A comment posted below by a blogreader is interesting, informative and correct as to its references to the Community Charter. However the article to which he refers did not basically talk about whether building fees are too high or too low.
The thrust of the article was that there had been a large project that appeared to have received bargain rate building fees because of its undervaluation on the building permit application. This situation was brought to the attention of Council and the City last November 2006 and a report was requested of staff. In early Feb 07 (Posting ) it was reported that 'one of the recommendations staff are considering is a provision to go back and charge an additional fee if the permit value turns out to be too low.' “We don’t currently have an explicit back charge,” he said. “We’re looking at equitable distribution of charges to people using the service.
We are now in November and there appears to be another building permit where the valuation on application appears to be low and still no report from staff about this situation. This was the thrust of the article.
If the fees for one developer are undercharged because of their valuations that are accepted by the City then all other developers including an average person who correctly states the real cost of his new self -erected garage or addition are being shortchanged.
When the fees are justified if and when the bylaw is amended (and it has not being amended each year) then the vast majority of honest developers are indeed subsidizing the few developers that will not submit a fair evaluation of their building costs. This is why an applicable back charging mechanism is needed and should be implemented now.
Some municipalities have gone to market value building permits and applicants are charged based on declared market values and reassessed (or back charged )if these proved incorrect by actual sales etc. Naturally since projected market values are higher than actual building costs then the municipality must adjust their fees downwards if and when this type of building permit system is instituted.
My astute blogreader is absolutely correct in that the fees charged must be justified by the city and not simply be a cash cow. From time to time a building boom may occur that causes the building permit fee reserve to climb but this will only be prudent to maintain to subsidize those inevitable years of inactivity when the service costs will remain with no offsetting revenue coming in.
I urge him to question the fees charge and I hope that he sees the merit of weeding out and back charging those applicants that try to skirt the fees.
An example of a fee that is a cash cow is the 3% franchise fee on your Terasen Gas bill. Over $570,000 this year is collected by Terasen and remitted to the city in November . This was originally implemented in 1957 to cover the damage caused by the gas company to the roads of Vernon etc. If this fee was actually based on the real costs it would be any where close to this amount. But that is another story you can check out at .A HIDDEN TAX in your GAS BILL.
And that pales when compared to the Coquihalla toll fees that are still being charged by the Province long after the costs have been paid ..
Thank you anonymous blog reader for the comment !
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Blogreaders Comment on Posting Price Check:
Councillor Beardsell is right that these are mega dollars we are talking about. The amount a community is allowed to collect for a fee or charge for the provision of a municipal service must be substantiated by report of how the fee is established. (When requested by the public)
As noted in the Community Charter and addressed in the following Ministry Web Site http://www.cserv.gov.bc.ca/lgd/finance/fees_charges.htm....
The amount of a fee or charge is chosen to provide enough money to recover costs and ensure the service will continue in the future… Fees are generally applied on a user-pay basis so that those who benefit from the service, bear the cost of it.
What concerns me about the building permit fee is;
If the cost of construction has increased by 15% -25% on average for the past 2 to 3 years due to construction price increases, can the city argue that the same level of price increases have occurred on their permit issuance and process costs. The costs related to issuing and monitoring building permits may have increased since the past rate review, but I suspect at a rate more reminiscent of the consumer price index, which has hovered around 2.0% over the past several years.
So what councillor Beardsell is saying is true major, tax impact is in play here but it is that the permit fees are too high not too low as he talks about. Developers have been over charged in this case and as a result taxpayers have been subsidized. Unless the City can prove that the cost of delivering this service has increased at the same rate of the cost of construction over the past several years, I suggest that Council Beardsell has it backwards, the developer has been screwed not the taxpayer.
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