The cost of development in Oro-Medonte Township has been costing municipal taxpayers a small fortune each and every year since, well, forever.
According to the first comprehensive review and update of its user fees for the township's development services, building and planning divisions, done by Watson & Associates Economists Ltd., the municipality is currently recovering just 15 per cent — about $250,000 — of the annual $1.6-million cost of planning services from development application fees.
At the same time, the township is recovering about 64 per cent — around $1 million — of the annual $1.5-million cost of its building services from building permit application fees.
“The report clearly lays out a gap that needs to be filled,” Oro-Medonte Mayor Randy Greenlaw said following the presentation by Sean-Michael Stephen, managing partner at Watson & Associates, at last week’s council meeting.
“At the end of the day, this is putting the cost recovery on the individuals who are applying for the permits and not spreading it over the tax levy," the mayor added.
To stem the losses and recover as much of the real cost of services as possible, Watson & Associates has recommended fees relating to planning and engineering that are designed to improve cost-recovery levels to 71 per cent. (The consultants also provided the township with an analysis that details what fee increases would be required to reach 95 per cent cost recovery levels.)
The recommended fees proposed in building-permit revenues would result in a 46 per cent increase and would increase cost-recovery levels from 64 per cent ($1 million in revenue) to 94 per cent ($1.46 million in revenue) at average historical permit volumes.
Based on the forecast of building permit activity over the next five years, the recommended fees would result in full cost recovery, including providing contributions to the building department’s stabilization reserve fund as economies of scale are realized.
Some of the recommended planning and engineering fee increases are quite large.
A major Official Plan amendment would go from the current fee of $1,500 to $9,306. A minor Official Plan amendment, meanwhile, would go from $1,500 to $5,230.
A major zoning bylaw amendment, currently $1,500, would increase to $7,263, while a minor zoning bylaw amendment would go from $1,500 to $4,000.
A combined Official Plan amendment and zoning bylaw amendment, which is not accounted for currently, would cost $15,332 under the recommended fee.
A draft plan of subdivision will go from the current $5,000 fee to $25,000.
The recommended building permit fees also contain a few hefty increases, especially when it comes to septic systems.
The current fee for septic size verification is $119.93. The recommended fee is $450.
The current fee for septic tank replacement/holding tank replacement is $248.25 with a recommended increase to $750.
Coun. John Bard wondered aloud why the fee increases were so large in some cases.
“It’s my understanding that a review of this depth has not been completed in the Township of Oro-Medonte for the planning and building division,” said Brent Spagnol, Oro-Medonte's director of development services.
“My understanding is that there’s been comparison and comparable type reviews have been conducted, that take a look at surrounding municipalities, but one at this depth has not been completed before," he added.
According to Spagnol, there are a number of factors which have contributed to the increases, including legislative changes, the cost of employee salaries and benefits, as well as general inflation.
“When they (the fees) are not adjusted to reflect the cost of salaries, benefits and indirect costs, there tends to be a larger gap when those fees are not adjusted in a timely manner,” he said.
“What’s occurred over time is the cost of doing business has increased," Spagnol added. “Taking a look at this time, and trying to bring them closer to cost recovery, is important to reflect those changes."
According to Spagnol’s report, now that the fees and charges report has been completed and presented to council, township staff will host a public meeting for the fees associated with the building division’s fees bylaw.
That meeting is scheduled to be held in April, with an anticipated adoption in May or June.
“The public meeting will provide the opportunity for further questions and comments, which will be responded to prior to the introduction of an updated fees bylaw for council’s consideration,” Spagnol wrote in his report. “In preparation for the next steps, staff have co-ordinated a presentation for representatives from Watson and Associates to outline the methodology used to arrive at the recommended fees and report key findings to council.”
Notice of the public meeting will be sent directly to stakeholders, developers and builders, and will be posted online through municipal social media and the township’s website.