HomeMy WebLinkAboutFIN 17-13From: Paul Bigioni
Director, Corporate Services & City Solicitor
Report to
Executive Committee
Report Number: FIN 17 -13
Date: July 2, 2013
Subject: 2013 Final Tax Due Dates for Commercial, Industrial and Multi- Residential
Realty Tax Classes
Recommendation:
That Report FIN 17 -13 of the Director, Corporate Services & City Solicitor be
received;
2. That the Director, Corporate Services & City Solicitor be authorized to issue the
final 2013 Tax Bills for Commercial, Industrial and Multi- residential properties with
a due date of September 16, 2013;
3. That the (Acting) Division Head, Finance & Treasurer be authorized to make any
changes or undertake any actions necessary, including altering the due date, in
order to ensure that the tax billing process is completed and in order to comply
with Provincial Regulations;
4. That the draft By -law attached to this report be enacted; and,
5. That the appropriate City of Pickering officials be authorized to take the necessary
actions to give effect hereto.
Executive Summary: Adoption of the above recommendations and passing the
attached By -law provides for the final 2013 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.
Financial Implications: The attached By -law is for the final billing of 2013 property
taxes for commercial, industrial and multi - residential properties. This billing of final
property taxes will raise approximately $25.7 million for the City, Durham Region and
School Boards. Tax bills for the Residential tax classes were mailed on May 31, 2013
27 th tH
with due dates of June 27 and September 27
Report FIN 17 -13
July 2, 2013
Page 2
Discussion: In 1998, the Province introduced Current Value Assessment or CVA
on a Province -wide basis to replace the old patch work system (throughout the
Province) where each municipality used a different base year for assessment purposes.
The end result of CVA was that some businesses 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 2013 property tax bills in
accordance with the capping provisions of Bill 140, Continued Protection for Property
Taxpayers Act, 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. For example, the total cost of the capping
protection for the commercial tax class is paid for by the other commercial properties
throughout the Region by having a portion of their property tax decrease withheld
(clawed back). As part of the Region -wide process, the City of Pickering uses a
Provincial database program called "Online Property Tax Analysis" (OPTA) to verify
non - residential assessment data. Every municipality within Durham Region uses the
OPTA system. Assessment Review Board decisions and Minutes of Settlement
decisions have been incorporated into the capping calculations up to the "freeze" date
of May 28, 2013.
Bill 83 — Legislative Changes to Capping Legislation
In 2004, the Province passed Bill 83, Budget Measures Act, 2004 which provided for
various optional tax tools that could be used for the non - residential tax 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 consist of the following options:
Assessment - related increase cap raised from 5% to 10 %.
2. Minimum annual threshold increase of 5% of total CVA property taxation.
3. Billing threshold established whereby a property that is within $250 of its CVA -
based taxation is required to pay its full CVA property taxes.
4. The minimum CVA tax for new construction properties was 60% in 2006. New
construction properties are now fully phased -in at 100% CVA tax.
Report FIN 17 -13
July 2, 2013
Page 3
The purpose of these tax tools is to accelerate the movement of non - residential
taxpayers to full CVA taxes (such that taxes are calculated using Current Value
Assessment multiplied by the corresponding tax rate). The Region of Durham adopted
all of the tax tools referenced above.
Under the Municipal Act, Subsection 343(1), the tax bills must be mailed 21 days before
the due date. Taxation staff are cognizant of this legislative requirement and design the
tax billing process to meet this requirement. The coordinated efforts between OPTA
and Durham Region municipalities have accelerated the capping calculation process
over the last few years, allowing the capping `freeze' to be completed earlier in the
year. This has provided an opportunity for the City to set an earlier tax due date for non-
residential properties.
Table One below provides a summary of the billing dates for the residential and non-
residential property tax groups.
Table One
2013 Billing Dates
As the above table indicates, the residential taxpayer has four instalment dates and the
non - residential taxpayer has three dates. In the past, the City has provided indirect
cash flow assistance to the non - residential taxpayer by providing them the advantage of
skipping the June instalment date and by having the final instalment due date in mid -
October. This year, taxation staff are still providing the June "payment holiday,"
however, the final due date has been advanced by approximately 30 days to assist the
City in its cash flow management.
Attachments:
By -law to Establish the 2013 Final Tax Instalment and Due Date for the
Commercial, Industrial and Multi- Residential Tax Classes.
February
April
June
September 16
September 27
Instalment
Dates
Residential
X
X
X
X
4
Non - Residential
X
X
X
3
As the above table indicates, the residential taxpayer has four instalment dates and the
non - residential taxpayer has three dates. In the past, the City has provided indirect
cash flow assistance to the non - residential taxpayer by providing them the advantage of
skipping the June instalment date and by having the final instalment due date in mid -
October. This year, taxation staff are still providing the June "payment holiday,"
however, the final due date has been advanced by approximately 30 days to assist the
City in its cash flow management.
Attachments:
By -law to Establish the 2013 Final Tax Instalment and Due Date for the
Commercial, Industrial and Multi- Residential Tax Classes.
Report FIN 17 -13
Prepared By:
— ad-� e-)� , -
Donna De ong
Supervisor, Taxation
Recommended for the consideration
of Pickering City-,Council _
Tony Prevedel, P.Eng.
Chief Administrative Officer
July 2, 2013
Page 4
Approved /Endorsed By:
Stan Karwowski, MBA, CMA
(Acting) DivisoiqHead, Finance & Treasurer
Paul Bigioni
Director, Co
i7, 2W3
ices & City Solicitor
ATTACHMENT # I TO REPORT #F')41,j -13
The Corporation of the City of Pickering
By -law No. XXXX /13
Being a By -law to Establish the 2013 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; and,
Whereas the Regional Municipality of Durham has passed By -law No. 09 -2013 to
establish tax ratios, and By -law No. 07 -2013 to adopt estimates of all sums required by
The Regional Municipality of Durham for the purposes of the Durham Region Transit
Commission, and By -law No. 06 -2013 to set and levy rates of taxation for Regional
Solid Waste Management, and By -law No. 08 -2013 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 Pickering 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. 7261/13) 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
2013.
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
For the year 2013, 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. 7279/13 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.
By -law No. Page 2
2. Where applicable, taxes shall be adjusted in accordance with Bill 140, as
amended and its Regulations.
3. The levy provided for shall be reduced by the amount of the interim levy for 2013.
4. The 2013 final tax calculations for the industrial, commercial and multi - residential
realty tax classes is based on a freeze date of May 28, 2013.
5. The 2013 taxes owed for the commercial, industrial and multi- residential
assessed properties shall be due in one instalment on September 16, 2013, or as
adjusted by the Treasurer.
6. 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 instalment 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. 0. 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 instalments 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.O. c.25 as amended.
7. 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 full
force and effect.
8. Taxes shall be payable to the Treasurer, City of Pickering.
9. This By -law is to come into effect on the date of its final passing.
By -law passed this 8th day of July, 2013.
David Ryan, Mayor
Debbie Shields, City Clerk