Development in the Town of The Blue Mountains (TBM) is booming and processing all of the applications is costing the town more than $1 million a year.
“On average it costs the town $1.13 million annually to process planning and development engineering applications,” says Peter Simcisko, manager with Watson & Associates, a consulting company that was contracted by the TBM to undertake a Development Applications Approval Process Fees Review.
Simcisko was on hand at the special committee of the whole meeting in early February to provide council with an overview of the review.
The goal of the review was to establish a tariff of fees designed to recover the anticipated cost of processing each type of application.
“Currently, planning application fees provide approximately 33 per cent recovery costs. Engineering fees provide approximately 82 per cent cost recovery,” Simcisko explains.
The associates constructed an activity-based costing model to determine the full costs of the various application processes. This model was based on the 2019 town budget, including indirect and capital replacement costs.
Throughout the fee review, the associates took into consideration the conformity with legislation and defensibility, the need to optimize cost recovery with stakeholder interest, including affordability, competitiveness and industry best practices.
Watson & Associates met with town staff, development industry stakeholders and looked at several comparable communities, including Caledon, Innisfil and Niagara-on-the-lake.
“During the process, there are a variety of touchpoints with the public,” says Nathan Westendorp, director of planning and development for TBM. “The initial contact was when we had a draft report. We went out to the development community themselves, and we have what is called the developer’s liaison group, which consists of a lot of the developers that we are tending to deal with a little bit more often.”
He says stakeholders were asked what they thought of the work that had been conducted so far, if it was fair, reasonable and if there was anything that we were missing.
“As an organization, we have been following this since it began,” says Richard Voigt, president of the Georgian Triangle Development Institute. “It is something that is always top of mind for us because of the impact it has on being able to bring things into the market.”
Westendorp says the stakeholder meetings provided valuable feedback in terms of what area developers thought of current workflows and processes.
“There were some efficiencies identified and others wanted us to look into the numbers a little bit deeper, just to make sure they accurately represent the work that needs to be done,” Westendorp says.
“This [application process] is just one aspect of a much greater process and there are a lot of things that need to come together here. It is not just the fees that have an impact, it is the effectiveness and the ability for municipalities to streamline the development review process,” Voigt says. “We have all heard the adage that time is money. Well, that is the case. With all things, manufactured or otherwise, the longer it takes the more costly it is.”
Westendorp says that will be one of the benefits of working through a review process like this one, is to allow for a better understanding of how much time it takes to process these applications.
“I think this will improve the application process because it will allow us to devote sufficient time and resources that we need in towards processing the applications, while still having some staff do the public service side of planning,” Westendorp says.
He explains that the review worked through each of the processes and allocated the time, money and resources required to process those applications and then allocated a dollar value to that.
“Ultimately, when the town council has to make a decision on this, they will have to decide whether they want to fully recover these costs, or what per cent of the cost they would like to recover,” says Westendorp. “With full cost recovery, we can assure that the applications bear the weight of themselves and any other funds that are directed towards us can be devoted to policy projects. So, it will be up to the council to decide, what percentage are they going to recover and what percentage are they going to put onto the taxpayer.”
However, Voigt argues that either way these fees will fall on the taxpayer.
“These charges are input costs for building something, so, along with all the other inputs, like in all other kinds of business, they will get passed on to the end-user,” Voigt says. “We hear a lot of discussion about addressing the housing crisis, but there does seem to be an overall disconnect between understanding all of the inputs in building these developments. Everything from the process, time, material costs, applications fees, all of these things go into impacting the final cost.”
Voigt adds these expenses are often amplified when handed to the end-user as they are required to finance the expense over a period of time.
“Our challenge as an organization is how can we, as community builders, support the needs of the communities that we operate in to provide attainable housing, when we see fees and processing times becoming longer and larger? We need to have a more comprehensive approach to things,” Voigt says.
The Development Applications Approval Process Fees Review is part of TBM 2020 draft budget and can be found on page 245 of the budget document.
A public information centre and meeting will be held on Monday, March 9 in regards to the TBM 2020 draft budget. Following the public meeting, a staff report will be brought to council with the received comments. The TBM 2020 draft budget will be tabled for council’s approval on April 6.
