A11 ADMINISTRATIVE REPORT Date: April 26, 1995 Dept. File No. H333 TO: Vancouver City Council FROM: General Manager of Engineering Services SUBJECT: Review of Permit Fees RECOMMENDATION A. THAT fees for Anchor Rod permits be charged on the basis of $35 per square metre of excavation face. B. THAT fees for Street Area Permits be established as follows: Permit Fee - Minimum fee, up to 20 m2 . . . . . . . . . $ 35 - Each square metre in excess of 20 m2, up to maximum fee . . . . . . . . . $ 3.20 - Maximum fee . . . . . . . . . . . . . . . . $ 250 C. THAT fees for Temporary Crossing Permits be established as follows: Permit Fee - Single and two family dwelling (no demolition) . . . . . . . . . . . . . . $ 105 - Single and two family dwellings (with demolition) . . . . . . . . . . . . . $ 155 - Commercial & multi-residential without excavation . . . . . . . . . . . . $ 470 - Commercial & multi-residential with excavation, less than three stories . $ 875 - Commercial & multi-residential with excavation, three stories or more . . $1,750 - Roadway Rental Fees per lane per half-day . . . . . . . . . . . . . . . $ 500 D. THAT fees for provision of Building Grades be established as follows: Length of Property Abutting Fee 0 m to 31 m $ 370 over 31 m to 90 m $ 740 over 90 m to 150 m $ 1,100 over 150 m to 300 m $ 1,640 over 300 m $ 2 , 2 3 0 E. THAT fees for Boulevard Crossing Permits be increased to a minimum $250, plus an additional $30 for each foot of length in excess of 36 feet. F. THAT all revenue from Boulevard Crossing Permit fees be directed to a fund for removal of disused or abandoned crossings. G. THAT Council direct the Director of Legal Services to prepare the necessary by-law amendments which will implement these new fee schedules, effective July 1, 1995. COUNCIL POLICY Council on January 17, 1991 resolved: THAT every Department/Board review services for which fees are now charged to ensure that fees are recovering the full cost of the services to the City, or are equivalent to competitive charges where the fee is of a market nature, rather than for cost recovery. PURPOSE The purpose of this report is to recommend revised fee structures for permits which are issued by the Engineering Department for work within the street allowance adjacent to private developments. These permits authorize the use of City property by developers for construction activities. Fee increases are also proposed for building grades which are prepared by the Engineering Department. BACKGROUND Developers wishing to build a structure on private property are required to obtain some or all of the following permits for the portions of their work that relate to City streets. - Anchor Rod Permit: for permission to install anchor rods (for temporary support of excavations) which extend into City property. - Street Area Permit: for permission to install an encroachment (e.g. construct sidewalk) on City property - Building Grade Fee: for the City providing elevations to be met at the property line, as part of building design - Temporary Crossing Permit: for permission to use City street allowance for access for construction purposes - Boulevard Crossing Permit: collected from those establishing new commercial boulevard crossings, to pay for the removal of abandoned crossings.This report reviews the basis of the fees for each of these permits and recommends adjustments where appropriate. INTRODUCTION Any building construction on private property has an impact on City streets. Anchor rods are frequently driven back from the face of excavations onto City property. Hoarding is constructed around excavations, often extending on City land. Lumber, steel, concrete and other building materials are unloaded from trucks parked in the curb lane. The erection of some of the larger building components such as tower cranes, precast cladding and beams also sometimes takes place from the street. Regulating these construction activities so as to protect the interests of the City generates costs which are recovered via various fee mechanisms. The following section describes each of these fees, and recommends adjustments to the fee structure for 1995 as necessary. PERMIT FEES 1. Anchor Rod Permit (a) Description of Permit The building industry has made increasing use of tieback anchor rods as a cost-effective means of shoring excavations. These anchor rods are grouted into the adjacent ground and are tensioned to provide support to the vertical face of an excavation. When the construction of the building is complete, the anchor rods are usually left in the ground as it is expensive and often impractical to remove them. In 1986, Council approved the introduction of a fee which is intended to cover the present value of future costs of working around or removing anchor rods during excavation for future underground utilities. Monies collected from this fee are directed into general revenue. The fee of $20/m2 of excavation face where the rods encroached into street or lane right-of-way was significantly lower than using other methods of shoring or being required to remove the anchor rods. In 1991, the fee was increased to $30/m2. (b) Recommended Fee Structure for 1995 It is recommended that the fee for anchor rods be increased to $35/m2, which is an average increase of 4% per year since 1991. The average area of excavation surface shored each year using anchor rods is 16,100m2. The estimated revenue for 1995 for anchor rod permits is $564,000.2. Street Area Permit (a) Description of Permit The City receives numerous requests from property owners and developers to construct improvements on City property, such as to install a decorative sidewalk or to repair damage caused during construction on adjacent private property. Where this work is constructed by the property owner, a Street Area Permit is required, which includes a fee to cover the cost of City inspection. The present fees were established in 1992. At that time, Council approved a rate structure which subsidized the flat rate applied to small jobs (those under 20 m2), where the construction cost is typically in the range of $120 - $500. The purpose of the subsidy is to reduce the likelihood that such work is done without any permit, and thus without any opportunity for the City to confirm that its construction standards have been met. Substandard work could subsequently become a public safety hazard, or at least a maintenance problem for the City. The cost of this subsidy in 1995 is estimated to be $14,000. (b) Recommended Fee Structure for 1995 An increase in current volumes over the last two years has resulted in revenues in excess of costs. In 1995, we are recommending that an area of inequity in the current fee structure be corrected. We have found that some of the larger jobs for which Street Area Permits are being issued are being charged a fee which far exceeds the actual cost of inspection. In a few cases, Street Area Permit fees are as much as $2,000, while the actual cost of inspection is around $250. For this reason, it is recommended that the maximum fee charged for a Street Area Permit be limited to $250 in 1995. Street area Permit revenues will be reduced by $17,000 annually as a result of this capping. Because of the increased permit volumes being experienced, however, the remainder of the Street Area Permit rate structure need not be adjusted to make up the lost revenue from this change. The proposed fee structure for Street Area Permits is: Existing Proposed Fee Fee Minimum fee, up to 20 m2 $ 35 $ 35 Each square metre in excess of 20 m2, up to maximum fee $ 3.20 $ 3.20 Maximum Fee None $250 3.Building Grade Fee (a) Description of Permit A fee is charged to prospective developers for work done by the Engineering Department in providing officially established building grades. This information is used by developers to design the elevation of building entrances and by the City to accomodate permanent street improvements which are often constructed many years after the building has been built. Since this information also benefits the City, the fee is based on a 50% cost recovery target. (b) Recommended Fee Structure for 1995 Building grade fees were last increased in 1992 and should be increased for inflation over three years and to reflect current volumes of requests for building grades to meet the cost recovery target. The proposed fees are: Length of Property Existing Proposed Abutting Street Fee Fee and/or Lane 0 m to 31 m $ 280 $ 370 31 m to 90 m $ 560 $ 740 90 m to 150 m $ 840 $ 1,100 150 m to 300 m $ 1,240 $ 1,640 over 300 m $ 1,690 $ 2,230 4. Temporary Crossing Permit (a) Description of Permit Construction activity virtually always requires the delivery of construction materials and often the removal of demolition or excavation debris. The movement of these materials between the site and the street is usually facilitated by allowing developers or their contractors the use of a portion of the City street allowance. Lumber, steel, concrete and other building materials are unloaded from trucks parked in the curb lane. The erection of some of the larger building components such as tower cranes, precast cladding and beams sometimes take place from the street. The Temporary Crossing Permit authorizes developers and contractors to use the City street allowance for these construction activities. There are two aspects of the permit: a refundable deposit and a non-refundable fee. The refundable deposit is collected to provide for the repair of any damage done to City property, or if the developer repairs all damage himself, then the deposit is returned to the developer upon completion of the project. The non-refundable fee portion is collected to recover City costs of administering the permit program. This fee recovers the cost of issuing permits, site inspections before, during and after construction, billing and collections. The inspections are required to ensure that the amount of street use is not excessive and that damage to City property is repaired. An additional fee, known as the Roadway Rental Fee, was instituted in 1989. This fee is charged for the rental of portions of arterial roadways for special construction operations such as tower crane erection. The intent of the fee is to encourage contractors to plan their construction operations so as to minimize the need for the use of arterial street space. As a result, disruption to traffic is minimized. (b) Recommended Fee Structure for 1995 The fee structure for Temporary Crossing Permits was last adjusted in 1992. The proposed 1995 fee structure reflects an approximate 23% increase in fees to reflect current permitting volumes and inflation. No change is recommended to the Roadway Rental Fee, since the current fee of $500 is effective in keeping all but essential construction activities off arterial streets. Existing Proposed Fee Fee Single and two family dwellings (no demolition) $ 85 $ 105 Single and two family dwellings (with demolition) $ 125 $ 155 Commercial & multi-residential without excavation $ 380 $ 470 Commercial & multi-residential with excavation, less than three stories $ 710 $ 875 Commercial & multi-residential with excavation, three stories or more $1,425 $1,750(c)Roadway Rental FeesExistingProposed Fee Fee Per lane per half-day $ 500 $ 500 (5) Boulevard Crossing Permit (a) Description of Permit Throughout the City, there are a number of abandoned boulevard crossings which serve commercial driveways that are no longer in use. These disused crossings create problems for parking meter installations, parking enforcement, and streetscape aesthetics. Crossings are abandoned when buildings are altered or demolished, so that some crossings are no longer required. When redevelopment occurs, measures are taken to ensure the removal of these abandoned crossings at the expense of the developer as a requirement of the development permit. Crossings are regulated by the Crossings By-law, which requires the owner of the adjacent property to pay all costs for each new installation and to remove abandoned crossings which serve his property. However, there are many abandoned crossings adjacent to properties which are not likely to be developed in the near future. A minimum crossing permit fee of $200 per new commercial crossing is charged ($190 goes into a fund for removal of disused crossings, and the remaining $10 is in lieu of an annual rental of the boulevard space occupied by the crossing. Any crossing over 36 feet wide is charged an additional $30 for every foot over 36 feet. (b) Recommended Fee Structure for 1995 The current crossing fee of $200 was established in 1987. It is recommended that the minimum fee of $200 be increased to $250, which is an average increase of 3.5% a year since 1987. In the past two years, an average of 56 new crossings per year were installed. The proposed fee would generate a revenue of $14,000 ($250 x 56) per year, to be applied to the fund for removal of the abandoned crossings. As the Encroachment By-law no longer requires an annual rental charge for boulevard crossings, it is also recommended that the full amount be credited to the fund for removal of abandoned crossings.SUMMARY The proposed revised fees outlined in this report are intended to bring revenues in line with current costs and permit volumes. As explained in the report, the Street Area Permit fee includes a subsidy to the smallest permits of approximately $17,000. Based on the projected number of permits issued, these increases represent an increase in annual revenues of $186,000. With implementation part way through the year, the increase in revenues for 1995 is projected to be approximately $100,000. * * * * *