Some homeowners waiting for impact fee refunds have been told they might not get all their money back.
At least one building company — A&S Homes — has sent a letter to its customers, saying it would keep part of the $36 million in fees and accrued interest.
“Our company has incurred significant costs and expenses in relation to dealing with the impact fees, which costs and expenses will be deducted from the monies received from the City of Winnipeg,” the letter says.
The City of Winnipeg was forced to refund the impact fees after it lost a court fight with two development and construction firms (Ladco and Qualico) and two industry associations (Urban Development Institute and Manitoba Home Builders’ Association).
The fees it collected were recently released to the builders who charged their customers those fees, and the builders have to process the refunds.
The letter from A&S Homes to its clients has raised the ire of dozens of its customers.
“Angry, confused, frustrated — there is a lot of words to describe it,” said Keith Mozdzen, who is part of the group Winnipeg Impact Fee Refunds. “We are in the midst of a pandemic. This money would mean a lot to homeowners right now. It could cover a year of mortgage payments.”
The city said it issued 3,569 building permits and collected $36,995,249 in fees and interest in the time it was collecting them.
The average refund is expected to be about $10,366.00.
Mozdzen isn’t a customer of A&S Homes but at least 50 residents in Winnipeg Impact Fee Refunds are, and signed contracts with the company that he said had a no adverse publicity clause.
Mozdzen was asked to speak on their behalf because they were worried speaking out could place them in some kind of jeopardy with the company, he said.
There are a number of concerns among homeowners who expect refunds, said Mozdzen, who has been collecting responses from various builders about how they intend to process the funds.
A&S Homes declined to comment and referred CBC News to the Manitoba Home Builders’ Association (MHBA).
“It really does become a business decision for each individual builder. They are incurring costs to to make the refunds happen,” said Lanny McInnes, president of the MHBA.
Costs could include accounting, administrative and legal fees, he said.
Qualico Homes built nearly a third of all the homes that qualify for the refund and intends to give all the impact fee money back to its customers.
“We chose to be clear and transparent with our customers in terms of what would be charged,” Qualico vice-president David Eggerman said.
Processing the refunds will involve their accountancy department and some clerical staff and cost tens of thousands of dollars, but Qualico will absorb the cost with “no fees and no administrative charges,” he said.
Coun. Janice Lukes (Waverley West), whose ward has seen massive growth from new development, said the city managed the implementation of the impact fees poorly, then left builders to process the refunds.
“The implementation of impact fees was a very poorly conceived plan that has cost everyone — taxpayers, homeowners and home builders. There is a real cost to refunding $36 million. It’s a massive administrative and logistical undertaking,” Lukes said in an email.
A statement from Mayor Brian Bowman’s office defended the city’s track record on impact fees.
“The City of Winnipeg is complying with the orders of the court and expects home builders in receipt of refunds will do the same. The decision from the courts shows that the city has the authority to charge an impact fee and that growth is not paying for growth. This will form the basis for next steps,” Bowman’s office said in a written statement.
All representatives of the industry who spoke to CBC News said any revisit of an impact fee has to be done with rigorous consultation with builders, developers and residents.