster presented council with the building department’s figures for 2006. They show revenue from fees at $462,000, and total costs of the department related to the building code at $665,000, leaving a deficiency of $203,000.
Those figures are based on the department’s activity in administering the building code, and do not include such things as heritage.
The 2005 fee schedule was based on building activity continuing at the rate of 150 residential units per year. At the start of this decade the number of houses exceeded 200 in most years, but in 2006 the total fell below 90. That accounts for the large deficiency.
Provincial legislation calls for a reserve fund to hold funds in years when income exceeds expenses. It is often the case that fees will be collected in one year, but the inspections and other costs do not come until the following year.
The reserve funds smooth out those situations, and balance busy years with years when the pace of new construction slackens. At present, there is no balance in the Centre Wellington Building Reserve Fund.
Councillor Walt Visser asked whether it was advisable to scale down the department. Foster replied that cost cutting may be considered for 2008 if the present low level of building activity persists.
In a later interview, Foster stated that the costs and income of the department must be compared annually. The reserve fund should hold no more than one year’s expenses, and in a busy period of construction, fees could be lowered, he said.
The new Centre Wellington rates are similar to those in other area municipalities. Kitchener presently charges $1.06 per square foot for residential structures.
Flat-rate fees also increased. The deck permit fee is now $100, and the wood stove or chimney fee is $168.
