CITY OF ST. CATHARINES

BUILDING DIVISION

BUILDING BY-LAW AND PERMIT FEE REVIEW

2010

PREPARED BY SANDY BURROWS

CHIEF BUILDING OFFICIAL FEBRUARY 25, 2011

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EXECUTIVE SUMMARY The Building Code Statute Law Amendment Act (Bill 124) was implemented on January 1, 2006. With this in place it was now a requirement of a municipality to report annually on permit fee revenues and confirm that the Building Services Division is a revenue neutral operation. The primary purpose of the Ontario Building Code (OBC) is the promotion of public safety through the application of appropriate uniform building standards. It legislates a minimum provision respecting the safety of buildings with reference to public health, fire protection, accessibility and structural sufficiency. The “objective based format” of the OBC is intended to assist OBC users to understand the “why” behind the Code requirements as well as the “what”. However, it is still very prescriptive. The Building Code Act (BCA) provides municipalities with the authority to collect fees to recover the cost of administration and enforcement of the BCA and OBC. Regulations made under the BCA/OBC outline the details of what can be included as part of the cost including direct and indirect costs, and provisions for a reserve fund. The basic principle for providing building permit and inspection services is “Fee for Service”. This is also sometimes referred to as a “Business Model”. There is a specific requirement for cost accountability when establishing Building Code Act fees. Section 11.2 of Bill 124 restricts the use of building permit revenues to recover only the “reasonable anticipated costs” of activities mandated by the Building Code Act. These fees also include general overhead indirect costs related to the provision of service (e.g. Council corporate services, etc.) Also, the recognition of anticipated costs allows municipalities to include costs related to future compliance requirements or reserve fund contributions. Therefore, the Building Code Act fees should include direct costs, capital-related costs, indirect support function costs and general overhead indirect costs related to the service provided, as well as provisions for future anticipated costs. The revenues for 2010 are considerably higher than the previous years due mainly to two projects; the NHS Hospital project and the Brock University Health and Bio Science Complex with combined permit fees amounting to $1,543,742. If these fees are subtracted from the listed revenues for 2010, the revenues would only amount to $1,165,318 and the City would have seen a deficit in the amount of $665,515. This demonstrates how two large projects can considerably affect the revenues and the overall outcome of the Building Division’s budget. Any deficit must be funded from building permit stabilization reserves (as available) or the general tax base. The results of this review support the need for an increase in the current permit fees as well as the establishment of some new fees. It is evident that the current fees are extremely low and cannot recover the costs of operating the Building Division. The City of St. Catharines has not increased fees in the past six years and has operated in a deficit for the past four years with no Stabilization Reserve Fund to recover costs. It is recommended that the City adopt the “average fee” as determined by the survey conducted (details of which can be found in Part 2, Analysis of Historical Trends and Current Practices) which would result in the following increases:

GROUP %

A - Restaurant 30

B - Institutional 27

C - Residential House 7

D - Offices (Two Storey) 23

E - Retail 27

F - Industrial Building (3000m2)9

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With these increases applied to the permit applications received in previous years we would still have been in a deficit situation as is evident in Table 8 in Part 2 of this review. TABLE 7 shows the revenues and costs for the years 2006 to 2010 and the deficits that the City has had to absorb. 2010 is the only year showing a surplus which is a direct result of the NHS Hospital project and the Brock Bio Science Complex. The surplus funds seen in 2010 will provide the City with its first opportunity to establish a Stabilization Reserve Fund. Although these increases seem large, they are only bringing St. Catharines’ fees in line with the average fees of the municipalities surveyed. It must be noted that even with these increases implemented, it is not expected that these increases will be sufficient to cover the anticipated costs of operating the Building Division in 2011. Also identified in the survey are a number of additional fees that need to be established: a. Re-inspection fee

(for 3rd and subsequent “repeat” inspections”)

$100 per inspection

b. Permit Administrative Fee (administrative fee associated with building without a permit)

100% of original permit fee added to the original permit fee, not exceeding $5000

c. Refundable Inspection Fee Deposit $1000 for a single residential home and $4000 for townhouse developments

d. Marijuana Grow Operation Fee to Resolve File $1000 per file (up to 10 hours of staff time with an additional $100/hr for every hour over 10).

e. Alternative Solutions $400 per application (up to 4 hours of staff time with an additional $100/hr for every hour over 4)

f. Site Alteration Deposit $200 per lot when applying for a permit to construct an accessory structure

g. Request for Inspection Outside Normal Working Hours $100/hr with a minimum call out of 4 hours

Sub-section 7(6) of the BCA addresses “Changes in Fees” and states that if a principal authority proposes to change any fee, it shall give notice of the proposed changes in fees and hold a public meeting concerning the proposed changes. The regulations require municipalities to hold at least one public meeting and that at least 21 days notice be provided via regular mail to all interested parties. The regulations also require that such notice include, or be made available upon request to the public, an estimate of the costs of administering and enforcing the Act, the amount of the fee or change in existing fee and the rationale for imposing or changing the fee.

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An annual report is required by legislation to ensure that fees established by a municipality are adequate to recover the costs associated with the activities of the Building Division and provide a sufficient reserve fund to carry the Building Division through difficult times. This annual review enables the Chief Building Official (CBO) to reconcile costs and adjust fees as required on an annual basis. As already stated, in 2010 permit revenues were significant due to two major projects; the NHS Hospital Project and Brock Bio Science Complex. This is an example of how one or two major projects can dramatically affect the budget of the Building Division. These two major projects have resulted in a surplus in funds in 2010 which will provide the City with its first opportunity to establish a Stabilization Reserve Fund. This is an anomaly, not the normal circumstance based on the current permit fees. In accordance with legislation this surplus must be transferred to a Stabilization Reserve Fund to assist in future budget leveling for the Building Division. The Building By-law # 2005-319 which is a by-law to regulate matters pertaining to the Building Code also requires amendments that will be reflective of the new fees and processes established by the Building Division. It is necessary to update this By-law to ensure expectations are clear and a consistent approach can be maintained in applying new processes. A report will be forwarded to Council with the proposed changes and a public meeting to receive feedback will also be necessary.

Table of Contents

INTRODUCTION/BACKGROUND.................................................................................. 1

PART 1 - LEGISLATIVE REQUIREMENTS ................................................................... 2 Establishing Fees ...................................................................................................................... 2 Reserve Fund Policy Requirements.......................................................................................... 2 Mandated Cycle Times.............................................................................................................. 2 Reporting Requirements ........................................................................................................... 2 Municipal Performance Measurement Program (MPMP).......................................................... 2 Notification of Changes in Fees ................................................................................................ 3

PART 2 - ANALYSIS OF HISTORICAL TRENDS AND CURRENT PRACTICES......... 4

Fee Summary............................................................................................................................ 4 Fee Comparison........................................................................................................................ 4 Activity Based Costing Model .................................................................................................... 5 Historical Activity ....................................................................................................................... 6 Summary of Revenues.............................................................................................................. 8 The Need for Stabilization Reserves......................................................................................... 9 Mandated Cycle Times............................................................................................................ 10 Learning and Growth –Training and Succession Planning ..................................................... 12

PART 3: - ANALYSIS OF FEES................................................................................... 13

Existing Fees........................................................................................................................... 13 Identification of Possible New Fees and New Bylaw Requirements ....................................... 13

1. Re-inspection Fee........................................................................................................... 15 2. Permit Administrative Fee (Administrative charge associated with building without a

permit)............................................................................................................................ 16 3. Refundable Inspection Fee Deposit................................................................................ 16 5. Occupancy Certificates and Permits............................................................................... 18 6. Alternative Solutions ....................................................................................................... 19 7. Administrative Costs Associated with Orders ................................................................. 19 8. Site Alteration Deposit (associated with permits for accessory structures including

swimming pools, to address grading and drainage issues) ........................................... 20 9. Request for Inspection Outside Normal Working Hours ................................................. 20 10. Fast Track Permits........................................................................................................ 20

Summary of Recommended New Fees .................................................................................. 21

PART 4 – APPENDICES .............................................................................................. 22 1. Correspondence to Building Industry provided by CBO 2010

2. Annual Reports

3. MPMP Letter from Ministry (MMAH)

4. LMCBO Survey

5. Court of Appeal Ruling – 2072581 Ontario Inc. v. Hamilton (City) (2010)

6. OBOA Journal (Sept. 2010 Edition) – Article

7. Alternative Solution Form

INTRODUCTION/BACKGROUND The St. Catharines’ Building Division is responsible for the administration and inspection of all new construction within the City of St. Catharines. The main function of the Division is to protect lives by ensuring buildings are constructed to meet the health and safety provisions of the Ontario Building Code, the Building Code Act, the Building By-law, and other applicable laws and standards. The City is responsible for the enforcement of the Code to protect the health, safety and welfare of the public and building occupants. Builders, developers, landlords, business owners, and residents have a substantial investment that can be seriously jeopardized through code violations. The ultimate “customer” being served is the homeowner/occupant of the property that assumes that the occupied property has been duly inspected and every effort has been made to ensure that the property meets the code requirements. The Mayor’s Development Review Task Force was established in December 2007. During the first two years, this task force met regularly to identify, discuss and propose solutions to the concerns of the local development community, mainly focusing on planning timelines and processes. This past year the Task Force also directed their focus toward the building processes. In February 2010, the City of St. Catharines’ Chief Building Official (CBO) met with the building industry to review the current practices and procedures in the City of St. Catharines. This initial meeting seemed to be well received by the industry and the CBO was able to outline for the industry some of the steps taken by the Building Division to improve the quality of service provided to the public and the building industry over the previous 4 years. It was encouraging to be informed by the industry that the changes had not gone unnoticed. They seemed to appreciate the efforts made by City Staff to improve Staff effectiveness in reviewing permits and inspection procedures and agreed that periodic meetings and updates by the CBO would be beneficial to all. The CBO has continued the dialogue with the Building Industry in reviewing the Building By-law and the proposed new Rates and Fees associated with that By-law. It is the policy of the City of St. Catharines to review the City’s by-laws every 5 years. Since the City’s Building Bylaw #2005-319 was passed Dec 12, 2005, this by-law is due for review and update. As a result of this Building Process Review Study (conducted by the City’s CBO), the City’s Building By-law and the associated Rates and Fees must be updated to ensure that the By-law is accurate, current and in keeping with the intent of the Building Code Act (BCA) and the Ontario Building Code (OBC). Some amendments were initiated through feedback from the public, industry and Niagara Home Builders Association (NHBA), while others were made necessary by BCA/OBC amendments and other new initiatives.

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PART 1 - LEGISLATIVE REQUIREMENTS

Establishing Fees

Section 11.2 of Bill 124 restricts the use of building permit revenues to recover only the “reasonable anticipated costs” of activities mandated by the Building Code Act. Direct, indirect, reserve and capital-related costs associated with building permit activity can be included in establishing the fees. This includes recognizing anticipated costs such as future compliance requirements or reserve fund contributions. Reserve Fund Policy Requirements When surpluses are realized, these funds must be transferred into a reserve fund to be utilized for the purpose of the Building Code Act. The City must create a Building Permit Reserve used to fund capital expenditures and for stabilization of fees during economic downturns. It is necessary to develop a supporting reserve fund policy to assist in mitigating risks associated with economic downturns, anticipated compliance and other potential issues. Unlike past practices where building revenue surpluses could be used corporately, any surpluses now must be transferred to a reserve and used for Building purposes only. Mandated Cycle Times Bill 124 imposes mandatory cycle times in which an application must be reviewed and a permit must either be issued or the applicant must be informed in writing as to the reasons why the permit cannot be issued. A review of the City’s current practices indicates that, for the most part, the City is compliant with this requirement (some exceptions may exist during peak periods). This can be a challenge for the Building Division during peak periods and has been recognized by the Ministry in the new established Municipal Performance Measurement Program (MPMP) metrics being requested from the Ministry for the Building Division. Due to the nature of construction activity, the MPMP metric being requested is a median measure rather than an absolute. Reporting Requirements An annual report is required by legislation to ensure that the fees established by a municipality are adequate to recover the costs associated with the activity based costing and provide a sufficient reserve fund to carry the Building Division through any peaks and valleys that can occur in the construction industry. This annual review enables the CBO to reconcile costs and adjust fees as required on an annual basis. The report must contain the total amount of fees collected, the direct and indirect costs of delivering the services related to the administration and enforcement of the Act and any reserve fund established. The regulation also requires that notice of the preparation of the annual report be given to any person or organization that has requested such a notice. Municipal Performance Measurement Program (MPMP) The City of St. Catharines Council and Senior Staff received notification from the Ministry of Municipal Affairs and Housing under cover letter dated September 29, 2010, directing specific requirements for the MPMP measures for 2011. The Municipal Performance Measurement Program has been expanded in 2011 to include measures for building services. These measures are to be collected in 2011 and reported on in 2012, (see Appendix 3 for the Ministry’s letter and the required measures).

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Notification of Changes in Fees Related to public requirements for the imposition or changes in fees, Article 1.9.1.2 of Division C of the OBC states: 1.0.1.2 Change of Fees (1) Before passing a by-law, regulation or resolution under clause 7(1)(c) of the Act to introduce or change a fee imposed for applications for a permit or for the issuance of a permit, a principal authority shall:

(a) hold at least one public meeting at which any person who attends has an opportunity to make representations with respect to the matter,

(b) ensure that a minimum of 21 days notice of the public meeting is

given in accordance with Clause (c), including giving 21 days notice to every person and organization with such notice and has provided an address for the notice,

(c) ensure that the notice under Clause (b),

(i) sets out the intention of the principal authority to pass the by-law, regulation or resolution under section 7 of the Act and whether the by-law regulation would impose any fee that was not in effect on the day the notice is given or would change any fee that was in force on the day the notice is given,

(ii) is sent by regular mail to the last address provided by the

person or organization that requested the notice in accordance with Clause (b), and

(iii) sets out the information described in Clause (d) or states

that the information will be made available at no cost to any member of the public upon request, and

(d) make the following information available to the public:

(i) an estimate of the costs of administering and enforcing the Act by the principal authority,

(ii) the amount of the fee or of the change to the existing fee, and

(iii) the rationale for imposing or changing the fee. Since the implementation of Bill 124 in 2006, building permit fees in the City of St. Catharines have remained unchanged, despite additional legislative changes, industry pressure for faster and more effective services, and inflationary costs associated with labour laws. In fact, the fees in St. Catharines have not changed since 2005.

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PART 2 - ANALYSIS OF HISTORICAL TRENDS AND CURRENT PRACTICES

Fee Summary TABLE 1 summarizes the building permit fees per square foot in the City of St. Catharines over the past six years. The City of St. Catharines has not increased its building permit fees for the past six years and there is also no reserve fund established as a stabilization reserve. Conversely, new positions created as a result of Bill 124 have increased the budgetary requirement as well as the annual salary increases that are consistent with the collective agreement and cost of living increases.

TABLE 1

PERMIT TYPE YEARS 2005 - 2010

Assembly - (Group A) $1.20

Institutional - (Group B) $1.40

Residential (Group C) $0.90

Business and Personal Services (Group D) $1.16

Mercantile - (Group E) $0.90

Industrial - (Group F) $0.75

Fee Comparison A comparison of building permit fees in 2010 was undertaken. There were two separate surveys conducted in comparing fees. First a comparison to other municipalities in the Niagara Region was completed through the CBON group (Chief Building Officials of Niagara). Unfortunately, since St. Catharines is the largest of all of the municipalities in the Region, the results of that comparison are somewhat skewed. A better understanding of St. Catharines’ requirements can be determined by comparing it to like communities. Therefore, a second survey was conducted with other larger, similar municipalities who belong to LMCBO (Large Municipality Chief Building Officials). This provides for a more substantial analysis since the staffing and permitting requirements (and therefore the revenues and costs of operations) are in better alignment. As shown in TABLE 2, St. Catharines’ fees are lower than the majority of other larger municipalities surveyed. The differential between the average fee and the fee for St. Catharines was only 7% for residential construction and 9% for industrial construction. However, the differential for commercial construction ranges from 23-30%. In reviewing the fees for residential, for example, the fees for residential building ranged from a low $0.68 per sq.ft. in London and $0.80 per sq.ft. in Waterloo to a high of $1.21 per sq.ft. in Cambridge. Based on research, a number of municipalities have recently either updated or are in the process of updating their fee structure to reflect the impact of the new legislative and regulatory changes. It must be noted that every municipality is different as the amount and type of construction varies from municipality to municipality. Some municipalities will experience a high volume of construction in the form of apartment buildings such as Waterloo, whereas other municipalities such as St. Catharines have very limited construction activity in the form of apartment buildings. This will reflect upon the necessary fees required. It is expected that there will be more townhouse and apartment projects in St. Catharines in the future as redevelopment becomes the dominant development trend but it is unclear how long it may be before this trend is realized.

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In discussion with the CBO from London, London is also in the process of reviewing their fees with an expectation of a significant increase. Waterloo however does not plan to make any changes to the current permit fees as they have a healthy Stabilization Reserve Fund and the building activity is providing sufficient funds to cover their annual costs.

TABLE 2

Municipality PopulationGroup A

RestaurantGroup B

Institutional

Group C Residential

House

Group D Offices (Two

Storey)Group E

Retail

Group F Industrial Building

(3000m2)Barrie 140,000 $1.53 $2.00 $1.00 $1.41 $1.21 $0.77Brampton 497,000 $1.21 $1.46 $0.98 $1.11 $0.86 $0.74Brantford 91,192 $1.27 $1.64 $0.86 $1.16 $0.81 $0.61Burlington 172,400 $1.71 $1.94 $0.89 $1.51 $1.27 $0.69Cambridge 131,000 $2.27 $2.42 $1.21 $1.92 $1.36 $0.84Guelph 124,000 $1.95 $2.11 $1.04 $1.65 $1.16 $0.72Hamilton 519,109 $1.74 $2.08 $1.17 $1.54 $1.28 $0.90Kitchener 204,668 $2.27 $2.43 $1.15 $1.93 $1.36 $0.78London 362,000 $1.13 $1.56 $0.68 $1.08 $0.74 $0.54Markham 300,141 $1.33 $1.44 $1.00 $1.10 $0.94 $0.77Milton 81,000 $1.14 $1.40 $0.91 $1.14 $0.84 $0.56Mississauga 729,000 $1.31 $1.55 $0.96 $1.10 $0.97 $0.70Niagara Falls 82,184 $1.45 $1.45 $0.94 $1.45 $1.18 $0.57Oakville 177,200 $1.99 $2.06 $1.07 $1.48 $1.48 $1.02Oshawa 150,000 $1.67 $1.81 $0.98 $2.24 $2.04 $0.95Richmond Hill 183,000 $2.29 $2.51 $0.88 $1.89 $1.59 $1.27St. Catharines 131,989 $1.20 $1.40 $0.90 $1.16 $0.90 $0.70Vaughan 275,000 $1.23 $1.44 $0.91 $1.02 $0.86 $0.71Waterloo 120,800 $1.60 $1.70 $0.80 $1.35 $0.95 $0.55Windsor 217,187 $1.35 $1.45 $0.95 $1.40 $1.30 $0.90Welland 50,500 $1.20 $1.41 $0.91 $1.14 $0.91 $0.59AVERAGE $1.56 $1.77 $0.96 $1.42 $1.14 $0.76

Note: The City of Ottawa will be phasing in a fee schedule similar to the municipalities noted abovePresently the City of Ottawa uses an Estimated Value of Construction method to determine feesat $12 per $1000 of Construction Value

Permit Fee Comparison (LMCBO) per SqF

TABLE 3

Municipality PopulationGroup A

RestaurantGroup B

Institutional

Group C Residential

House

Group D Offices (Two

Storey)Group E

Retail

Group F Industrial Building

(3000m2)Fort Erie 27,698 $1.09 $1.23 $0.87 $1.03 $0.84 $0.56Grimsby 23,927 $1.21 $1.42 $0.84 $1.13 $0.87 $0.52Lincoln 21,725 $1.49 $1.64 $1.16 $1.20 $1.00 $0.70Niagara Falls 82,184 $1.45 $1.45 $0.94 $1.45 $1.18 $0.57Niagara on the Lake 13,661 $1.87 $2.06 $1.34 $1.74 $1.74 $0.88Pelham 16,155 $1.04 $1.04 $0.89 $1.04 $1.04 $1.04Port Colborne 18,003 $0.95 $1.15 $0.80 $0.85 $0.75 $0.45St. Catharines 131,989 $1.20 $1.40 $0.90 $1.16 $0.90 $0.70Thorold 17,646 $1.16 $1.30 $1.00 $1.20 $1.02 $0.65Welland 50,500 $1.20 $1.41 $0.90 $1.14 $0.91 $0.59West Lincoln 11,746 $0.95 $1.04 $0.70 $0.96 $0.69 $0.46AVERAGE $1.24 $1.38 $0.94 $1.17 $0.99 $0.65

Permit Fee Comparison (CBON) per SqF

Activity Based Costing Model The City of St. Catharines’ Building Division is operated as an Activity Based Costing Model which is basically a business model. This means that the goal is to recover 100 % of the costs of operations from the fees (revenues) collected. This is consistent with the approach of other municipalities and the existing legislation. The Division tracks activity annually and makes projections of the level of activity to develop a fee structure. However, it is difficult to balance, on an annual basis, the revenues that will be generated from building permits.

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Historical Activity Building Activity is very dependant upon the status of the current economy and therefore has a direct impact on the revenues generated. For example, one large project can result in surplus revenues, such as the revenues generated by the NHS hospital project in 2010. Even minor changes in residential construction activity have an impact on revenue recovery as this is usually a large share of the activity and source of revenues. A changing trend is expected to be realized in the near future in St. Catharines as the available lands for new subdivisions are limited. It is expected that there will be more townhouse and apartment projects as redevelopment becomes the dominant development trend however, it is difficult to establish a timeline associated with this expectation. The cost of operations, on the other hand, remains relatively consistent. Staffing levels must be maintained as staff are highly trained and not easily replaced. Therefore these costs are considered to be fixed and cannot be immediately adjusted to react to the fluctuations in the levels of construction activity. The following, (TABLES 4-6) reflect the construction activity in St. Catharines from 2006 to 2010. TABLE 4 shows the construction value for all permits, TABLE 5 is for industrial, commercial and institutional (ICI) permits and TABLE 6 is for residential permits only. As shown in the graphs, there has been a significant fluctuation in activity from year to year and across the various types of construction activity. This volatility has a direct impact on the annual revenues generated from fees and the Division’s ability to balance the budget. In the year 2010 a total estimated value of construction was $721,953,810. The largest contributor to this was the Niagara Health System’s (NHS) Hospital project which accounts for $511 million of estimated construction value all on their own. A few other additional projects that are not considered to be typical construction that can be relied upon annually would be Brock University’s Bio Science Complex which was estimated at just under $70 million construction value, and the General Motors Addition estimated at $24 million. Also, the government’s stimulus program projects such as the Carlisle Parking Garage added $17 million in estimated construction value. In 2009 we were fortunate to have the hospital project raise the construction values by $40 million that year in the early construction phase as well. That brought the total for 2009 to $143,813,482 in construction value. Previously, in 2006, 2007, and 2008 the estimated value of construction was steady at around the $100 million mark.

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TABLE 4

Total Estimated Value of Construction (All permits)

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

2006 2007 2008 2009 2010

TABLE 5

Total Estimated Value of Construction (ICI only)

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

2006 2007 2008 2009 2010

TABLE 6

Total Estimated Value of Construction (Residential only)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

2006 2007 2008 2009 2010

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Summary of Revenues

As shown in TABLE 7, revenues from building permits also fluctuate annually.

TABLE 7

BUILDING REVENUE BY GL ACCOUNT GL Account # Revenue for 2010 Revenue for 2009 Revenue for 2008 Revenue for 2007 Revenue for 2006

711.100.800 $2,893.00 $1,616.32 $3,540.48 $2,198.75 $716.59

615.105.000 $2,638,550.00 $814,479.00 $1,216,081.79 $1,098,328.31 $1,177,289.48

615.110.000 $21,992.00 $33,722.00 $26,202.64 $23,551.03 $26,462.08

615.115.000 $45,625.00 $43,609.00 $25,895.00 $40,212.00 $32,933.50

$2,709,060.00 $893,426.32 $1,271,719.91 $1,164,290.09 $1,237,401.65Without Hospital and Brock Bio Science Complex Revenues for 2010 $1,165,318.00

Direct and Indirect Costs 2010 2009 2008 2007 2006

$1,830,833.22 $1,719,879.69 $1,833,060.83 $1,671,404.99 $1,500,588.93

Total Revenue for Year (Deficit is denoted by brackets) 2010 2009 2008 2007 2006

$878,226.78 ($826,453.37) ($561,340.92) ($507,114.90) ($263,187.28)Deficit for 2010 Without Hospital and Brock Bio Science Complex Revenues for 2010

($665,515.22)

Estimated Additional Revenues With Proposed Increases Applied To Permit Revenues From Past Years

2010 2009 2008 2007 2006 Without Hospital and Brock Bio Science Complex Revenues for 2010 $157,967.00 $114,200.00 $222,791.00 $164,292.00 $182,865.00

Adjusted Summary With Proposed Increases Applied To Permit Revenues From Past Years 2010 2009 2008 2007 2006

Without Hospital and Brock Bio Science Complex Revenues for 2010 ($507,548.22) ($712,253.37) ($338,549.92) ($342,822.90) ($80,322.28)

711.100.800 Administrative Overhead i.e. photocopies, file retrieval, etc.

615.105.000 Bldg, demo, change of use, inspections, agreements (spatial, demo, etc)

615.110.000 Plumbing only permits and occupancy permits for non-residential

615.115.000 Sign permits

The revenues for 2010 are considerably higher than the previous years due mainly to one project that being the new hospital, with permit fees for that one project being $1,334,036. If these fees are subtracted from the listed revenues for 2010, the revenues would only amount to $1,375,024 and the City would have again seen a deficit in the amount of $445,809. One other project of interest that assisted in generating permit revenues would be the Brock University Health and Bio Science Complex with permit fees of $209,706. With this project not included and the permit revenues adjusted accordingly, the revenues would only amount to $1,165,318 and the City would have seen a deficit in the amount of $665,515. This demonstrates how two large projects can considerably affect the revenues and the overall outcome of the Building Division’s budget. Any deficit must be funded from building permit stabilization reserves (as available) or the general tax base.

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TABLE 8 demonstrates a breakdown of these revenues by the type of construction shows that the majority of permits are for residential and commercial works. A dip in the economy can affect any one or even all of these types of construction and have a direct impact on the revenues and the ability to recover costs. The residential permits include single and multi-unit new construction as well as renovations, additions, decks and secondary buildings such as sheds and gazebos. The commercial permits include mercantile, assembly and business and personal service type occupancies.

TABLE 8

Revenues Generated (Average for 2006 to 2010)

Residential56%

Institutional4%

Industrial7%

Commercial33%

The Need for Stabilization Reserves Staffing levels currently appear to be adequate to meet the expected levels of service to meet the requirements of Bill 124 and the local building industry. In reviewing the past years, it can be seen that staff has improved their efficiencies in meeting the required timelines. The next step in the progression would be the necessity to create a sustainability model and maintain a reserve fund to ensure that these efficiencies are maintained. The intention of the sustainability model is to capture 100% of the costs associated with the administration and enforcement of the BCA and OBC. The City of St. Catharines’ Building Division is operated as an Activity Based Costing Model. This is consistent with the approach of other municipalities and is in keeping with legislative requirements and best practices. The costs associated with the operations of the Building Services Division are considered to be fixed costs that cannot be easily or immediately adjusted to the changes in the levels of construction activity. There is expected to be some level of fluctuation of work load from one year to another, however the BCA/OBC enforcement staff are highly technical and must attain extensive training to meet qualifications required by legislation. Therefore, staffing levels must be maintained through the peaks and the valleys of construction activity. This is essentially the reason that Bill 124 introduced the requirement for a “Stabilization” Reserve Fund. Some municipalities have established a ceiling for their Reserve Fund. The Reserve Fund can also be a source of funding for a one time capital cost that can be attributed to BCA/OBC requirements or support activities such as mobile equipment or new positions if required. It should be noted that in the past 4 years the City of St. Catharines has been operating in a deficit with no reserve fund to offset those costs. Some municipalities establish a target reserve maximum balance of 100% to 150% of the annual operating budget expenditures while others simply transfer any excess revenue into the reserve fund on an annual basis with no target and no limit. The following provides a summary of the reserve policy on maximums of municipalities surveyed:

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TABLE 9

Brampton ** No target, no limit (any excess goes to reserve fund) Brantford 100% (of annual operating budget) Burlington 100% (of annual operating budget) Cambridge No target, no limit (any excess goes to reserve fund) Hamilton 150% (of annual operating budget) Kitchener 100-150% (of annual operating budget) London 30-50% (of annual operating budget) Markham ** Currently < 10% Milton 150% (of annual operating budget) Mississauga No target, no limit (any excess goes to reserve fund) Niagara Falls No target, no limit (any excess goes to reserve fund) Oakville 150% (of annual operating budget) Ottawa 100% (of annual operating budget) St. Catharines ** Currently no reserve available Toronto No target, no limit (any excess goes to reserve fund) Vaughan 150% (of annual operating budget) Waterloo $1 million Welland ** Currently no reserve available Windsor ** No target, no limit (any excess goes to reserve fund)

NOTE: ** These municipalities have had a difficult time maintaining a reserve fund due to a variety of reasons including excessively low permit fees and the recent economic downturn. A stabilization reserve manages the risk associated with the economic downturn and is also available to fund one-time capital requirements to avoid fluctuations in fees. Based on legislation, this reserve fund cannot be used for any other City purpose. It is a segregated fund specifically established for the Building Division cost recovery. This is to ensure that the taxpayer is not left to pay for any deficits that should be borne by the building industry. Mandated Cycle Times If a complete application for permit is submitted to the Building Service Division, the following permit timeline guidelines apply in accordance with Division C, Table 1.3.1.3 of the OBC (TABLE 10).

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TABLE 10

PERMIT TIMETABLE GUIDELINES (Division C Table 1.3.1.3.)

10 DAYS 15 DAYS 20 DAYS 30 DAYS Accessory Structures: Detached garage Swimming Pools Sheds, decks &

carports Wood burning stoves Masonry fireplace Buildings < 108 sq ft

that contain plumbing

Part 9 Buildings: (Small Buildings) Groups C, D, E, F-2, F-3 Where the building

area is, > 10 m2 (108 sq ft), but not > 600 m2 (6460 sq ft) in building area, & 3 storeys or less in building height

Part 3 Buildings: (Large Buildings) Groups A, B, F-1 & Groups C, D, E, F-2 & F-3 Where building is, >600 m2 (6460 sq ft) in

building area, or > 3 storeys in building

height

Part 3 Buildings: (Complex Buildings)

Containing a mezzanine or interconnected floor space (3.2.8.3 to 3.2.8.11) or is a high rise building (3.2.6.)

Residential: Detached House Semi-detached house Townhouse, Rowhouse

Residential: (unit above another unit) Duplex Multiplex

Minor Alterations: Single partitions,

demising walls, washrooms

Farm Buildings: not > 600 m2 (6460 sq

ft) in building area

Farm Buildings: > 600 m2 (6460 sq ft)

in building area

Miscellaneous Residential:

Additions, interior alterations, attached garage or carport, roofed porches, finished basements

Tents: If > 2420 sq ft, or Occupant load is > 300

persons, or erected for > 14 days.

Fire & Life Safety: Fire alarm, emergency lighting, sprinklers, stand pipe, commercial exhaust hood, spray booth, dust collector, fixed extinguishing systems, electro magnetic locking devices, hold-open devices

Post Disaster Building: (hospital, fire station, police station, radio station, telephone exchange, power station, electrical sub-station, water and sewage pumping station, fuel depot)

Signs: Pole, Ground,

Projecting or Roof Portable

Interior Alteration: Part 9 Small Buildings

Portable Classrooms: New or re-located

Designated Structures: Retaining walls,

Communication towers, Pedestrian bridge appurtenant to a building, Crane runways, Exterior storage tanks, Dish antennae or solar collectors, Outdoor pools, Public pools, Public spas

Miscellaneous: Canopy or Marquee Racking system Balcony guard repair Balcony repairs Parking garage repair

Interior Alteration: Part 3 buildings

Foundation Only: All Buildings

HVAC ONLY: Detached house Semi-detached house townhouse, row house,

multiple (not > four dwelling units)

HVAC ONLY: Part 9 building (small

buildings) Duplex Multiplex > Four Dwelling Units

HVAC ONLY: Part 3 buildings

HVAC ONLY: Part 3 buildings

(Complex building) Post Disaster buildings

PLUMBING ONLY: Water lines, sewer

replacements, septic tank changeover, Site Servicing (Part 9 )

PLUMBING ONLY: Site Servicing – all

buildings other than Part 9

CHANGE OF USE: No Construction

Demolition: (All Buildings)

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The Building Division has greatly improved their efficiency in this area over the past 4 years with the majority of reviews being completed within these timelines (see Appendix 1 for the details provided to the building industry in 2010). As with other municipalities, it is difficult during the peak periods to meet every timeline but every effort is made to ensure the best possible turn around time. During the recent meetings with the CBO over the past year, the building industry has also indicated that these improvements have also been well received by the industry and are much appreciated. In discussion with the building industry the Building Division is going to start following the lead of many other municipalities and start using the form “Acknowledgement by Applicant of an Incomplete Application” pursuant to Division C 1.3.1.3(5) of the OBC. The Ministry has implemented a new Application form which also assists the building staff to determine if an application is complete. Timelines are not applied to incomplete applications therefore incomplete applications need to be identified in order to ensure accurate reporting for the new Municipal Performance Measurement Program (MPMP). This will also result in more time dedicated to the intake of the application but should result in a more expeditious review of an application that is identified as complete. The Building Division will continue to provide the additional service that is currently enjoyed by the industry by accepting and reviewing applications that are not considered complete due to applicable laws being absent such as Site Plan Agreements, Minor Variances, Ministry of Transportation permits, etc. Learning and Growth –Training and Succession Planning The OBC enforcement staff is highly technical and must attain extensive training to meet qualifications required by legislation. The make up of residential construction projects in the City of St. Catharines has shifted to more in-fill developments rather than the historical Greenfield subdivisions. Renovations and additions are also more common. These types of projects are typically more labour intensive and time consuming but do not generate sufficient revenue to fully cover the cost of the BCA/OBC enforcement Ongoing changes to legislated requirements, including the OBC, results in on-going training to obtain and/or retain minimum technical qualifications. The OBC is scheduled for another revision by 2011 which will result in additional retraining and updating to ensure staff has the most current information. This also translates into budgetary costs for training.

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PART 3: - ANALYSIS OF FEES

Existing Fees Based on the Analysis in Part 2 of this review, the existing fees are required to be increased in accordance with TABLE 11. St. Catharines’ fees are substantially lower than the majority of comparable large municipalities. The City of St. Catharines has not increased fees in the past six years and has operated in a deficit for the past four years with no stabilization reserve fund to recover costs.

TABLE 11 PROPOSED FEE INCREASES

GROUP %

A - Restaurant 30

B - Institutional 27

C - Residential House 7

D - Offices (Two Storey) 23

E - Retail 27

F - Industrial Building (3000m2) 9

With these increases applied to the permit applications received in previous years we would still have been in a deficit situation as is evident in TABLE 7 in Part 2 of this review. TABLE 7 shows the revenues and costs for the years 2006 to 2010 and the deficits that the City has had to absorb. 2010 is the only year showing a surplus which is a direct result of the NHS Hospital project and the Brock Bio Science Complex. The surplus funds seen in 2010 will provide the City with its first opportunity to establish a Stabilization Reserve Fund. Establishing an optimum permit fee will be a dynamic process over the next few years as the development trends of the City change, along with the amount and type of construction. This fee adjustment is only a starting point and the development expectations for the City of St. Catharines must be reviewed annually along with the “reasonable anticipated costs” of activities for the Building Division.

It is acknowledged that there are a few large scale projects that are currently at the conception phase for future years but it is difficult to know if or when these projects will actually proceed. Because the construction industry can be volatile and uncertain, it is best not to assess fees on uncertainty. To ensure that the City does not revert back to a deficit balance in 2011, it is necessary to adjust the Schedule of Rates and Fees in regard to any activities that are related to the administration and enforcement of the Building Code Act and Ontario Building Code. As a starting point, it is suggested that the City adopt the “average fee” for the various permits as determined by the survey conducted. This is a substantial increase in fees but is necessary in order to recover the necessary costs of operations. It is expected that the newly established fees will assist to recover costs as well; however another series of increases may be necessary. The fees are reviewed annually with a complete fee analysis and an annual report forwarded to Council and the Ministry. This provides the CBO with the opportunity to revise those fees on an annual basis.

Identification of Possible New Fees and New Bylaw Requirements TABLE 12 is a Comparison Chart showing the results of a survey taken from similar municipalities that belong to LMCBO.

Municipality Permit Administrative Fee (additional fee to the original permit fee)

Maximum Penalty (for Permit Administration

Fee)

Reinspection Fees (per inspection)

Minimum Permit Fee

Request for Inspection Outside Normal Working

Hours

Alternative Solutions Administrative Costs Associated

with Orders

Temporary Structures (i.e. trailers)

Security Deposits (grading, sidewalks, road mudding)

Refundable Inspection Fee

Deposit

Site Alteration Permit

St. Catharines (Current)

no charge n/a no charge $66 no charge no charge no charge cost based on occupancy (only if no wheels or if there is

plumbing)

security deposit for sidewalk damage only, $327.-668 for residential, $151/m for

commercial

no charge None

St. Catharines (Proposed)

100% $5,000 $100 $100 $100/hr (min 4 hrs) $400 (includes 4 hrs review, $100/hr for >

4 hrs)

no charge cost based on occupancy (only if no wheels or if there

is plumbing)

security deposit for sidewalk damage only, $327.- $668 for residential,

$151/m for commercial

$1000 per unit (res.) max 4 units

$200 per lot (associated with permits for accessory

structures)

Kitchener 200% $5,000 no charge $77 $60.00/hr (min $120) no charge no charge cost based on occupancy (only if no wheels or if there is

plumbing)

$95/m blvd max $1000(res.)$5000(

non-res.)

$100 plus $50 renewal fee

Ottawa 50% $10,000 $100 $80 no charge no charge no charge $12 per $1000 EVC none $1000 per unit (res.) max 4 units

no permit required (Fined for non-compliance)

Hamilton *** 25%, 50% & 100% no max $120 $120 no charge $400 (4 hours), $120/hr additional

no charge cost as per occupancy (only if used for sales)

$1000 new construction only no charge $200 if less than 2 ha; $500 if more than 2 ha plus $25 ea

additional haNiagara Falls 100% no max $60 $75 $90/hr (min $240 wk/end

and holidays)no charge no charge Min fee plus $1000-$2000

LOC$1500 covers all items Site alteration sec.

10% of work to max $250no charge $100 (agricultural properties

only)

Richmond Hill higher of 25% or $100 no max $100 $75 & $150 no charge no charge no charge no permit required $3000-$20000 with Site Alteration Permit $7000 for LG & $3000 for Blvd

no charge $500 per Hectare

Barrie 25% min $150 $110 $125 and $175 $110/hr $225/hr no charge $5.40/m2 sales only $500/ha in securities(not enough for securities)

$150.00 (commercial)

$500/ha

Welland 10% ea phase of constr. min $121 $63 $90 $63/hr (min $225) no charge no charge no permit required $250-$1000 no charge No permit but a fee of $90

Kingston 40% $10,000 $50 no charge no charge $100 Property Standards Admin. Fee & $50 re-insp fee on Prop. Standards

$12 per $1000 EVC only w/ plumbing or hydro

only if cost of works exceeds $50,000 for a site alteration permit (usually not

applicable)

no charge $377 + HST (max 3 hrs review) renewal is 50% of original charge

Guelph no charge n/a no charge $75 no charge no charge no charge no permit required $25-$75 per m or $575 no charge $250 plus $50 per ha

Burlington 100% $5,000 no charge $175 no charge no charge no charge $16.24/m2 min $185 100% the cost of site alteration in a LOC (on and off site)

no charge $500 +$25 per ha if greater than 0.2 ha or $80 plus $40 -

$250 renewal feeBrantford $250, $750 & $1500 $150 $100 Prop.

Standards Order, $25 Title Search charged to Taxes

$11 per $1000 EVC None no charge None

Cambridge 100% $5,900 no charge $1.92/sf only with plumbing None no charge $500 plus $100 per ha $100 renewal

London 100% $5,000 $120 $90 $72/hr no charge no charge No permit required only a Plumbing only for servicing if

there is plumbing typically $60

Yes for infil lots, model homes & conditional permits.$2000 -$10000 with

demolition

no charge Yes, only for EPA lands and lands subject to draft subdiv. Approval fee unknown (Note: $475.00 for the initial inspection and $950.00 for the compliance inspection (and the Health Unit has a fee of $750.00) as well.)

NOTL 100% no max $50 $85 $95/hr no charge no charge $110 $1075 new const. $825 sidewalk damage no charge $100-$200 Approx.

Oakville 50% 1000(Res) $5000 (non-Re $200 $200 $100/hr (min 3 hrs) $1000 Min ($100/hr after 10 hrs)

no charge $282 $1500-$3000 with Site Alteration Permit no charge $235-$700

Oshawa 25% & 50 % no max $103 $103 $103/hr (min 4 hours) $103/hr (min 4 hours) no charge 11.89/m2 only w/ plumbing $18/m minimum $450 no charge $164 to $546 plus $27 ha; with a $82-$164 renewal fee

Table 12 - Comparison of Potential New Fees

Notes to Table 12Permit fees for all municipalities listed in Table 12 are based on SI X A (except Ottawa and Kingston)where: SI = Service Index for Classification of the work proposed and

A = floor areaKingston Permit fees are based on $12.00 per $1000.00 of construction valueOttawa Permit fees are based on $13.50 per $1000.00 of construction value

Oshawa 25% if construction started and permit application received but not issued50% if construction started and no permit application submitted

Hamilton Permit Administrative fee depends on stage of construction(under appeal) footings - 25%

above ground - 50%completed - 100%

Barrie Minimum Permit fee is $125 for Group C buildings and $175 for all other

Richmond Hill Minimum Permit Fee is $75 for Residential and $150 for Non- Residential

Brantford Order to comply $250Stop Work $750Prosecution $1500Registration and Discharge of Property Standards Order is $100 each

This survey was conducted to assist City Staff in determining what new fees should be added to the current Rates and Fees to recover the costs of services that have not previously been identified as requiring remuneration. The new fees that were considered include:

1. Re-inspection Fee

2. Permit Administrative Fee (Administrative charge associated with building without a permit)

3. Refundable Inspection Fee Deposit (Permit Rebate)

4. Marijuana Grow Operation Fee for Service

5. Occupancy Certificates and Permits

6. Alternative Solutions

7. Administrative Costs Associated with Orders

8. Site Alteration Deposit (associated with permits for accessory structures including swimming pools, to address grading and drainage issues)

9. Request for Inspection Outside Normal Working Hours

10. Fast Track Permits

1. Re-inspection Fee Where an inspection request is premature and the inspector must re-attend the site to complete the necessary inspection, upon notice to the owner there will be an additional fee of $100 per inspection. For example: a typical single detached dwelling would require 11 inspections. We consider two attempts to pass inspection should be adequate, since the inspector has indicated the deficiency on the first inspection and would only expect to be called back if the deficiency is corrected. Often, the inspector is called back multiple times for the same inspection. Also, it often occurs that an inspector is called out to perform an inspection when the work is not completed and therefore not ready to be inspected. There is a requirement (in accordance with Division C, Sentence 1.3.2.2(1) of the OBC) that approved plans must be available on site. The inspector must refer to these plans to verify that the construction has been completed in accordance with the approved plans. During the discussions with the building industry the CBO explained the necessity for having the drawings available at the time of the inspection. Therefore, if

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the approved plans are not available on site at the time of inspection, as directed on the permit issued by the City and in accordance with Section 18.-(1) of the BCA, the inspector will have no other choice but to identify the inspection as not ready. This will require a re-booking for the same inspection on a different date. As an incentive to ensure the work is complete and drawings are on site, a re-inspection fee is recommended for any one type of inspection (i.e. footings, foundation, framing, insulation, final) that requires more than two inspections for acceptance. In other words, a fee will be charged for each additional inspection past two for the same deficiency.

2. Permit Administrative Fee (Administrative charge associated with building

without a permit) The purpose of this fee is to cover the additional costs the municipality must incur in order to bring the person and the construction that is underway without the benefit of a permit, into compliance. It allows the City to recover costs or some of the costs of the additional work and enforcement necessitated due to the premature start of the work. Additional to the costs of the enforcement actions, title searches, and inspections, the cost of time spent by some of the City’s more senior management and legal staff must also be included due to the illegal construction and potential liability to which the municipality could possibly be exposed. This fee will apply where commencement of construction, demolition or changes to the use of a building has occurred before having submitted an application for a permit and/or before having received a permit. It is recommended that 100% of the regular permit fees be added to the regular permit fee before it is issued, but this amount shall not exceed $5000. (see TABLE 12 for comparison to other municipalities). The authority for this type of fee was supported in the Court of Appeal ruling 2072581 Ontario Inc. v. Hamilton (City) (2010), 69 M.P.L.R. (4th) 25 (Ont. C.A.) which is attached as Appendix “5” . The Court of Appeal held that: “Section 7(1)(c) of the Act provides clear authority to the City to require the payment of fees on applications for and on the issuance of permits. In our view, this includes permits issued after construction has commenced, as contemplated by s. 7(1)(a) of the Act.” According to an article published by John Mascarin, Aird & Berlis LLP, in the September 2010 edition of the Ontario Building Official Association’s Journal which is attached as Appendix 6: “the reference to clause 7(1)(a) of the BCA is to a municipal Council’s jurisdiction to prescribe classes of permits ‘including permits in respect of any stage of construction or demolition’ which is a clear indication that the Legislature had contemplated the possibility of construction or demolition work taking place before a permit is issued.” 3. Refundable Inspection Fee Deposit This is a fee in addition to the fees paid at the time of application and is payable at the time of submission of the application for permit. (For single, semi-detached, and row house dwellings only). Upon issuance of the final occupancy permit, this fee would be refunded, less any additional re-inspection fees incurred by the City. The refundable inspection fee shall be forfeited if the final occupancy permit has not been issued within three (3) years from the date of issuance of the permit to construct. It is recommended that the City establish a deposit/rebate program which would encourage the completion of final inspections and provide a mechanism to recover the costs associated with re-inspections. This is a strategy that has been successful in other municipalities. It has lead to improvements in the overall industry standards and a significant reduction in the number of open files that have not had their final inspection. The City of St. Catharines currently does not require, as part of its permit process, applicants to provide a deposit to be returned upon completion of final inspection. Frequently, as is the case in other municipalities without a required deposit, there is little incentive for the builder to contact the City to undertake a final inspection. This results in a large number of files being left open which creates administrative problems and potential concerns with respect to compliance with the OBC.

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TABLE 13

Year Permit Application Submitted

Number of Open Files Remaining

1994-1999 42 1999 10 2000 78 2001 99 2002 117 2003 111 2004 139 2005 186 2006 127 2007 153 2008 183 2009 201

Kitchener used a rebate strategy which required the applicant to provide a $500 deposit for each unit of residential new construction (in addition to any other applicable fees for the permit). From the day of occupancy, the builder would have a total of 270 calendar days to initiate the final inspection. If the builder did not meet the 270 day time frame, the City would retain the deposit. This provides an incentive for the builder to ensure that final inspection is completed. As a result of this practice, Kitchener staff indicated that the number of files without final inspection within the timeframe has significantly declined. Ottawa also experienced this problem but also identified an issue with builders not managing their projects effectively. This has a direct impact on the cost of service to the overall industry. The City of Ottawa instituted a refundable inspection fee of $1000 (in addition to the building permit fee) for a single residential home and $4000 for townhouse developments. The fee is drawn down every time a deficiency is identified requiring re-inspection or when the Inspector was unable to undertake the inspection because the work wasn’t completed or ready for the inspection. Once the final occupancy is completed, the remaining amount is refunded. As a result of implementing this policy, Ottawa indicated that there are very few situations where the refundable fee is drawn down as the overall standards in the industry have improved. The other advantage is that better performers are no longer subsidizing poor performers because there is financial incentive in place. It is recommended that the City of St. Catharines implement a similar refundable deposit program which would encourage the completion of final inspections and provide a mechanism to recover the costs associated with re-inspections. It is recommended to create a refundable inspection fee of $1000 (in addition to the building permit fee) for a single residential home and $4000 for townhouse developments. The fee is drawn down every time a deficiency is identified requiring re-inspection or when the Inspector was unable to undertake the inspection because the work wasn’t completed or ready for the inspection. Once the final occupancy is completed, the remaining amount is refunded. This is a strategy that has been successfully implemented in other municipalities and has lead to improvements in the overall industry standards and a significant reduction in the number of open files that have not had their final inspection.

4. Marijuana Grow Operation Fee for Service The amendments to the Municipal Act, 2001 set out in Bill 128 the requirement for municipalities to make sure that buildings once used as marijuana grow operations are safe in order to protect the public. If municipal officials determine the property is unsafe, they can then order the remedial work needed to make it safe.

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In accordance with Bill 128, once the Clerk’s Department of a Municipality has been informed in writing by a police force that a building located in the municipality contains a marijuana grow operation, an inspection of the building is required within a “reasonable time” following that notification. A protocol was developed for the City of St. Catharines in 2007 to ensure immediate access to the property to obtain evidence so that City Staff can produce the required orders pertaining to the Fire Code as well as the Ontario Building Code and other applicable laws, to remove the unsafe condition and ensure the property is not sold to new ownership, or re-occupied through rental or lease, before remediation is accomplished. This is an area of enforcement of the BCA and OBC and building orders are issued and registered on title at the local registry office. This is the only time a building order is registered against the property at the registry office, however, it is in the interest of public safety to ensure that this information be made available to any possible future purchaser. The registry will indicate that there was a grow operation at the premises and it will also show when the orders were discharged from title (after remediation was completed and accepted to the satisfaction of the municipality). The orders themselves also indicate what measures are required to be completed in order to resolve the orders. The following chart shows the number of Police Notifications of grow operations that have been received by the City of St. Catharines.

Year Notifications Resolved Still Outstanding 2007 4 4 0 2008 6 4 2 2009 12 12 0 2010 24 15 9

There are three files from 2008 and 2009 that remain outstanding as they are currently under the control of the Ontario Government. These three properties have been put under restraint by judicial order in the Ontario Superior Court of Justice. The Seized Property Management Directorate (SPMD), on behalf of the Minister of Public Works and Government Services, may have certain responsibilities and/or exercise certain powers with respect to these properties in accordance with the Seized Property Management Act. The municipality can only monitor these properties until otherwise informed by the SPMD. Some of the notification files in 2010 were received as recently as Dec 30, 2010. With the protocols we have in place and with the cooperation we have been receiving from consultants and contractors in this regard, the average time frame for a notification to be resolved is two to three months. On average, it takes approximately 7-8 hours of staff time for the building inspector and approximately 2 hours for legal services time to resolve each of these notifications. Additionally, there is administrative support staff time that must also be factored into the cost of providing this service. This includes the preparation of orders, posting of orders, phone calls, emails, co-ordination with consultants to identify environmental safety concerns, remediate and test to confirm acceptable standards. Once we receive clearance from the Environmental Consultant that there are no health and safety concerns remaining, from their perspective, the building inspector will conduct a final inspection to resolve the orders. Registration and discharge of orders costs $60 each and a title search of the property to issue orders is $70. That amounts to $190 without consideration of both direct and indirect staff time as explained above. Therefore the suggested fee to resolve the file, upon Notification from police, is $1000 per file (up to 10 hours of staff time with an additional $100/hr for every hour over 10). 5. Occupancy Certificates and Permits

Effective January 1, 2012 the Ministry of Municipal Affairs and Housing are implementing a Code change which is expected to clarify criteria for occupancy of houses. It is expected that this new regulation will require a municipal permit prior to

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occupancy of a building. A working group is currently reviewing this proposed change and in consultation with the ministry identifying some shortfalls that must be addressed. Currently in St. Catharines, an inspection report is completed at the final stages of construction identifying any deficiencies and indicating if occupancy can be obtained. Occupancy must be confirmed by all of a Building inspector, Heating and Ventilation inspector, Plumbing inspector and, where applicable, a Fire Prevention inspector. City Staff has found that this process can be confusing to the people on site and in the past it has happened that builders and/or the owner/tenant inadvertently omit one or more of these inspections and interpret a clearance from the building inspector to mean they have all clearances. In order to eliminate this confusion and to prepare for the upcoming Code changes in respect to Occupancy Permits, the Building Division is changing its procedure for occupancy to include an occupancy certificate (or permit) to the permit holder. There will be no cost to this certificate that is issued to the permit holder, however if additional certificates are requested by other than the permit holder a fee of $100 per certificate would apply. An occupancy permit does not certify or warrant the work or workmanship of a builder, only general conformance with the OBC. It confirms that minimum requirements for occupancy have been met, based on the inspection undertaken at the completion of key stages of construction, as required by the OBC and the Building By-law. There are also two types of occupancy permits: Partial Occupancy and Final Occupancy. A Partial Occupancy Permit is issued when the permit holder wishes to allow occupancy to occur in an unfinished building. For a residential occupancy, there are minimum occupancy requirements. For example, for a single detached dwelling residence the minimum requirements are as follows: a. required exits, handrails and guards, fire alarm and detection systems, and fire

separations must be complete, operational and inspected; b. water supply, sewage disposal, lighting and heating systems must be complete

and operational c. building water systems, building drains, building sewers and drainage and

venting systems must be complete, operational, inspected and tested. A Final Occupancy Permit is issued when construction is complete and all outstanding Code deficiencies, as listed in Inspection Reports, have been addressed.

6. Alternative Solutions The objective based format of the OBC does allow for more innovation and flexibility but a process must be followed in order to ensure that the required objectives and functional statements identified in the OBC can be achieved. The Ministry of Municipal Affairs and Housing (MMAH) is working on a standard format for applying these types of alternatives however, in the absence of the standard format, the City has developed its own form which is attached as Appendix 7. This form ensures a proper evaluation of construction equivalents and acceptable alternatives. This evaluation will include, but not be limited to:

a. experimental data

b. BMEC rulings

c. Professional verifications (i.e. P.Eng. reports and evaluations)

There is considerable time that must be applied to the review of these applications and therefore an appropriate fee must be attached to the submission. The suggested fee to review an Alternative Solution submission is $400 per application (up to 4 hours of staff time with an additional $100/hr for every hour over 4). 7. Administrative Costs Associated with Orders The Building Code Act (BCA) provides municipalities with the authority to collect fees to fully recover the cost of administration and "enforcement" of the BCA and the Ontario Building Code (OBC). The results of the study show that not many municipalities have

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fees associated with orders at this time. This has been a topic of discussion however, and could be looked at in more detail in future years. The most common Order that is currently issued is an Order to Comply, requiring the owner to obtain a building permit. Since Item #1 of this section already recommends a fee to address additional administrative costs associated with building without a permit, it is not recommended to pursue this additional fee option at this time. More research could be completed in the future to determine if fees should be applied to other types of Orders that are issued. 8. Site Alteration Deposit (associated with permits for accessory structures

including swimming pools, to address grading and drainage issues) This deposit would be required where a homeowner wants to make changes to their property such as grade of land and landscaping to accommodate an accessory structure. The vast majority of municipalities surveyed do not provide grading inspections within the building inspection function. The role of the Building Division is to strictly accept the grading certificate that must be signed by a Land Surveyor, an Engineer or a Landscape Architect and release the deposit. Another option is to increase the standards and submission requirements associated with grading; requiring an As Built Survey to be submitted. This requires the applicants to submit actual elevations rather than simply confirm that the property meets with the overall intent of the grading requirements. This benefits the homeowners as this provides a greater verification that the grades were set appropriately upon occupancy and possibly reduce the number of complaints and also reduce the liability against the City. It is the alterations that occur after the house has been occupied that often result in drainage issues for the adjacent properties. As part of our awareness program, a new process could be implemented where, upon providing occupancy for a new home, the building inspector could post a notice that indicates that permits are required to construct sheds or to install a swimming pool. The notice could also include the requirement for permits for interior alterations and finishing basements. This notice could also state that when landscaping fencing is installed, it is the homeowner’s responsibility to maintain all boundary swales. It is recommended that the City of St. Catharines implement a “site alteration deposit” of $200 per lot when applying for an accessory structure and implement an awareness notice that is delivered with an occupancy permit to advise on future permit requirements and potential drainage issues if they are to alter the grades. 9. Request for Inspection Outside Normal Working Hours

Inspection usually occurs within the normal working hours or with some overtime required one or two hours before or after the normal working hours. On those occasions where an inspection is required outside the normal working hours and it is not consecutive to regular working hours or a special request , a minimum 4 hour call out shall be applied at ($100 per hour). 10. Fast Track Permits There is merit in exploring opportunities for improved customer services. These changes must be reflected in the building by-law and will have a fee for service component to be reflected in the rates and fees to cover the costs of providing this service in accordance with the legislation. Staff has been requested to create an express service or offer a non-peak time review (after hours) for residents. Both of these strategies have their pros and cons. A non-peak time review reduces the wait times during peak hours as well as offering an alternative and possibly a more convenient time for residents (evenings). This would not mean that residents would not be able to apply during the day, but would offer an alternate time with the goal of reducing wait times during the day for builders and perhaps a more flexible option for residents who also work during the day and have a

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difficult time coming in to City Hall during the day. The types of permits that would be considered after hours would be for decks, pools and pool enclosures (fences), and small renovations. This will require some negotiations with the union personnel to adjust their regular work schedule to accommodate this function and could result in some overtime costs. There was also discussion regarding a fast track system. Legislation is very prescriptive in the mandated timelines for review for the various permit types. Fast tracking is an option, not a requirement, so it would depend on the number of permits that need to be reviewed and the resources available that would determine whether fast tracking would be possible. Staff are currently reviewing internal processes to accelerate permit issuance of accessory structures, such as decks and sheds, and pool enclosure permits. The key to success will be ensuring that the applicant provides complete information at the counter when applying for the permit. Guidelines to assist the general public in understanding the information that must be submitted with a permit application can be found under the new Build in section of the City’s website. Summary of Recommended New Fees Based on the analysis above, it is suggested that the following new fees be established:

a. Re-inspection fee (for 3rd and subsequent “repeat” inspections”)

$100 per inspection

b. Permit Administrative Fee (administrative fee associated with building without a permit)

100% of original permit fee added to the original permit fee, not exceeding $5000

c. Refundable Inspection Fee Deposit $1000 for a single residential home and $4000 for townhouse developments

d. Marijuana Grow Operation Fee to Resolve File $1000 per file (up to 10 hours of staff time with an additional $100/hr for every hour over 10).

e. Alternative Solutions $400 per application (up to 4 hours of staff time with an additional $100/hr for every hour over 4)

f. Site Alteration Deposit $200 per lot when applying for a permit to construct an accessory structure

g. Request for Inspection Outside Normal Working Hours $100/hr with a minimum call out of 4 hours

PART 4 – APPENDICES

1 Correspondence to Building Industry provided by CBO 2010

2 Annual Reports

3 MPMP Letter from Ministry (MMAH)

4 LMCBO Survey

5 Court of Appeal Ruling – 2072581 Ontario Inc. v. Hamilton (City) (2010)

6 OBOA Journal (Sept. 2010 Edition) – Article

7 Alternative Solution Form

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PERMIT TIMETABLE GUIDELINES (Division C Table 1.3.1.3.)

10 DAYS 15 DAYS 20 DAYS 30 DAYS Accessory Structures: Detached garage Swimming Pools Sheds, decks &

carports Wood burning stoves Masonry fireplace Buildings < 108 sq ft

that contain plumbing

Part 9 Buildings: (Small Buildings)

Groups C, D, E, F-2, F-3 Where the building area

is, > 10 m2 (108 sq ft), but not > 600 m2 (6460 sq ft) in building area, & 3 storeys or less in building height

Part 3 Buildings: (Large Buildings) Groups A, B, F-1 & Groups C, D, E, F-2 & F-3 Where building is, >600 m2 (6460 sq ft) in

building area, or > 3 storeys in building

height

Part 3 Buildings: (Complex Buildings)

Containing a mezzanine or interconnected floor space (3.2.8.3 to 3.2.8.11) or is a high rise building (3.2.6.)

Residential: Detached House Semi-detached house Townhouse, Rowhouse

Residential: (unit above another unit) Duplex Multiplex

Minor Alterations: Single partitions,

demising walls, washrooms

Farm Buildings: not > 600 m2 (6460 sq

ft) in building area

Farm Buildings: > 600 m2 (6460 sq ft)

in building area

Miscellaneous Residential:

Additions, interior alterations, attached garage or carport, roofed porches, finished basements

Tents: If > 2420 sq ft, or Occupant load is > 300

persons, or erected for > 14 days.

Fire & Life Safety: Fire alarm, emergency lighting, sprinklers, stand pipe, commercial exhaust hood, spray booth, dust collector, fixed extinguishing systems, electro magnetic locking devices, hold-open devices

Post Disaster Building: (hospital, fire station, police station, radio station, telephone exchange, power station, electrical sub-station, water and sewage pumping station, fuel depot)

Signs: Pole, Ground,

Projecting or Roof Portable

Interior Alteration: Part 9 Small Buildings

Portable Classrooms: New or re-located

Designated Structures: Retaining walls,

Communication towers, Pedestrian bridge appurtenant to a building, Crane runways, Exterior storage tanks, Dish antennae or solar collectors, Outdoor pools, Public pools, Public spas

Miscellaneous: Canopy or Marquee Racking system Balcony guard repair Balcony repairs Parking garage repair

Interior Alteration: Part 3 buildings

Foundation Only: All Buildings

HVAC ONLY: Detached house Semi-detached house townhouse, row house,

multiple (not > four dwelling units)

HVAC ONLY: Part 9 building (small

buildings) Duplex Multiplex > Four Dwelling Units

HVAC ONLY: Part 3 buildings

HVAC ONLY: Part 3 buildings

(Complex building) Post Disaster buildings

PLUMBING ONLY: Water lines, sewer

replacements, septic tank changeover, Site Servicing (Part 9 )

PLUMBING ONLY: Site Servicing – all

buildings other than Part 9

CHANGE OF USE: No Construction

Demolition: (All Buildings)