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HomeMy WebLinkAboutCS 61-05 REPORT TO EXECUTIVE COMMITTEE Report Number: CS 61-05 Date: September 1, 2005 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2005 Final Tax Due Dates for Commercial, Industrial and Multi- Residential Realty Tax Classes Recommendation: It is recommended that report CS 61-05 of the Director, Corporate Services & Treasurer be received; and that: the Director, Corporate Services & Treasurer be authorized to issue the FINAL 2005 Tax Bills for Commercial, Industrial and Multi-residential properties with a due date of October 14th, 2005; the Director, Corporate Services & Treasurer be authorized to make any changes or undertake any actions necessary, including altering the due date, in order to ensure the tax billing process is completed and in order to comply with Provincial Regulations; the necessary By-law attached to this report be read three times and approved; and, the appropriate officials of the City of Pickering be given authority to give effect hereto, Executive Summary: Adoption of the above recommendations and passing the attached By-law provides for the final 2005 tax billing for non-residential tax classes (commercial, industrial and multi-residential). During the last few years, the City has billed the final non-residential taxes separately mainly due to the additional steps that are required as a result of the capping legislation. In addition, the final education tax rates for the industrial tax class as issued by the Province were not approved by the Region until June 29, 2005. Report CS 61-05 Date: September 1, 2005 Subject: 2005 Final Tax Due Dates for Commercial, Industrial and Multi- Residential Realty Tax Classes Page 2 Financial Implications: The attached By-law is for the FINAL billing of 2005 property taxes for commercial, industrial and multi-residential properties. This billing of final property taxes will raise approximately $24.1 million for the City, Durham Region and School Boards. Tax bills for the Residential tax classes were issued on June 21, 2005 with due dates of July 15th and September 29th. Background: In 1998, the Province introduced Current Value Assessment or CVA on a Province wide basis to replace the old patch quilt system (throughout the Province) where each municipality used a different base year for assessment purposes. The end result of CVA was the fact that some business were experiencing property tax increases well above 100%. To reduce the property tax increases, the Province introduced capping legislation in 1998. The City of Pickering will soon be in a position to issue the final 2005 property tax bills in accordance with the capping provisions of Bill 140, Continued Protection For Property Taxpayers Act, passed by the Province on December 4, 2000 and implemented through various Regulations. (Bill 140 replaced the original capping legislation of Bill 79 introduced and approved in 1998). This legislation was put in place to limit assessment reform related increases to 5% per year on commercial, industrial and multi-residential properties. Under this legislation, property owners facing increases due to property assessment reform had their increases "capped" (reduced). Conversely, those properties experiencing decreases were limited to that permitted under the legislation. This meant that taxes have to be "clawed back" from those experiencing decreases to fund the loss of revenue resulting from the capped increases. The funding of the capping protection is "paid for" on a Region wide basis. The Region of Durham acts like a banker in this process. In other words, the total cost of the capping protection for example, the commercial tax class is paid for by the other commercial properties throughout the Region by having a portion of their related property tax decrease withheld (clawed back). As part of the Region wide process, City of Pickering uses a Provincial database program called "Online Property Tax Analysis" or OPTA to verify non-residential assessment data. Every municipality within Durham Region uses the OPTA system. The OPTA system became operational in January and taxation staff worked throughout the spring verifying the data and investigating the discrepancies. Assessment Review Board decisions and Minutes of Settlement were incorporated into the capping calculations up to May 6th, which was the cut-off date for these changes. After this date the area municipalities would have completed their analysis of the assessment and taxation data. Bill 83 - Leqislative Chanqes to Capping Legislation Last year, the Province passed Bill 83 (An Act to Implement Budget Measures), which provided for various optional tax tools that could be used for the non-residential tax Report CS 61-05 Date: September 1,2005 Subject: 2005 Final Tax Due Dates for Commercial, Industrial and Multi- Page 3 Residential Realty Tax Classes class. In a two tier municipal government structure, the upper tier has the option to select all or some of the tax tools. These tax tools consisted of the following options: 1. The assessment related increase cap was increased from 5% to 10%. 2. Minimum annual threshold increase of 5% of total CVA property taxation. 3. A "billing" threshold be established whereby a property who is within the $250 of its CVA based taxation would be required to pay its full CVA/property taxes. 4. Properties that fall within the new construction category will now have their property taxes phased-in to full CVA over four years. As stated above, the upper tier level of government has the responsibility to adopt or select the various tax tool options and Durham Regional Council adopted all of the tax tool options this spring. The purpose of these tax tools was to accelerate the movement of non-residential taxpayers to full CVA (which is assessment multiplied by the corresponding tax rate). By using all of the new tax tools, there are approximately an additional 2,500 properties (Durham Region wide) that are now paying full property taxes at full CVA. In addition, by adopting these tax tools for 2006, more taxpayers will be moved to full CVA/property taxes due to the compounding benefit or effect of the tax tools. For this year, the City of Pickering issued an interim tax bill to these realty property tax classes with two installment dates (February 25th and April 28th). The proposed final installment date of October 14th, provides these tax classes with some additional time to pay their tax bill. Table One below, provides a breakdown of the final billing dates for the non-residential tax classes from 2000 to 2005. Table One Non-Residential Final Billing Dates Year Number of Date Installments 2000 One 2001 One 2002 One 2003 One 2004 One 2005 One October 13, 2000 October 29, 2001 October 29, 2002 October 15, 2003 October 15, 2004 October 14, 2005 As Table One indicates, the proposed 2005 final due date closely follows the pattern established during the last five years. The one installment date will assist the City in managing its cash flow due to the fact the total School Board payment of approximately $9.9 mi~ion that is required on September 30th. Report CS 61-05 Date: September 1, 2005 Subject: 2005 Final Tax Due Dates for Commercial, Industrial and Multi- Page 4 Residential Realty Tax Classes Attachments: 1. By-law to Establish the 2005 Final Tax Installments Commercial, Industrial and Multi-Residential Tax Classes and Due Date for the Prepared By: Stan Karwowski Manager, Finance & Taxation GAP:vw Attachment Copy: Chief Administrative Officer Recommended for the consideration of Approved / Endorsed By: Director, Corporate Services & Treasurer Pickering City Council ,, The'maS J. Ou~', Chie:F_,~,dmini~O~ ','%~,CHH~NT# [, ,,TO THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. 6563/05 Being a By-law of The Corporation of the City of Pickering to Establish the 2005 Final Property Taxes and Due Date for the Commercial, Industrial and Multi-Residential Tax Classes. WHEREAS it is necessary for the Council of The Corporation of the City of Pickering, pursuant to the Municipal Act, 2001, S.O. 2001, c.25 as amended, to pass a By-law to levy a separate tax rate on the assessment in each property class; and, WHEREAS the property classes have been prescribed by the Minister of Finance under the Assessment Act, R.S.O. 1990, ch.A.31, as amended and its Regulations; and, WHEREAS it is necessary for the Council of The Corporation of the City of Pickering, pursuant to the Municipal Act, 2001, S.O. 2001, c.25, to levy on the whole rateable property according to the last revised assessment roll for The Corporation of the City of Pickering. WHEREAS the Regional Municipality of Durham has passed By-law No. 16-2005 to establish tax ratios and By-law No. 17-2005 to adopt estimates of all sums required by The Regional Municipality of Durham for the purposes of the Regional Corporation and By-law No. 15-2005 to set and levy rates of taxation for Regional Solid Waste Management and By-law No. 14-2005 to set and levy rates of taxation for Regional General Purposes and set tax rates on Area Municipalities; and, WHEREAS it is necessary for the Council of The Corporation of the City of Pickering pursuant to the Municipal Act, to levy on the whole rateable property according to the last revised assessment roll for The Corporation of the City of Picketing for the current year; and, WHEREAS an interim levy was made by the Council of The Corporation of the City of Pickering (pursuant to By-law No. 6451/05) before the adoption of the estimates for the current year; and, WHEREAS sub section 342 (2) of the Municipal Act, 2001, S.O. 2001, c.25 as amended, permits the issuance of separate tax bills for separate classes of real property for year 2005. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: For the year 2005, The Corporation of the City of Pickering (the "City") shall levy upon all Property Classes (Residential, Commercial, Industrial and Multi- residential) as set out in By-law No. 6534/05 of Schedule A, the rates of taxation, for the City of Pickering, the Region of Durham and for Education purposes on the current value assessment as also set out in Schedule A of By-law No. 6534/05. Where applicable, taxes shall be adjusted in accordance with Bill 140, as amended and its Regulations. The levy provided for shall be reduced by the amount of the interim levy for 2005. The 2005 final tax calculations for the industrial, commercial and multi-residential realty tax classes is based on the "cut-off" date as of May 6, 2005. 4. The decrease retained percentage for the realty class is outlined below: Multi residential 87.3879% Commercial 34.7922% Industrial 53.1784% The 2005 taxes owed for the commercial, industrial and multi-residential assessed properties shall be due in one installment on October 14, 2005, or as adjusted by the Treasurer. The education tax rate to be used for the 2005 industrial and large industrial tax classes is as follows: Industrial Tax Class industrial Vacant Land Industrial Excess Land .02037383 .01324299 .01324299 Large Industrial Tax Class .02339592 Large Ind. Vacant Land .01520735 Large ind. Excess Land .01520735 Except in the case of taxes payable under Section 33 and 34 of the Assessment Act, R.S.O. 1990, c.A31, as amended, the percentage charge as a penalty for non-payment of taxes and monies payable as taxes shall be added to every tax or assessment, rent or rate of any installment or part thereof remaining unpaid on the first day of default and on the first day of each calendar month thereafter in which such default continues pursuant to subsections 345 (1), (2) and (3) of the Municipal Act 2001, S.O.c.25 as amended. The Treasurer shall collect by distress or otherwise under the provisions of the applicable statutes all such taxes, assessments, rents, rates or installments or parts thereof as shall not have been paid on or before the several dates named as aforesaid, together with the said percentage charges as they are incurred pursuant to sections 349, 350 and 351 of the Municipal Act 2001, S.©. c.25as amended. If any section or portion of this By-law is found by a court of competent jurisdiction to be invalid, it is the intent of Council for The Corporation of the City of Pickering that all remaining sections and portions of this By-law continue in force and effect. Taxes shall be payable to the Treasurer, City of Pickering. This By-law comes into force on the date of its final passing. BY-LAW read a first, second and third time and finally passed this 19th day of September 2005. David Ryan, Mayor Debi Bentley, City Clerk