Item - 2022.PH34.6

The Planning and Housing Committee recommends that:

1. City Council amend the City of Toronto Municipal Code, Chapter 441, Fees and Charges, Appendix C - Schedule 13, effective September 1, 2022, substantially in accordance with the revised fee schedule as found in Attachment 1 to the report (May 13, 2022) from the Deputy City Manager, Infrastructure and Development Services and the Chief of Staff, City Manager's Office, except for references 15 through 23 (Committee of Adjustment fees for Minor Variance and Consent applications) and as amended by Recommendations 2 and 3 below.

2. City Council amend reference 68 (Committee of Adjustment fee for consent to sever multiple lot additions for the creation of one or more new lots (per existing lot)  in Attachment 1 to the report (May 13, 2022) from the Deputy City Manager, Infrastructure and Development Services and the Chief of Staff, City Manager's Office by deleting the fee of $4,927.28 under section V and replacing it with $3,111.51.

3. City Council direct that Committee of Adjustment Fees (references 15 through 23 and reference 68 in Attachment 1 to the report (May 13, 2022) from the Deputy City Manager, Infrastructure and Development Services and the Chief of Staff, City Manager's Office), as amended by Recommendations 1 and 2 above, continue to be adjusted for inflation on January 1 of each year.

4. City Council amend Municipal Code Chapter 442, Administration of Fees and Charges, by deleting §442-9 (B) and replacing it with the following to omit the reference to the legal surcharge of 7.5 percent:

(1) A surcharge will be added to all fees payable under Appendix C, Schedule 13 of Chapter 441, Fees and Charges, to cover the City Clerk's direct costs of providing public notices required to process planning applications.

(2) A surcharge will be levied on all fees payable under Appendix C, Schedule 13 of Chapter 441, Fees and Charges, to cover any direct costs associated with community consultation meetings. These costs include facility rental; and translation and sign language services.

5. City Council amend Municipal Code Chapter 442 Administration of Fees and Charges, by deleting §442-9 (C) and replacing it with the following:

The surcharge described in Subsection B(1) above shall be collected by staff in City Planning and then transferred to the budget of the City Clerk's Office.

6.  City Council authorize the City Solicitor to introduce the necessary Bills to give effect to City Council's decision.

7. City Council authorize the City Solicitor to make such stylistic and technical changes to the amendment to the City of Toronto Municipal Code as may be required.

8. City Council direct the Deputy City Manager, Infrastructure and Development Services in consultation with the Chief of Staff, City Manager's Office and the Chief Planner and Executive Director, City Planning, to undertake a follow-on development application fee review and report back to Council with recommendations by the fourth quarter of 2024.
 

9. City Council direct the Deputy City Manager, Infrastructure and Development to identify appropriate cost recovery for Committee of Adjustment applications through an evaluation of fee categories, processes and staff level of effort, as part of the follow-on Development Application Fee Review (2023-2024) in Recommendation 8 above.

In accordance with the City's User Fee Policy, City staff (with consulting support from Watson & Associates Economists) undertook the Development Application Fee Review 2021 (the 2021 Review).

Municipal Code Chapter 441, Fees and Charges, Appendix C, Schedule 13 sets out the City's fees for processing development applications. Fees are intended to recover the cost of services provided by all divisions engaged in development review. The current development application fee schedule came into effect on January 1, 2017 as a result of the Development Application Fee Review 2016 (the 2016 Review), and is based on application volume data for three years from 2012 to 2014.

Following a methodology adopted by Council in 2006, the City regularly evaluates the assumptions upon which the user fee is based and considers the City's degree of compliance with the User Fee Policy. The methodology relies on an activity-based costing model, structured as a series of application-specific process maps, to determine staff level of effort in the processing of development applications. The 2021 Review follows this methodology and is based on application volume data from January 1, 2017 to December 31, 2020.

The 2021 Review reflects ongoing organizational and transformational change to the development review process since the 2016 Review was adopted by Council. Changes in staff complement, team structure, staff roles and titles, and minor changes to process maps between 2016 and 2021 accurately capture current state service costs. Additionally, adjustments to enable cost recovery for the majority of the Concept 2 Keys Office's operational costs are included, to support the continued roll-out of a new operating model in 2022-2023. Changes in development trends over the 2017-2020 period, including the increasing size and complexity of development applications, are also reflected in this review. A new development application fee schedule (Attachment 1) includes new fee categories, reflects the removal of a number of existing categories and provides updated fees for all categories, in 2022 dollars.

As the City continues to implement its Corporate Strategic Plan and the Toronto Office of Recovery and Rebuild COVID-19: Impacts and Opportunities Report, it is clear that many priorities have a significant impact on or are impacted by the development review process, such as maintaining and creating housing that's affordable and ensuring residents and businesses will realize value from rates and user fees. Specifically, the Corporate Strategic Plan highlights the need for a well-run City, ensuring staff support continuous improvement and embrace new approaches, that the City provide simple, reliable, efficient and equitable services that anticipate changing customer needs and that the City provide shared services across divisions and agencies to reduce costs, create economies of scale, increase service efficiency and effectiveness, and improve customer service.

In addition to ensuring alignment with the City's strategic objectives, an early assessment of the implications of Bill 109, More Homes for Everyone Act, 2022, considered at Planning and Housing Committee in April 2022 (PH33.11), indicates a significant impact on the City's ability to recover costs associated with development review. In light of the above, staff recommend a follow-on fee review exercise in 2023 to build on the current state update described in this report. A follow-on fee review would be based on an updated evaluation of staffing levels and reflect a new operating model to support improved service delivery, culminating in a report back to Council in 2024.