MAPLETON – Building permit fees here need to rise by 18 per cent across the board, and planning fees by 84% on average in order to achieve full cost recovery, according to consultant reports presented at a public meeting.
However, Mapleton council will await a staff report on possible cost mitigation measures before deciding on any changes to the current fee structures.
In 2023, the township undertook a review of its building and planning fees to determine necessary levels to recover the full cost of administering and enforcing the Building Code Act and processing planning applications in accordance with the Planning Act.
The township retained Hemson Consulting to assist with the study.
“This exercise was really to … establish what the township could impose to recover that full cost of service,” explained Stefan Krzeczunowicz, an associate partner with the consulting firm, at a Jan. 16 public meeting on the fee proposals.
For building code services in 2024, the study projects costs of $669,400 against revenues of $567,000, leaving a difference of $97,700, or 18%.
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.
A schedule of proposed planning fees shows costs rising by varying amounts for different services in order to reach full cost recovery overall.
For example, a commercial/industrial minor variance would rise from $3,445 to $5,220, a difference of $1,775, or 52%, while the fee for a complex site plan control approval would increase from $5,720 to $16,300, a change of $10,580, or 185%.
A comparison of planning fees with other municipalities shows a commercial/industrial minor variance would cost $2,000 in both Wellington North and Minto, $1,071 in Centre Wellington and $2,116 in North Perth.
Krzeczunowicz pointed out planning fees need to be set to recover the specific costs of a particular application.
“The Planning Act says you can establish fees for processing these applications,” he stated.
“Very important is that when we calculate these fees we have to ensure that each type of application is set a fee that recovers no more than the cost for that type of application. So there’s no cross-subsidization that’s allowed under the planning fee regime.
“And, moreover, these fees are appealable to the Ontario Land Tribunal, so a certain amount of rigour is required to get them right.”
In terms of building charges, a proposed fee schedule would see residential permits costs rise from a $340 administration fee and 78 cents per square foot to $400 and $1.05 respectively.
By comparison:
- Minto currently charges a $300 administration fee and square foot charges ranging between 80 cents and $1.20;
- Wellington North charges $260 for administration and 91 cents per square foot;
- Centre Wellington charges $1.37 per square foot with no administration fee; and
- North Perth charges a $100 administration fee and 65 cents per square foot.
Krzeczunowicz explained the proposed building fee increases are mostly uniform, with some exceptions.
“We’ve applied the 18% more or less across the board, across all of the fees, with a few exceptions,” he said.
“There’s a higher increase that’s proposed for the fee rates that apply for new construction and additions to buildings and a lower increase that it would apply to renovations.
“Right now the fee rate for all about work is the same and I think there’s a feeling that when a renovation application comes in, that’s less effort.”
Councillor Marlene Ottens asked if general taxpayers were subsidizing the difference, when building permit fees don’t cover all costs of issuing them.
“Any shortfall currently is probably being funded from the reserve fund, but ultimately paid for by the taxpayer,” said Krzeczunowicz.
In terms of planning fees, the consultant’s report states the township is currently subsidizing the planning application review process through the tax rate “to a considerable degree.”
In 2023 the township funded about 45% of planning application costs using general revenues, according to the report.
Mayor Gregg Davidson asked about the reason for lower fees in other municipalities.
“The fees for Minto, Guelph/Eramosa and Wellington North are quite low compared to what we’re planning on doing here. Is it possible that their fees are lower because they use the county as their main planner?” the mayor inquired.
“Honestly, I don’t know. Our comparison didn’t involve calling those municipalities and asking them why they might be low,” replied Krzeczunowicz.
However, the consultant noted, “that sounds to me, like it might be a reasonable assumption.
“But I suspect it’s a little bit more than that. Generally municipalities start moving to full-cost recovery, when development starts to take off and the pressures of paying for a service start to pinch.”
He added, “And so I suspect that it may be that … those municipalities haven’t really dealt with the level of development that causes them to look at this in the same way that you are.”
Councillor Martin Tamlyn asked if the difference in building fees had a large impact on where people elect to live and build.
“When we look at the cost of development, cost of construction … this particular fee is a very small component a) of the total cost and b) of the fees and charges that are paid by a developer to build the home,” said Krzeczunowicz.
“So the difference between building permits between one municipality and the next is not going to influence a developer’s decision about where to build, that’s for sure.”
However, the consultant pointed out industrial buildings might be an exception, with municipalities seeking to attract industrial development “and it’s for that reason that you see the rates for new construction for industrial buildings are often lower than the rates that are charged for other buildings.”
“This is probably a case of better be careful what we wish for. When we decided to go full cost recovery … we were bound to get these kinds of numbers,” observed councillor Michael Martin.
“Those fee increases of 18% and 84%; the 18 is a massive number, the 84 is gigantic. But that’s what we requested, as far as the report goes.”
Martin asked if it would be worth the effort to have township staff prepare a report on “potential cost mitigation.”
“Absolutely,” replied Mapleton CAO Manny Baron.
“When we talk about full cost recovery, we’re talking paper, printer, electricity, office space, carpet, basically everything that you can think of, is divided into percentage and charged back into the presentation.
“But staff is already working on a staff report to come back on Jan. 30 … with what we feel, based on the report we’ve seen, what efficiencies we can find.
Baron added, “With all due respect, the numbers may not match what was presented today. They may be lower.
“But we needed some time to just kind of dive into that ourselves as well.”
Council approved a motion to receive the presentation on building and planning fees from Hemson Consulting for information.
A motion calling for staff to prepare a bylaw reflecting the proposed fee structures for consideration at the Jan. 30 meeting was amended to defer the bylaw to a future meeting.
“Let’s see what staff come back with and then maybe have the bylaw the next meeting after that,” suggested Baron.
