HomeMy WebLinkAboutFIN-05-038 - 2006 Comprehensive Fee Review
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KITCHENER
Financial Services
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Report To:
Date of Meeting:
Submitted By:
Prepared By:
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
Councillor B. Vrbanovic, Chair, and Members of
the Finance and Corporate Services Committee
November 21,2005
Pauline Houston, General Manager of Financial Services & Treasurer
Dan Chapman, Director of Financial Planning & Reporting (2347)
ALL
November 9,2005
FIN-05-038
RECOMMENDATION:
2006 Comprehensive Fee Review
THAT the proposed 2006 Fees and Charges, excluding Fire Department inspection and permit
fees, as contained in the 2006 Comprehensive Fee Review attached to Financial Services
Department Report FIN-05-038 be approved;
THAT the Manager of Cemeteries be directed to forward the Cemetery Tariff of Fees and
Charges to the Ministry of Government Services - Cemeteries Regulation Unit for filing, in order
that the proposed fees become effective January 1, 2006; and further
THAT Legal Services staff be directed to prepare the necessary by-laws to amend The City of
Kitchener Municipal Code Chapters for fees pertaining to licensing, planning applications and
Committee of Adjustment applications.
BACKGROUND:
Fees and charges account for approximately 14% of City revenues and represent the second
largest source of revenue for the City.1 In order to ensure that the structure of fees and charges
remains reasonable over time, a comprehensive review forms part of the annual budget
process. Historically, Council has deliberated on the findings of this review in the fall to provide
sufficient time to finalize regulatory approvals and legislative amendments prior to the new year.
REPORT:
A comprehensive listing of fees and charges proposed for 2006 is attached. The listing
identifies changes from 2005 to 2006 and provides summary rationale for significant
adjustments.
1 Excludes Enterprises (Gas, Water, Sewer, Golf Courses and Building Division)
In order to establish the budget for user fee revenue, departments consider the expected
volume of transactions and the individual rates. When setting individual rates, departments
consider a range of factors including cost recovery, legislation, rates of other municipalities and
market conditions. For 2006, departments were provided with an initial general guideline for fee
increases of 3.0%.2 Based on current budget submissions the revenue increase over the 2005
budget is 3.9%, comprised of both rate and volume increases.3
As part of a larger review of potential budget reduction initiatives, the Corporate Management
Team is recommending strategic fee adjustments in the following two areas:
Cemeterv Fees
Upon reviewing the fees levied by a number of comparable municipal and not-for-profit
Cemetery operations, it has become evident that the fees currently charged by the City of
Kitchener are generally lower. As a result, if Kitchener fees are to remain consistent with
market rates, they must be increased greater than 3%. The proposal before Council would
adjust core Cemetery rates to the middle of the range of rates identified during the market
review. In the view of staff, this adjustment is desirable for the following reasons:
· Ensures that parity is maintained with other area Cemeteries, which helps to balance the
level of demand for service.
· The adjustments will increase revenue by $71,000 in excess of the 3% increase, which
serves as a general tax reduction initiative by reducing the annual cemetery deficit.4
· The increase is consistent with the findings of the Cemeteries Operations Review and
Strategic Business Alternatives Study.
Plannina & Develooment Fees
The introduction of Bill 124 (Building Code Amendment Act) required that building permit fees
be limited to the cost of administering and enforcing the Act. As a result, Municipalities can no
longer subsidize other aspects of the development approvals process with building permit
revenues. In view of this, the Planning Division has undertaken a market review of planning and
development application fees and has identified several key areas where an increase in the
level of cost recovery is warranted. While an increase in the level of cost recovery is desirable,
it is likely that the services of the Division will always be subsidized through the levy to some
extent because the Division provides service not only to the fee-paying applicant, but also to
current and future taxpayers by ensuring that the community interest is given fair consideration
when applications are reviewed, typically resulting in plan revisions or approval conditions.
Certain development review functions are currently below a reasonable cost recovery level and
are targeted for adjustment. The Planning Division proposal would increase revenues by
$131,000, in excess of a basic inflationary adjustment, in the following areas:
· Site Plan Approval - the City dedicates a significant staff resource to providing a
thorough and timely review and approval of site plan applications. The fee is proposed
to be increased by approximately 11 % (to $2,000) which is at the mid-point between
Cambridge and Waterloo application fees.
2 A 3% increase in all fees (excluding enterprises) would generate $459,000 of new revenue which amounts to 0.6% of the levy
3 For the purposes of calculating this increase, Minor Soccer revenues have been excluded from the 2005 comparative as the program will be re-
assumed by a community group in 2006. Additionally, 2005 comparatives have been restated to maintain consistency with the approach adopted in
2006 for budgeting for KMAC show settlements. If these adjustments were not made, the increase in total user fee revenue would be 0.3% for 2006
4 The Cemetery operating deficit was $174,827 in 2004
· Letters of Compliance - The fee for a compliance letter for a single, semi or duplex
dwelling would remain unchanged at $80. A new fee of $170 is proposed for industrial,
commercial, institutional or multiple residential properties as they are substantially more
complex and require more staff time and expertise.
· Standard Condominium and Condominium Conversion - The proposal would equalize
the fees for each type of application, which mirrors the approach taken in Waterloo and
Cambridge. The proposed fee is consistent with Hamilton and Burlington.
· Portable Signs - The standard fee would increase by $5 from $50 to $55. A new fee is
being established for portable signs with different content on each side ($80). Also, the
fee would double if the sign is installed before a permit is obtained.
· Part Lot Control - The current fee of $155 + $80 per lot is well below the 2004
Cambridge ($1,000) or Waterloo ($500) fee. The proposed fee is $800 +$85 per lot.
· Subdivision - The fee is proposed to increase by 10% (to $5,700 + $120/ha) as this is
an aspect of development review which requires a very substantial commitment of staff
resources, and for which the fees offset less than 50% of the associated staff cost.
· Municipal Plan Amendment - Proposed to increase by 10% given the complexity of
issues involved and the staff resources required to manage the public consultation.
Imoact of Strateaic Fee Adiustments
The combined impact of the strategic fee proposals discussed above (i.e., the amount beyond a
3% increase) is a revenue increase of $202,000. In the absence of these strategic adjustments,
the year-over-year increase in total fee revenue would be 2.6% rather than 3.9% as proposed.
FINANCIAL IMPLICATIONS:
As discussed above.
COMMUNICATIONS:
Ontario Regulation 244/02 requires that the City provide notice and hold a public meeting prior
to the adoption of fees for fire inspections and permit issuance. Twenty-one days public notice
has been provided for a public meeting to be held on December 5, 2005.
Planning Staff will present the proposed changes to Planning and Development Fees to the
Waterloo Regional Homebuilders Liaison Committee on November 17, 2005.
In accordance with the Municipal Act, all fees must be published annually and made available
for public inspection. A simplified version of the attached listing will be posted on the website.
CONCLUSION:
Staff has undertaken a comprehensive review of fees and charges and has attached the
proposed listing for 2006. Staff recommends that the listing be approved, with the exception of
fees for fire inspections and permits which are to be considered at a future public meeting.
Pauline Houston, CA
General Manager of Financial
Services & City Treasurer
Dan Chapman, CA
Director of Financial Planning
& Reporting