Corporate Report City Council

Report from: Planning and Building Services, Building and Development

Report Date: July 25, 2019 Meeting Date: August 12, 2019

Report Number: PBS-165-2019 File: 56.49.4

Subject: Building Services Annual Report on Revenues, Expenses and Stabilization Reserve Fund for 2018

Strategic Pillar:

Recommendation That Council receive for information the Building Services Annual Report on Revenues, Expenses and the Stabilization Reserve Fund for 2018; and

That Council approve additional staff complement for 2020 consisting of 2 Building Inspectors and the creation of a permanent summer student position to be funded from permit revenues; and

That the recruitment for the 2 Building Inspectors commence in September and if suitable candidates are recruited that these positions commence prior to 2020 with the funding to be drawn from the Building Stabilization Reserve; and

That Council refer to the Budget Standing Committee a request to approve an additional one-time cost of $7000 for support equipment for these positions, to be funded from the Building Stabilization Reserve Fund; and

Further, that Council refer to the Budget Standing Committee a request to approve $25,000 to be funded from the Building Services Stabilization Reserve Fund, for any capital costs required for electronic permitting and implementation of the portal. FORTHWITH

Summary Section 7(4) of the Building Code Act, 1992, as amended, requires that municipalities prepare an annual report on the total building permit fees collected, the direct and indirect costs of delivering services related to the administration and enforcement of the Building Code Act and the balance in the Building Stabilization Reserve Fund.

The Building Code Act (BCA) provides municipalities with the authority to collect fees to recover the cost of administration and enforcement of the Act and the Ontario Building Code (OBC). Article 1.9.1.1 of Division C outlines the details of what can be included as part of the cost including direct and indirect costs, and provisions for a reserve fund. The Act also states under Section 7(2) that the fees must not exceed the anticipated reasonable costs to administer and enforce the Act. Therefore, any excess revenue must be transferred to the Building Stabilization Reserve Fund. The purpose of the Reserve Fund is to support the building permit program to offset periods of low building and construction activity, make service enhancements, and cover unexpected expenses. The Building Division of Planning and Building Services has attempted to balance the revenues received through permits fees with the anticipated costs of administering and enforcing the Act.

It is necessary to develop a supporting reserve fund policy to assist in mitigating risks associated with economic downturns, achieving compliance, fluctuations in service demand and other potential issues. Prior to 2006, building revenue surpluses could be used corporately. With the legislation that was introduced in 2006 (as identified above), any surpluses now must be transferred to a reserve and used for administering and enforcing functions related to the BCA and OBC regulations only. A stabilization reserve manages the risk associated with the economic downturn and is also available to fund one-time capital requirements to avoid fluctuations in fees. Based on legislation, this reserve fund cannot be used for any other City purpose. It is a segregated fund specifically established for the Building Division cost recovery. This is to ensure that the taxpayer is not left to pay for any deficits that should be borne by the building industry.

The costs associated with the operations of the Building Services Division are considered to be fixed costs that cannot be easily or immediately adjusted to the changes in the levels of construction activity. There is expected to be some level of fluctuation of work load from one year to another; however, the BCA / OBC enforcement staff are highly technical and must attain extensive training to meet qualifications required by legislation.

Although a municipality can rely on property tax revenues to supplement BCA enforcement, most municipalities try to ensure that fees are adequate to recover the costs associated with the administration and enforcement of the BCA as well as reasonable contributions to a reserve fund that can be used to offset lean years, implement service enhancements and to cover unexpected expenses related to the administration and enforcement of the BCA.

The legislation requires that municipalities report on any reserve funds and the amount of that fund that have been established for any purpose relating to the administration and enforcement of the Act and its related regulations. Appendix 1 is a summary of revenues and costs, in accordance with subsection 7(4) of the BCA. Pursuant to Section 1.9.1.1 of Division C Part 1 of the OBC, this summary contains information in respect to fees authorized under clause 7(1)(c) of the BCA which includes both direct and indirect costs of delivering these services.

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Report In reviewing Appendix 1, the Building Services Section has maintained a very high volume year resulting in revenues which exceeded total Direct and Indirect costs which has allowed the transfer of the excess revenues to the Building Reserve. In 2017, the Building Services Section saw its highest revenue intake since the Niagara Health System applied for the permits to construct the new west end hospital in 2010. Permit issuance also achieved their highest levels ever recorded in 2017.

Table 1 illustrates the total 2018 revenue decreased marginally from the 2017 high by 8% ($202,220) from $2,536,941 to $2,334,721. The direct and indirect costs have increased by substantially by 17.4% ($321,191) from 2017 ($1,850,315) to 2018 ($2,171,506). Indirect costs only increased 2% ($6,392) leaving the remainder of the increase in direct staffing costs. A significant portion of the increase in direct costs (over $110,000) was due to overtime due to the volume of work from the 2017 permits and increased permits from the average in 2018 which has translated into additional reviews and inspections from Building staff alone.

Table 1

2015 2016 2017 2018

Indirect Costs $372,885 $400,606 $314,760 $321,152

Direct Costs $1,413,744 $1,432,454 $1,535,555 $1,850,354

Total Building Revenue $1,745,168 $1,950,242 $2,536,941 $2,334,721

$1

,41

3,7

44

$1

,43

2,4

54

$1

,53

5,5

55

$1

,85

0,3

54

$3

72

,88

5

$4

00

,60

6

$3

14

,76

0

$3

21

,15

2 $1,745,168

$1,950,242

$2,536,941 $2,334,721

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Revenue vs Costs of Delivering Services (Direct and Indirect)

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Table 2 indicates the total permits issued marginally decreased by 108 from a record high of 1310 in 2017. The decrease of 8.2% from this record high of 1,310 in 2017 to 1,202 in 2018, was also reflected in a decrease of the estimated value of construction by 9.7% from a high of $195 million in 2017 to $176 million in 2018. Construction values are shown in Table 3. The number of new dwelling units also decreased by 29% from 569 in 2017 to 405 in 2018 as illustrated in Table 4.

0

500

1000

1500

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Table 2

Permits Applied For And Issued

# of Permits Applied for

# of Permits Issued

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Table 4 - # of New Dwelling Units

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Table 3 Estimated Value of Construction

It should be noted that there was a substantial amount of construction activity which was being reviewed in late 2018 but not issued. These projects are coming on-stream during 2019. The current construction trend forecast for 2019 and 2020 will see normal permit issuance numbers of 1100 to 1200, with an increase in construction value possibly exceeding $260 million and number of new dwelling units possibly exceeding a record high of 2017. The complexity of projects due to infill and multi-storey construction projects continues to add to the workload with no noticeable decrease in activity.

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Although expenses have remained relatively constant, the Building Services team has continued to endure significant staffing challenges with expenses not solely based on salaries. Even though approvals have been achieved to increase salaries, management has still experienced difficulty filling the last remaining vacancy (competing with salaries of neighbouring municipalities such as Hamilton, Burlington and Oakville). Additional to the staffing salaries, the following expenses were also incurred:

Over $117,000 in overtime pay and contracted permit review (equivalent of over one full time employee (FTE) basic salary and benefits)

$31,000 for MobiInspect software (this is a five-year contractual commitment)

$7,092 in training costs to develop new “junior” staff ($4,800 was budgeted) 100% of fire prevention time (1 FTE) for permit review and inspection charged to

the FEMS budget (fire prevention staff are paid at a much higher rate (including benefits) than building inspectors – $153,896 versus $105,519

Every year staffing costs increase with pay increases that have been negotiated for union staff. Council has recently approved a new contract with the union which will affect the direct costs of the Building Division as the majority of the cost to run the Building Division is salary based. The mobile inspection application has been initialized and staff are becoming more familiar with its implementation.

The City of St. Catharines has experienced a successful year in construction while the Building Services team that supports this construction has been struggling with staffing shortages because of recruitment, retention and qualification challenges.

Performance Measurements

Timelines: Permit Applications Legislation requires that permit applications be reviewed within specific time periods and either the permit be issued or reasons be provided explaining why the permit cannot be issued. Table 5 summarizes the percentage of applications received that were deemed to be complete applications and the time it took for staff to review these applications for issuance (the number is the “median”). A Registered Code Agency was also employed to aid staff in review of permits. In 2019, the addition of 2 new Building Inspectors would have less reliance on a Registered Code Agency or overtime.

Table 5 Municipal Performance Measurement Program

Year

% Complete Applications

Required Median days: houses (10)

Required Median days: Small Bldgs

(15)

Required Median days: Large Bldgs

(20)

Required Median days:

Complex Bldgs (30)

2016 51% 9 12 14 18

2017 56% 10 15 20 n/a

2018 62% 12 18 24 34

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Inspections and Building Code Complaints Legislation also requires that, upon a request for inspection, staff attend to perform the inspection within 48 hours of the request. Building inspections are performed to ensure that minimum Building Code requirements are met. In addition to inspecting construction and demolition projects, staff also provide liquor licensing inspections as well as investigating building complaints such as illegal apartments; building without permits; grow operations; and buildings damaged by fire. During 2018 staff had difficulty meeting these requirements which caused frustration with both staff and the building industry thus resulting in complaints. As a result of the pressure for staff to achieve the legislative review and inspection requirements, staff have not been able to address outstanding Building Code Complaints in an expeditious manner with the exceptions of structural damage to buildings and structural fires. Table 6 illustrates the amount of Building Code complaints received and not yet investigated, investigated and orders issue and those resolved.

Table 6 Building Code Complaints

Year

Complaints Received

Total

Complaint Received

(not investigated)

% of Total

Order/Notice Issued (still outstanding)

% of Total Complaints

Resolved or

Closed % of Total Complaints

2015 174 14 8% 6 3% 154 89%

2016 178 31 17% 28 16% 119 69%

2017 244 105 43% 31 13% 108 44%

2018 188 101 54% 41 22% 46 24%

2019 End Q2 87 57 66% 17 19% 13 15%

Building Code complaints are a significant liability that could present serious unsafe conditions. Completing this work provides another reason why additional staff are required to inspect and resolve these matters in order to limit the Corporation’s exposure. With the increase in building activity, there has also been an increase in building code infractions.

The number of building inspections carried out increased substantially in 2018. This was due in large part to the implementation of standardized inspections of the required inspections, namely: footings, foundations, framing, new-air barriers, insulation, new-occupancy, and final inspections coupled with a transparent recording of deficiencies and processes within the AMANDA System.

Although the provincial government legislates that building inspections be carried out within two business days, at one point during 2017 building inspections were carried out as far as five (5) business days, however after drastic adjustments, essentially all building inspections were carried out within two business days throughout the year 2018. Table 7 illustrates the growing trend to additional inspections in all types of inspections. This is partly due to the consistent amount of permits issued in the past three years, additional inspections required by legislated regulations and the decline in quality of certain construction trades which results in additional follow-up inspections.

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Table 7 Inspections Schedule by Discipline

10441

0

2000

4000

6000

8000

10000

12000

7473 8579

3986 4773

6485

2055 2215 2269 1432 1591 1687

2016 2017 2018

Total Inspections # Building Inspections

# Plumbing Inspections # HVAC Inspections

Proposed Inactive Permits Program An Inactive Permits Program needs to be developed and implemented for 2019-20 which reduce the number of open high risk building permits, such as pools, woodstoves and accessory apartments, and aim to close an additional 150 more building permits than were issued. A concerted effort and additional time will be required by all building inspections and clerical staff for this to occur to achieve this goal in 2019. The results from previous years to date would have to be collated to verify the actual numbers of building permits being issued than closed each year. Similar targets then could be derived for subsequent years for the proposed Inactive Permits Program until all outstanding permits beyond a year old have been closed.

Staffing: Building Services has faced significant staffing challenges since 2016 with some planned and unanticipated retirements and staff turn-over. Over the past few years there has been a growing trend where the demand for Building Officials has exceeded the supply. This situation is referred to by the Ontario Building Official Association (OBOA) as the “Silver Tsunami”. Building Departments across Ontario have entered what will be a very difficult decade, as retirement profiles collide with growing business recruitment needs. Many municipalities are looking for qualified Building Officials and the demand vastly exceeds the supply. At the beginning of July 2017, the inspection role within Building Services, had seven (7) full time staff. Three (3) Building Inspectors, two (2) HVAC Inspectors and two (2) Plumbing Inspectors. By the end of August 2017, one (1) Building Inspector had left the employ of the City, and by the start of November 2017, one (1) Building Inspector had been placed on sick leave. Throughout the following year, January 2018 until December 2018, these functions within Building

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Services had six (6) full time building inspector staff, with one (1) full time position still not filled. Last year Council approved two additional FTEs for the Building Section (BS) in April. The recruitment of the second of the two positions recently concluded in mid-May and confirms this growing trend. In addition, one of the recent staff additions has left to pursue another position in another local municipality, reinforcing the competition for qualified Building Officials. Numerous municipalities have posted positions looking for qualified Building Officials and have had limited success to the point where the positions have been reposted or regraded hoping to attract a Building Official willing to leave another municipality or hiring less qualified individuals which would require additional training.

The nature and scope of what a Building Official needs to do or know are ever-expanding, as building code regulations increase and change and applicable law expands. Technical educational programs at colleges and universities provide a basic technical knowledge of building and construction theory. The training and development of a Building Official is in addition to the basic knowledge learned in a college or university program. It is the municipality’s responsibility to develop qualified and competent Building Officials through training courses, exams and “on the job” practical experience. Building Services has recruited new staff over the past several of years and continues to invest considerable funds to train them. It is necessary to continue this investment to maintain qualified staff and ensure succession planning strategies are in place by developing both new and existing staff. Building Officials are highly trained technical staff and not easily replaced. St. Catharines staff are now primarily comprised of less seasoned / experienced staff who are developing and require training, supervision and guidance.

It is recommended that Council approve additional staff complement for 2020 consisting of 2 Building Inspectors. These positions will be funded initially in 2019 from the reserve and in 2020 entirely through Building Permit fees.

The implementation of this recommendation will: 1. Address large increases in the volume of work due to the amount of building

inspections and outstanding numbers of building code complaints thus reducing the liability risk to the City and risk to public safety;

2. Assist in the commencement of a program to reduce the backlog of dormant permits with outstanding inspections thus reducing the liability risk to the City and risk to public safety;

3. To improve performance measurements in the area of provincially mandated plans review and inspection turnaround times.

4. To allow the Manager of Plans Examination and the Manager of Inspections more time to work on strategic initiatives, bold cultural changes and management related duties rather than undertaking plans reviews and inspections.

5. To reduce the stress placed on the Management team and Building Inspectors due to an excessive workload and associated responsibilities.

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Planning and Building Services received approval from Council in 2018 to hire 2 summer students to aid staff in their work loads. The work that the students performed helped numerous building staff and management prepare necessary documentation including permit intake as well as conducting site visits to determine course of action by staff. This position was also seen as a method of training and encouraging these students to become future building officials. One of the two students has started as a building inspector in Port Colborne. It is recommended that Council approve the creation of a summer building student position to be funded by permit revenues.

To attract desired talent, and retain qualified staff it is imperative that compensation rates for building inspectors and managers be examined so that St. Catharines is and will continue to be on par with the municipalities with whom the City is competing.

Reserve: The Building Code Act makes provision for the difference between revenues and costs to be placed in a reserve, which in the case of St. Catharines, existed but was depleted in previous years. However, 2018 is the third year that funds are able to be transferred to the Building Permit Stabilization Fund. This year a surplus of $163,215 has been transferred to the Fund for a total balance of $1,017,750. Many municipalities have a strategy for establishing, maintaining and managing a Building Permit Stabilization Fund to sustain service levels and service delivery which includes a target of a minimum of 1.5 times the annual operating budget to a maximum of three times the operating budget. In past years, St. Catharines’ strategy has been focused on trying to achieve a cost neutral target to remove the deficit. Fortunately, over the past three years, there has been the opportunity to replenish the stabilization fund for future years.

Any costs not covered by this reserve must be subsidized by the general tax levy. The City’s Financial Management Services had estimated core inflation to be 1.9% for 2019. It has been recommended to continue to increase the fees in 2020 to cover increases in wages and to continue to replenish the stabilization fund for future years. The increase for 2019 was implemented in the current Rates and Fees By-law and Council has recently reviewed and approved changes in the rates for 2020, where the increases were in line with comparable municipalities.

Fees: Establishing optimal permit fees is a dynamic process. Every year the Chief Building Official analyzes the revenues and costs, service levels and staffing requirements to further improve the efficiency and effectiveness of Building Services operations. In comparison to other local municipalities, it must be remembered that St. Catharines is the largest municipality in the Niagara Region. Most Niagara Region municipalities have a population of less than 50,000 and so the operation of the building department is different in terms of volume and sometimes complexity of permit review. For this reason, a comparison of other like municipalities of a similar size has been used in analyzing permit fees, permit and staffing requirements, and therefore revenues and expenses associated with operations.

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The increases in permit fees since 2016 are shown in Table 8.

TABLE 8 Permit Fee Increases ($/square foot)

GROUP 2016 2017 2018 2019 2020

A – Restaurant 1.85 1.90 1.95 2.00 2.05

B – Institutional 2.15 2.20 2.25 2.30 2.40

C – Residential 1.20 1.25 1.30 1.35 1.45

D – Offices 1.65 1.70 1.75 1.80 1.95

E – Retail 1.30 1.35 1.40 1.45 1.60

F – Industrial 1.00 1.05 1.10 1.15 1.15

Construction Activity: Construction activity in St. Catharines has significantly increased in the past couple of years.

A total of 1,262 permit applications were received with 1,202 permits issued in 2018, including the creation of 405 new housing units. For 2018, the estimated value of construction for permits issued was $176,530,577. Appendix 2 is a summary of the estimated value of construction for major building projects in 2018.

Top Ten Projects in 2018 The following is a list of the top ten building permits issued in 2018 according to Construction Value.

ADDRESS PROJECT DESCRIPTION ESTIMATED CONSTRUCTION

VALUE

11 Church Street Construct Superstructure only for an 8 Storey Apartment Building

$21,000,000

300 Fourth Avenue Construct Superstructure for 6-Storey Mixed Use Building

$11,500,000

6 Dalhousie Avenue Construct New 6-Storey 13-Unit Residential Development

$10,000,000

221 Glendale Avenue Construct Additions and Alter Interior at Walmart

$10,000,000

89 Meadowvale Drive Alter Interior for Hampton Inn $8,651,000

59 Church Street Alter Interior Robert S. K. Welch Courthouse

$8,000,000

Report Page 10 of 17

1812 Sir Isaac Brock Way Remove 4 Old Generators, Install 2 New Generators and Replace 1 Chiller at

Cogeneration Facility

$2,500,000

400 Scott Street Alter Interior of Existing Royal Bank of Canada

$2,500,000

8 Ontario Street Rebuild Stair #1 and #2 and Renovate Elevator Areas

$2,000,000

221 Glendale Avenue Alter Interior of former Sears Tenant Space to Prepare for Future Tenant

$2,000,000

There were four top projects in 2018 all with an estimated value of construction (EVC) over $10 million.

There were an additional 7 projects with estimated values of construction between $2 -$8.6 million, 17 projects were between $1 - 2 million, 12 projects were between $500,000 - $1 million, and 33 projects were between $250,000 - $500,000. These projects amount to $122,935,250 in construction value.

The remaining projects (approximately 1129 in number or 94% of total permits issued) had a total sum in construction value of $53,595,327. Each of these projects had a construction value of less than $250,000. These smaller projects are typically completed by smaller constructors who need more guidance and staff time to educate and ensure the work is completed in accordance with the minimum requirements of the Building Code.

Appendix 3 contains tables and charts showing comparative construction activity data over a period of three to ten years. It is important to examine these metrics in context. Large projects take more than one year to complete, and building staff are involved with the project from application to inspection to occupancy of the building. The economy has an effect on the type of construction that occurs. While it can be seen that the number of permits issued has decreased slightly by 8% from 2017 to 2018, it should be noted that this is still 4% higher than any of the previous 5 years prior to 2017. The majority of construction activity is residential with medium density residential construction, a decrease in the number of new dwelling units of 29% from 569 in 2017 to 405 units in 2018, yet this number is still 6% higher than any of the previous 5 years prior to 2017. Revenues have decreased by 8% compared to 2017, however, a continuing high demand of building staff time for review and inspections still exists due to the 2018 volume.

Staff received and reviewed and issued 1,129 permits of smaller values ranging from $120 to $250,000 in estimated value of construction in 2018. Each one of these applications require individual review and inspection throughout the City.

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Building staff are also responding to building code complaints for unsafe conditions including fires, construction without permits, deteriorating buildings and structures, and vehicle collisions through buildings.

2019 Forecast To date 2019 has proved to be a very active year for building permits and it is anticipated that the remainder of 2019 will continue this trend. As with previous years, there appears to be predominantly residential construction with some commercial construction. It is estimated that the total construction value for permits to be issued in 2019 will be exceed $260 million in major projects. Since larger projects tend to run over multiple years, a three-year average for construction value is helpful in determining trends (Appendix 4).

The following is a list of large anticipated construction projects (over $1 million in construction value) that will receive permits in 2019.

Address Project Description Dwelling

Units Project Cost

32 Towering Heights Boulevard*** Apartment 178 $49,567,047

155 Ontario Street* Retirement Apartment 143 $30,531,927

57 Lakeport Road*** Condominium apartment 51 $26,500,000

1812 Sir Isaac Brock Way* Apartment -retrofit $25,000,000

45 Dorchester Boulevard*** Condominium Townhouses 49 $24,155,300

61A Village Road Condominium apartment 44 $19,000,373

198 Welland Avenue** Police Detachment -NRPS $15,325,000

77 Yates Street** Condominium apartment 37 $15,000,000

363 / 365 Lake Street** Car dealerships - Additions $8,160,000

525 Niagara Street* Townhouses and Semi-detached 40 $8,030,967

141 Louth Street* Apartment 30 $7,000,000

118 Glenridge Avenue** Sanctuary Addition $6,277,450

295 Fourth Avenue** Commercial $5,500,000

176 Oakdale Avenue* Apartment 24 $5,000,000

1 Marsdale Drive** Addition to Existing School $4,319,569

1 Dexter Street Apartment 14 $3,745,361

464 Welland Avenue** Addition to Commercial $2,750,000

99 South Drive*** Townhouses 10 $2,416,478

125 Rykert Street* Townhouses 10 $1,750,236

121 Fourth Avenue* Commercial/Retail $1,302,473

Total Estimated Value of Construction 2019

$261,332,181

Total # of units 2019 630

*Permit application received **Permits issued ***Permits partially issued

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Additional forecasting for 2020 and beyond, based on planning applications received to date, can be found in Appendix 5. It should be noted that there are a significant number of multi-storey residential developments being proposed in the near future which will place additional demands on staff as the number of permits may decline but the complexity, size and number of new dwelling units being developed will increase.

Building and Fire Services: Building and Fire Services staff have been reviewing the areas of responsibility in an attempt to streamline processes and improve efficiency between the two departments. The Building By-law states that the Chief Building Official (CBO) may delegate to the Fire Chief or his/her designate, responsibility for the review of plans and specifications, and field inspections of the systems detailed in Schedule B of the By-law. The systems identified in Schedule B to the Building By-law are being reviewed so that a transition plan can be implemented for Building Services to take on these areas of responsibility from Fire Services. Some areas will be able to be transitioned sooner than others depending upon training and experience required in reviewing and inspecting these systems.

Building Services staff (Building, Plumbing and HVAC Inspectors) will have to take on additional responsibilities to complete the inspections normally tasked to Fire Prevention Services. For Building Services, this work will require significant additional training, add to the workload, and increase time constraints and responsibility. Additional FTE in the Building Services Division will be necessary to accommodate this transfer of responsibilities.

Key Initiatives:

Information Sharing Between City of St. Catharines Building Services Staff and Building Industry

City staff as well as the Chief Building Officials of Niagara (CBON) undertook consultation and presentations to the building industry over the past year regarding a number of building products, as well as developing an Information Bulletin on How to Manage the Building Permit Process.

Builder’s Residential Inspection Guide City staff have developed an inspection guide for builders to advise them on specific items to address at each stage of construction. It is anticipated to be launched in the Fall.

Niagara Home Builders Association (NHBA) Membership As a means of improved communication and relations the City has joined the NHBA,

conducted a presentation on masonry veneer installation, and continues to provide an avenue for information sharing, awareness, understanding and respect between the building industry and building department.

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Minor Modification Policy Developed as a pilot project, as a means to improve the timely processing of changes on residential construction sites, City staff have created a Minor Modification Policy and its associated forms. The intent is to expedite the time in which the building industry can propose minor changes to construction with the goal of approving these changes immediately on site.

Meeting with individual builders both on site and in office City staff continue to meet with individual builder both on site and at City Hall to discuss issues as they arise and attempt to expedite an understanding of the issues and come to a resolution to move projects forward.

Technology Advancements Building Services utilizes many information technologies to provide service to citizens. AMANDA provides the database technology to allow for data collection and reporting. This system works in conjunction with other technologies to streamline and enhance service levels and provide enhanced customer service delivery.

In 2018, the Building Services Division worked with Corporate Support Services – Information Systems staff to enable a mobile inspection application (MobiInspect). MobiInspect is a software solution that allows building inspectors to use their smartphone to capture notes and photos on site and send them to the AMANDA system directly. This also allows inspection reports to be sent to the site superintendents more expeditiously and improve communication in the field.

Planning and Building Services in conjunction with Corporate Support Services – Information Systems staff continue to move toward streamlining the permit approval process by offering an online permit and inspection portal which would allow all types of building permit applications and inspection requests to be submitted online at any time, day or night. This service would also allow our customers the ability to review the status of their permits when it is convenient for them. The work plan for 2018 included the implementation of electronic permitting in Q4 of 2018 through the initialization of the Blue Beam software and upgrading the existing public portal (CANAL). Efficiencies in staff time as a result of the elimination of redundant processes and the ability to perform concurrent plans examination will be result in quicker processing for applicants and reducing paper and physical storage of plans. The initialization and upgrades did not occur as there are now significant upgrades of AMANDA being proposed which will allow for an easier integration of Blue Beam. In addition, an upgrading of the public portal to become more user friendly will be undertaken. An additional component for online payment is also proposed to be implemented. Corporate Support Services – Information Systems staff are preparing a project plan for implementation of all of these upgrades and services to avoid re-programming twice. Our goal in conjunction with Information Systems staff for this implementation is 2020. A re-launch of the portal will be offered to provide instruction and assistance. The intent will be to move towards all permits being submitted electronically for review and issuance.

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It is recommended that Council approve $25,000 to be funded from the Building Services Stabilization Reserve Fund, for any capital costs required for electronic permitting and implementation of the portal. The Building Services Stabilization Reserve Fund has an adequate balance to fund these capital expenses required to implement the project plan.

Other Services Provided: The Building Services Division takes great pride in offering pre-consultation service to the public and development community to assist in ensuring that clients have the information they need to apply for and obtain a permit as quickly as possible. The public can obtain information readily at the counter or by appointment. At these meetings the engineers and architects who prepare the plans are provided a cursory review and discussion of concerns up front.

Staff have engaged in multiple preliminary meetings with the project agents, architects and engineers to assist in the smooth delivery of necessary approvals and permits. It provides a better communication of the approach and requirements of the OBC and other applicable laws that need to be satisfied for issuing a permit. There are many other instances that staff will have preliminary and ongoing consultation with the owner and their agents.

Many permits issued consist of small residential permits such as renovations and alterations, or accessory structures, decks, and pools. The applicant for these types of permits is often the home owner rather than a professional builder. Since their knowledge of the OBC can be limited, these applicants can require much more guidance. Building Services staff are a professional group who are dedicated to ensuring the best level of service possible.

Building Services staff also attend pre-consultation meetings for planning applications so that consistent and timely information can be provided to applicants as early in the development process as possible. The building permit is the last stage in the process. The information provided early in the planning stage can assist in identifying concurrent activities that can be conducted to streamline overall approvals. This also ensures that the plans submitted for a building permit do not result in any costly surprises that would not have been contemplated in a planning review. Applicable law requirements such as a Record of Site Condition through the Ministry of Environment, Conservation and Parks (MOECP) or a Code requirement such as limiting distances restricting the amount of windows and other openings from a property line can be identified and the developer and / or builder has the opportunity to address these issues in advance of their application for a building permit. These are issues and activities that a good project manager would identify and address on behalf of the developer / builder. In the absence of a project manager, staff have been providing more of these types of services.

None of these enhanced levels of service generate revenue, although they can be very time consuming for staff. These types of services have been scaled back in 2017 and 2018 due to the lack of staffing resources.

Report Page 15 of 17

Financial Implications As mentioned in the onset of this report the Building Code Act provides the municipality with the authority to collect fees to recover the cost of administration and enforcement of the Act and the Ontario Building Code. As such the addition of two FTEs and a summer student building position need not have any implications to the tax base since the Building Revenue, together with building permit fees and permit volume is expected to cover the anticipated costs for 2019, 2020 and future years provided building activity continues on its current pace. Should the recruitment for the 2 FTEs commence in September and if suitable candidates are recruited, the commencement of these positions prior to 2020 should be funded from the Building Stabilization Reserve Fund. Additional one-time costs of $7000 for support equipment for these positions shall also be funded by the Building Stabilization Reserve Fund.

It is also recommended that Council approve $25,000 to be funded from the Building Services Stabilization Reserve Fund, for any capital costs required for electronic permitting and implementation of the portal.

Relationship to Strategic Plan

Economic Sustainability Pillar Goal Attract public and private investment, support local businesses and provide excellent customer service to demonstrate we are open for business.

The Corporation is demonstrating a continued commitment to the building industry, businesses, landowners and the citizens of the City of St. Catharines, to provide excellent customer service and to ensure public safety as construction projects are proposed, constructed and occupied. Through the continued relationships with the development and construction industry, key initiatives currently being undertaken and those proposed in the implementation of the recommendations contained in this report will demonstrate this commitment to achieving common goals.

Conclusion It is recommended that Council approve the addition of two Building Inspectors and a summer student building position to assist in providing higher levels of service to the building industry. These positions will be supported by building permit revenues in 2020 and beyond.

It is also recommended that Council allow the recruitment of candidates commencing in September and if suitable candidates are recruited prior to 2020, that the commencement of these positions in 2019 should be funded from the Building Stabilization Reserve Fund.

It is also recommended that an additional one-time cost of $7000 for support equipment for these positions shall also be funded from the Building Stabilization Reserve Fund.

Report Page 16 of 17

It is also recommended that Council approve $25,000 to be funded from the Building Services Stabilization Reserve Fund, for any capital costs required for electronic permitting and implementation of the portal.

Prepared and Submitted by:

Brian Thiessen MAATO, CBCO Acting Chief Building Official / Manager of Building and Development

Approved by:

Tami Kitay, MPA, MCIP, RPP Director of Planning and Building Services

Appendices: Appendix 1 - Annual Report of Fees and Costs Appendix 2 – Construction Value for 2018 Permits over $250,000 Appendix 3 - Permits Applied for and Issued, Estimated Construction Value Appendix 4 - Estimated Value of Construction for the years 2011-2018 Appendix 5 - Anticipated projects for 2020 and later

Report Page 17 of 17

1Estimated Costs of Delivering Services (Direct and Indirect)

2018 2017

Opening Balance of Reserve Fund $845,400 $158,257

Direct Administration and Enforcement Costs

Staffing Costs (Direct Support Staff) $1,718,641 $1,404,924

Direct Office Expeditures $131,713 $130,631

Total Direct Administration and Enforcement Costs $1,850,354 $1,535,555

Indirect Administration and Enforcement Costs

Staffing Costs (Indirect Support Staff) $77,913 $69,048

Indirect Office Support Costs $243,239 $245,712

Total Indirect Administration and Enforcement Costs $321,152 $314,760

Total Direct and Indirect Costs $2,171,506 $1,850,315

Total Building Revenue $2,334,721 $2,536,941

Revenue/(Deficit) for current year of $163,215 $686,626

Interest Earned $9,136 $517

Balance to be transferred to/(from Reserve Fund) $163,215 $686,626

Balance of Reserve Fund $1,017,750 $845,400

G:\PBS-Staff Reports\2019\2018 Building Services Annual Report\2018 Annual Report on Fees Costs and Reserve Fund.xlsx

Plant

Construction Value for 2018 Permits Over $250,000 211 Church Street Construct Superstructure only for an 8 Storey Apartment

Building

$21,000,000

300 Fourth Avenue Construct Superstructure for 6-Storey Mixed Use Building $11,500,000

6 Dalhousie Avenue Construct New 6-Storey 13-Unit Residential Development $10,000,000

221 Glendale Avenue Construct Additions and Alter Interior at Walmart $10,000,000

89 Meadowvale Drive Alter Interior fort Hampton Inn $8,651,000

59 Church Street Alter Interior for Holding Cell Expansion and General

Alterations on All Levels at Rover S. K. Welch Courthouse

$8,000,000

1812 Sir Isaac Brock

Way

Remove 4 Old Generators, Install 2 New Generators and

Replace 1 Chiller at Cogeneration Facility

$2,500,000

400 Scott Street Alter Interior of Existing Royal Bank of Canada $2,500,000

8 Ontario Street Rebuild Stair #1 and #2 and Renovate Elevator Areas $2,000,000

221 Glendale Avenue Alter Interior of former Sears Tenant Space to Prepare for

Future Tenant

$2,000,000

570 Glendale Avenue Alter Interior and Exterior of Existing Building to Convent

Warehouse to CoGen Facility - General Motors Engine

$2,000,000

111 Church Street Construct a Foundation Only for 127 Unit Eight Storey

Apartment Building

$1,950,000

185 Carlton Street Replace Heat Pumps, Air Handler, Boiler and Update

Existing Kitchen at DSBN Education Centre

$1,800,000

177 Russell Avenue Construct 7-Unit Townhouse 'A' $1,530,000

101 Lakeshore Road Renovate Existing Metro Grocery Store $1,500,000

405 Merritt Street Alter Interior of Existing Church and Convert 10 15-Unit

Residential Building

$1,500,000

262 Welland Avenue Alter Part of Ground Floor for Canadian Mental Health

Association and Niagara Health Services

$1,500,000

177 Russell Avenue Construct 6-Unit Townhouse $1,310,000

118 Glenridge Avenue Construct Superstructure Only Gymnasium Addition to St.

George & St. Mercurius Coptic Orthodox Church

$1,231,000

66 Marsdale Drive Construct a 3-Unit Townhouse $1,200,000

35 Francesco Crescent Construct a 3-Unit Townhouse $1,200,000

295 Fourth Avenue Alter Interior for Mr. Mike’s Steakhouse $1,200,000

15 Evergreen Common Construct a 4 Unit Townhouse Block $1,150,000

221 Glenridge Avenue Balcony concrete repairs, coatings and railing replacement $1,140,000

83 Manhattan Court Construct a 6-Unit Townhouse $1,000,000

431 Queenston Street Construct new Administration Building at Victoria Lawn

Cemetery

$1,000,000

14 Francesco Court Build a 4-unit townhouse $1,000,000

105 Vansickle Road Construct Foundation Only $1,000,000

1469 Pelham Road Construct a Warehouse and Bottling Facility for Henry of

Pelham

$980,000

12 Ashford Place Construct new Townhome $800,000

95 Facer Street Alter Interior and Construct Elevator Addition for Prince of

Wales Public School

$800,000

G:\PBS-Staff Reports\2019\2018 Building Services Annual Report\2018 Permits over 250,000.xlsx

Community Centre

Way

Construction Value for 2018 Permits Over $250,000

28 Prince Street Alter Interior and Construct Elevator Addition for Connaught

Public School

$800,000

295 Fourth Avenue Alter Interior of Unit 2 $750,000

177 Russell Avenue Construct 3-Unit Townhouse $660,000

18 Olde School Court Construct 4-Unit Townhouse $640,000

301 St. Paul Street Replace Existing Generator and Fuel Tanks at Garden City

Tower

$600,000

295 Fourth Avenue Construct Shell Only Building for Mr. Mike’s $545,000

300 Fourth Avenue Alter Interior of Units 1 to 3 $500,000

10 Head Street Construct New Semi $500,000

1 Dunn Street Construct a 3-Unit Townhouse $500,000

18 Olde School Court Construct a 3-Unit Townhouse $480,000

18 Olde School Court Construct a 3-Unit Townhouse $480,000

18 Olde School Court Construct a 3-Unit Townhouse $480,000

18 Olde School Court Construct a Semi-Detached $480,000

18 Olde School Court Construct a 3-Unit Townhouse $480,000

18 Olde School Court Construct a 3-Unit Townhouse $480,000

66 Leeper Street Construct a 3-Unit Townhouse $468,000

300 Fourth Avenue Fit Out Units 8, 9 and 10 for Farm Credit Canada $435,000

261 Martindale Road Alter Interior of Unit 20 for Domino’s Pizza $400,000

351 Geneva Street Repair 88 Balconies on Building – Skyline Living $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 10 $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 12 $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 13 $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 11 $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 14 $400,000

585 Welland Avenue Construct a 4 Unit Townhouse Row 15 $400,000

55 King Street Alter Interior of Seventh Floor for WSP Group $395,910

15 Towering Heights

Boulevard

New Outdoor Gas Generator/Upgrade Power Distribution

and Fire Alarm

$380,000

227 Church Street Interior Demolition/Shell to Remain $362,000

1815 Sir Isaac Brock

Way

Changing Doors and Hardware at Student Residences,

Vallee, Earp, Decew and Lowenberger

$352,000

108 Russell Avenue Convert Storage Room into Universal Washroom and

Repair West Foundation Wall at Russell Avenue

$350,000

194 Church Street Alter Existing Retail and Three Existing Dwelling Units,

Create Five Additional Dwelling Units

$350,000

1812 Sir Isaac Brock Replace Plumbing Risers in Lowenberger Residence $350,000

399 Vansickle Road Alter Interior for Rock Climbing Suite and Construct

Superstructure Only for 5 New Self Storage Units

$350,000

154 Scott Street Construct Addition to Performance BMW $325,000

443 Welland Avenue Alter Interior and Exterior $312,000

25 Corporate Park Drive Demolish Existing Interior Partition Walls to Accommodate

New Interior Partition Layout

$300,000

G:\PBS-Staff Reports\2019\2018 Building Services Annual Report\2018 Permits over 250,000.xlsx

Construction Value for 2018 Permits Over $250,000

1 Tabor Drive Install/Renovate Sprinkler System and Alter Interior of 5

Tabor Drive

$300,000

40 Queen Street Alter Front Façade $300,000

386 St. Paul Street Alter Interior of Main Floor for new ‘Dispatch’ Restaurant $300,000

1200 Fourth Avenue Construct a Ground Floor Shade Structure and 4 Third

Floor Shade Structures at St. Catharines Site

$275,000

78 Yates Street Install Sprinklers at Carmelite Sisters Seniors Home $263,340

211 Martindale Road Alter Interior of Units 9 and 10 for Martindale Pharmacy $250,000

$122,935,250

G:\PBS-Staff Reports\2019\2018 Building Services Annual Report\2018 Permits over 250,000.xlsx

Permits Applied For and Issued, Estimated Construction Value

Year# of Permits

Issued# of PermitsApplied for

Estimated Value ofConstruction (Permits Issued)

# of NewDwellingUnits

2018 1202 1262 $176,530,577 4052017 1310 1379 $195,570,292 5692016 1151 1219 $149, 549, 369 3832015 1149 1238 $114,147,715 2242014 1046 1088 $142,521,041 1862013 1240 1278 $219,761,808 2782012 1166 1192 $95,757,367 2562011 1086 1131 $90,588,582 1382010 1138 1176 $721,953,810 3142009 1137 1180 $143,813,482 1932008 1217 1235 $103,169,349 277

_ _ __

Permits Applied For And Issued

1600 _ _ _ _. _

M ~11

■ # of Permits Issued 8 # of Permits Applied for

3

Permits Applied For and Issued, Estimated Construction Value

Types of Permits Issued in 2018 2017 2016

Secondary Buildings 199 210 167Residential 501 584 508Plumbing Only 253 227 226Commercial (AM, BP and ME) 131 162 162Industrial 22 15 23Institutional 7 3 8Other (AG, CU, DS,HV, TS) 89 109 57Total Permits Issued 1202 1310 1151

Distribution of Construction Value

Type of Permit 2018 2017 2016

Secondary Buildings $3,528,952 $3,541,350 $2,598,694Residential $116,544,373 $127,991,061 $89,429,721Plumbing Only $1,200 $3,900 $6,025Commercial (AM, BP and ME) $36,686,641 $41,141,351 $47,536,189Industrial $9,335,341 $8,396,730 $5,889,640I nstitutional $8,643,340 $10,800,000 $1,775,000Other (AG, CU, DS,HV, TS) $1,790,730 $3,695,900 $2,314,100Total Construction Value $176,530,577 $195,570,292 $149,549,369

4

Estimated Value of Construction for the years 2011-2018

All Construction Residential Industrial, Commercial and

Institutional

Other Permit

Types

Three year

average

2018 $176,530,577 $116,544,373 $54,665,322 $5,320,882 $173,883,413

2017 $195,570,292 $127,991,061 $60,338,081 $7,241,150 $153,086,792

2016 $149,549,369 $89,429,721 $55,200,829 $4,918,819 $135,403,708

2015 $114,140,715 $64,969,417 $43,887,599 $5,283,699 $158,819,522

2014 $142,521,041 $55,568,194 $78,385,372 $8,567,475 $152,691,739

2013 $219,796,809 $66,361,449 $146,042,840 $7,392,520 $135,380,920

2012 $95,757,367 $47,935,329 $40,170,554 $7,651,484

2011 $90,588,583 $32,458,437 $54,360,135 $3,770,011

Planning applications

Anticipated projects for 2020 and later

5

Address Description # Dwelling

Units Project Cost

25 /32 Towering Heights Boulevard Two of Three apartment towers 356 $99,000,000

40 Woodburn/50 Herrick Apartment 208 $43,000,000

57 Carlisle Apartment 208 $37,200,000

61-63 Lakeport Road Condo apartment 145 $36,400,000

10 Benfield Drive Townhouse dwellings and apartment buildings 220 $33,000,000

1024 -1036 Vansickle Road North Condo apartment 70 $27,000,000

102-104 Lakeport Road, 3-5 Avalon Ground floor commercial condo apartment 63 $21,000,000

19 Beard Place Condominium 48 $1,000,000

45 Simpson Townhouses 28 $6,800,000

443 Glendale Avenue Retail, storage, garage, gas station and car wash $6,700,000

333 Main Mixed of Single, Semi detatched and Townhomes 11 $3,500,000

41 Moffatt Street Townhouses 35 $3,350,000

37 Warkdale Drive Townhouses 13 $2,950,000

54 Mackenzie King Townhouses 21 $2,600,000

133 Hannover Warehouse/office $2,200,000

164A Martindale Road Townhouses 11 $1,800,000

427 Geneva Townhomes and Single detatched 7 $1,670,000

192 Rykert Townhouses 8 $1,025,000 Total EVC 2020 and Beyond $330,195,000.00

Total # of units 2020 And Beyond 1452