Council increases fees to pull building department out of debt
Clearview council agreed to establish a building permit cost stabilization reserve fund in order to bring the building department out of debt.
Council opted to adjust fees to 115 per cent of actual operating costs and annualize building permit fees with annual construction indexing, as established by the treasurer.
Council made the decision at its Oct. 24 meeting after it saw the building department accumulated a $33,036 deficit in 2015 and an accumulated deficit of $319,063.74 since 2007.
In 2008, Clearview underwent a building permit fee review prepared by Tunnock Consulting, which recommended a building permit fee structure based on 100 per cent cost recovery and a fee structure based on 115 per cent cost recovery, which was designed to generate a cost stabilization reserve fund. Council of the day did not support the recommendation.
Had the 115 per cent cost recovery designed to generate a cost stabilization reserve fund been established in 2008, the building department would not have a deficit of $319,063.74 but rather a positive reserve balance of $19,244.43, reported chief building official Scott McLeod.
“It’s going to take some time. It took us eight years to get here,” said McLeod.
The building department is not supposed to be a self-sustaining user fee based department and has essentially been borrowing from the municipality and the increase is meant to pay back that debt.
Councillor Shawn Davidson said council, of which he was a member, made an error in not adjusting the fees back in the day.
“We made a mistake. It was a kneejerk reaction to the collapse of the economy,” he said.
Councillor Kevin Elwood said council should have been looking at making cuts to the department during lean times. He said Clearview should consider sharing duties with another municipality, adding it is being done elsewhere with success.
“It’s like a slush fund, when you get a surplus of money. It gets absurd,” said Elwood.
The mayor tried to limit the conversation on staffing saying council may have to move in-camera but Elwood maintained he wasn’t talking about specific staff and it is a legitimate topic for a public meeting.
Director of community services Mara Burton said the increase in fees would not deter building activity.
“We are really seeing a ramp up in the department so this is not the time to look at trimming the department,” said Burton.
