The City loves to make 'policy' changes internally. Of course these changes are not publicized in any way and once made, are 'final', and are not negotiated with those who are on the wrong side of the new arrangement (always my wallet is the victim here).
The changes always end up with the builder paying more. The clerk at the other end of the deal is always just the powerless representative of the bureaucracy and has no authority to exercise any discretion, and the manager isn't available when you are there to pay the fee. The math to do these calculations is non negotiable, and is structured that the City collects the most possible.
I am going to try and get this one knocked down a little, because it is so outrageous, but I think I may be screwed. I leave a little money in the budget for construction contingencies, but I didn't have any money set aside for getting gouged before we even started digging the basement.
Another mistake I made with this transaction is I felt like I had to go through with it in order to get my permission to proceed with the job in before the long weekend. By doing this I was able to give the permit to my contractor along with the deposit. If I delayed, I'd risk further losses by missing my window to get the underground work in before the season ends. So now that the City has the money, it will be even more reluctant to revise the fee. I may have been better off to try and fight the fee before paying, or just making a better effort to get around it.