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RFD- 4065 Bylaws   Item #:   3. a.    
Committee of the Whole Meeting Agenda
Meeting Date: 09/21/2020  
Title:    C-1124-20 - Development Fees and Fines Bylaw - Armstrong
Presenter: Susan Armstrong
Department: Planning & Infrastructure  
Strategic Vision Element: Related Goal:

Request for Decision Summary
Bylaw C-1124-20, the updated Development Fees and Fines Bylaw, is being brought forward for discussion. 
Proposed Motion
That the presentation on the proposed C-1124-20 - Development Fees and Fines Bylaw be received as information.
The Development Fees and Fines Bylaw (C-1046-18) establishes the various fees and fines related to the Planning and Engineering departments’ core services including statutory plan reviews, amendments to the Land Use Bylaw, development permits, Safety Code permits, engineering functions and business licences. 

In an effort to maintain a known fee structure, this Bylaw has not been subject to a comprehensive review since 2015; however, given the impacts of the downturn of the economy on the City’s budget and the implementation of the new CityView software with on-line portal, it is timely to complete a comprehensive review of the City’s development fees.  It is noted that no fines are proposed to be changed as part of this review.

The proposed Development Fees and Fines Bylaw has been developed from the perspective that development should pay for development and is based on the amount of effort required to process an application.  Historically the City has reviewed its fees from the perspective of where the City’s fees fall within a review of the other regional municipalities’ fees and has fallen more or less at the midpoint.  This has resulted in lower fees for developers at the expense of tax payers.  

A review of the City’s comparable regional municipalities, including Edmonton, St. Albert, Fort Saskatchewan, Leduc, Beaumont, Stony Plain and Strathcona County, demonstrates that cost recovery would land Spruce Grove at the high end of the comparables, more or less consistent with Edmonton and St. Albert.  The City of Leduc tends to have the lowest fees reflecting a philosophy of subsidizing development.

It is administration's intent to review the development fees on an annual basis.  As efficiencies become apparent through utilization of the CityView software and process changes, the amount of administrative effort may reduce so future fee reductions will be warranted.
Rather than basing the City’s revised fees on the philosophy that development pays for development, the alternate basis of analysis could be subsidization from general revenue.  The fees would be more developer friendly and support economic development but would result in reductions in revenue inconsistent with the costs associated with the services provided.

The fees for permits that are more likely to be applied for by the homeowners rather than professionals (decks, accessory buildings) have also been evaluated on the basis of effort involved in processing the applications.  For development permits, the application fees and variance notification fees are proposed to remain the same, however, the building permit fee is proposed to increase from $103 to $200.  Since homeowners tend to be less familiar with Code requirements and application processes, administration (including both customer service clerks and building inspectors) often connect with an applicant through phone calls/emails up to half a dozen times each in order to obtain a complete application, provide Code information and advice, and to assist homeowners with questions.  Because of the extraordinary effort expended on homeowner permits, it is proposed to increase the fee to recognize the amount of time expended to deal with these permits.   Notwithstanding, Council may change any of the proposed fees on a case by case basis at third reading of the bylaw.

Apart from an overall fee increase, other proposed changes to the Bylaw include:
  • adding fees for applications where fees are not currently charged, like ICAP permits, to recognize the effort involved;
  • changing the development agreement fee structure by breaking out inspection fees from the development agreement drafting fee, which will result in rewarding those developers that have completed all necessary work prior to inspections by eliminating the need for follow up inspections; and
  • proposing a new structure that is broken out by process and phase to be more user friendly, improve transparency and to more easily understand the cost of doing business.
There is a range of alternative options that could be considered:
  1. Bylaw C-1124-20 be revised to return to the fees and fines outlined in the current Bylaw C-1046-18.
  2. Bylaw C-1124-20 be revised to change any of the proposed fees on an a la carte basis.
  3. Bylaw C-1124-20 be revised to provide for fees that approximately midpoint of fees charged by other regional municipalities.
  4. Bylaw C-1124-20 be revised to provide for an arbitrary percentage increase (10%) across all fees.
Administration met with representatives of the Urban Development Institute (UDI) - Spruce Grove and the Canadian Home Builders Association (CHBA) - Spruce Grove on August 5.  Both UDI and CHBA representatives expressed concerns about the fee increases, especially during the depressed economic times caused by COVID-19.  As partners with the City, they stated the development and building industry help to grow the City's tax base and the change of philosophy is not in alignment with the City being open for business.  In comparison to other regional municipalities, they stated that the proposed fees increases will put Spruce Grove close to the top of the range relative to the region's smaller urban municipalities and this may impact Spruce Grove's competitiveness.
The goal of the implementation of the new fees is to coincide with the go live date of the new CityView software and web based portal.  

The new fee schedule will also be posted on the City's website.
The most significant driver currently affecting the development industry is the overall economic conditions in the province.  An increase in fees would generate additional revenue for the City assuming a consistent level of development activity, however, because of these economic conditions, an increase in fees may deter some developers from moving forward on development proposals.

Given that the level of development is very difficult to project in the current economic and post COVID-19 environment, the overall increase in revenue is challenging to predict.  Notwithstanding, an increase in fees should yield a corresponding increase in overall revenue assuming activity levels stay consistent with current levels.

Old and Proposed Fees comparison

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