Ontario Building Code Administration

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1 The City s Building Services division authorizes all building construction and demolition in Guelph. The division is provincially mandated to administer and enforce the Ontario Building Code (OBC), and provincial legislation requires staff to maintain certification to meet provincial standards, perform mandatory inspections, and issue permits within mandated time frames. Building Services provides the following public services associated with the administration and enforcement of the OBC: Pre-permit consultation, plans examination, technical reviews and application processing Issuing of permits within mandated time frames to ensure conformity to the OBC On-site inspections to ensure conformity with approved permit drawings, specifications, the OBC Act and regulations Response to all technical inquiries throughout building projects Provision of enforcement and initiation of legal proceedings as required These activities are completely funded by revenues generated from building permit fees. Building Services also administers and enforces several City bylaws and manages Guelph s termite control and backflow prevention programs. These activities are included in the Tax-supported Operating Budget. initiatives OUR SERVICES Implement the electronic building permit drawing project with industry partners to allow customers to submit, receive and review drawings electronically. The outcomes of this initiative will inform future corporate efficiency initiatives such as improved online processes for development applications. OUR RESOURCES Conduct research to determine if dust and fumes on construction or demolition projects can be regulated by the Building By-law. Gather and review radon gas test results for new, low-rise residential dwellings including data from Wellington-Dufferin-Guelph Public Health and Health Canada. This will help the City determine the effectiveness of the radon control program. Seek approval from Council to amend the Building By-law to increase public safety by requiring fencing where the construction or demolition presents a significant hazard. This could apply to infill projects in established neighbourhoods or on projects in the busy downtown core. Seek approval from Council to amend the Building By-law to automatically appoint new building officials as inspectors under the authority of the Building Code Act. This will eliminate the need for amending the by-law each time a new building official is hired. Operating and Capital Budget and Forecast 9

2 recommended operating 2015 actuals 2016 approved requested Yr/Yr change ($) Yr/Yr change (%) Licenses & permits ($3,607,816) ($3,070,000) ($3,000,000) $70, % Transfer from reserves $0 $0 ($390,300) ($390,300) % Total revenue ($3,607,816) ($3,070,000) ($3,390,300) ($320,300) 10.4% Expenditures Purchased goods $57,940 $78,100 $73,800 ($4,300) -5.5% Purchased services $46,187 $86,650 $105,000 $18, % Bank charges $27,155 $24,500 $25,000 $ % Staff support $2,076,735 $2,261,650 $2,594,500 $332, % Departmental support $616,368 $618,830 $592,000 ($26,830) -4.3% Transfer to reserves $783,431 $270 $0 ($270) 100.0% Total expenditures $3,607,816 $3,070,000 $3,390,300 $320, % Net $0 $0 $0 $0 0.0% Explanation of key changes Decreased revenue of $70,000 or 2.3 per cent forecast for as 2016 revenue is trending below the 2016 estimate. There were no permit fee increases in 2016 as the reserve fund reached the established cap. Permit fees will increase in if the reserve fund falls below the established cap. Transfer from reserve fund $390,300 to balance the. Expenditures Minimal changes to purchased goods, purchased services and bank charges. Significant increase of $333,000 for staff support dedicated to Building Code work. A detailed review of staff hours spent on Building Code work has resulted in a more accurate allocation of these costs and includes a correction to 2016 costs. This reallocation of funds will result in a corresponding reduction in the tax-supported. There is also an increase in overtime costs to reflect changes in the 973 collective agreement. Changes in departmental support include an increase in internal charges resulting from a correction made to Fleet information to accurately reflect vehicles assigned for Building Code Operating and Capital Budget and Forecast 10

3 work. This was offset by a decrease in internal charges of $50,000 due to the IOR project being completed in The total operating increase is $320,300 or 10.4 per cent. The following chart shows the breakdown of the recommended by expenditures. OBC administration Purchased goods 2% Purchased services 3% Departmental support 17% Bank charges 1% Staff support 77% Note: Compensation is ed in the Non-OBC business unit and then cross-charged to the OBC based on time spent on Building Code work. In, the transfers to reserves is zero per cent internal charges 2016 Yr/Yr Change Compensation chargeback $2,261,650 $2,594,500 $332,850 Departmental support costs (e.g. Legal, HR, Finance, Fleet, etc.) $618,830 $592,000 ($26,830) Total internal charges $2,880,480 $3,186,500 $306,020 Operating and Capital Budget and Forecast 11

4 Operating trend recommended 2018 projected 2019 projected 2020 projected Licenses & permits ($3,000,000) ($3,120,000) ($3,244,800) ($3,374,600) Transfer from reserves ($390,300) ($349,630) ($306,500) ($245,100) Total revenue ($3,390,300) ($3,469,630) ($3,551,300) ($3,619,700) Expenditures Purchased goods $73,800 $74,300 $74,800 $75,300 Purchased services $105,000 $105,530 $106,000 $106,500 Bank charges $25,000 $25,500 $26,000 $26,500 Internal charges $3,186,500 $3,264,300 $3,344,500 $3,411,400 Transfer to reserves $0 $0 $0 $0 Total expenditures $3,390,300 $3,469,630 $3,551,300 $3,619,700 Net $0 $0 $0 $0 The forecasted draw on the reserve fund for the next four years is not sustainable. A strategy will be developed during the preparation of the 2016 annual report on the reserve fund and setting of permit fees on how to mitigate this systemic negative variance. There is currently a Council imposed cap on the amount building permit fees can increase and this may have to be revisited. Year-over-year revenue and expenses ($'000s) 4,000 3,500 3,000 2,500 2,000 1,500 Expenses 1, Actual 2014 Actual 2015 Actual 2016 Projected Forecast Operating and Capital Budget and Forecast 12

5 -2026 recommended capital Project category Project cost ($ 000s) Capital reserves IT Strategic Plan $69.0 ($69.0) Total capital $69.0 ($69.0) Note: The figure represents the 10-year capital costs to be funded from OBC. Notable capital projects The City's Corporate Technology Strategic Plan is managed by Information Technology. This plan focuses on addressing three aspects: renewing critical technology infrastructure, improving access to information for all, and modernizing systems to improve overall functionality. The work involved in this initiative impacts all departments and all systems across the organization. The amount ed for OBC represents OBC's share as a percentage of the overall organization rather than of specific systems or applications. Operating and Capital Budget and Forecast 13

6 Non-Tax Supported Capital Budget 2018 to 2026 Non-Tax Supported Capital Forecast Ontario Building Code Administration Project Number & Description Next 5 year Infrastructure, Development & Enterprise Non-Tax Building Services Total Own IT0029 IT STRATEGIC PLAN - BUILDING SERVICES 26,200 29,700 8,000 1,100 4,000 69,000 69,000 Total Building Services 26,200 29,700 8,000 1,100 4,000 69,000 69,000 Operating and Capital Budget and Forecast 14

7 Reserve and Reserve funds The Building Code Act allows municipalities to set permit fees to cover the cost of administering and enforcing the Building Code Act, and make reasonable contributions to a reserve. The reserve can be used to offset periods of low building and construction activity, make service enhancements, and cover unexpected expenses. To provide an upper limit while maintaining the City s ability to maintain a healthy reserve, Council established a maximum reserve limit equal to one year of operating costs. The following chart describes the purpose of the reserve, the forecasted year-end balances and the upset limits. Reserve or Reserve Fund Purpose forecasted balance Upset limit forecast Building Services Stabilization Reserve Funds are transferred in from any surplus building permit fee revenues generated as a result of volume. Funds are transferred out in accordance with the Purchasing By-law to stabilize revenues in lean years, implement service enhancements and to cover unexpected expenses such as training, legal fees, staffing needs, and associated support costs. $2,662, % of one-year of Operating Costs (not including transfers to reserves) 79% Note: The upset limit is identified in Committee Report Annual Report on 2009 Building Permit Fees, Costs and Building Stabilization Reserve Operating and Capital Budget and Forecast 15