Growth fees have raised close to eight million dollars for the City of Winnipeg since they came into effect last year.
A report to the city’s finance committee shows just shy of $7.6 million was collected from 822 permits between May 1, 2017 (when the bylaw took effect) and March 31, 2018.
But until a legal challenge from the Manitoba Home Builders’ Association and the Urban Development Institute is resolved, that money won’t be touched.
“I’ve been clear that I don’t believe any of it should be spent until this matter is resolved,” Finance Chair Scott Gillingham explained. “I still believe it’s the prudent thing to do, to wait before determining to spend it or allocate it to any project. There’s a working group meeting, discussions are going on about what they would suggest as being eligible projects out of that reserve fund.”
As that money sits stagnant in a reserve fund, the legal challenge continues to inch forward.
The challenge was launched in Jan. 2017, with the Home Builders’ Association and the Urban Development Institute filing affidavits in November.
At its core, the lawsuit challenges the authority of the city to collect the fees.
Now it’s up to the city to respond with its own affidavit, but former Home Builders’ president and current legal spokesperson Mike Moore said that could take some time still.
“To be fair, we took almost a year to prepare and file our affidavits. They’re over 2,500 pages long. That’s really only been five months now for the city so I wouldn’t expect it to be done this early.”
By the time the legal case is closed, there could be tens of millions of dollars in the reserve fund, which Moore said would be refunded if his side wins.
“If the builder paid it, or the developer paid it, but 90 per cent of the time it’s the homeowner that paid the money. Those fees would be refunded back. I’ve seen many contracts where it’s written right in there that if the legal challenge holds up, the money will be refunded.”
The one point that both sides agree on is the decision to hold back on spending the revenue generated by growth fees.
“I must give full credit, I think Councillor Gillingham is doing the responsible thing. Don’t spend money that you don’t know is yours. It would almost be like spending money on credit. Eventually, you have to pay back that credit.”