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HomeMy WebLinkAboutFIN 25-14 C',;ty 00 = Report to Executive Committee PI KERING Report Number: FIN 25-14 Date: December 8, 2014 From: Paul Bigioni Director, Corporate Services & City Solicitor Subject: Municipal Capital Facilities Property Tax Exemption Under Subsection 110(6) Municipal Act, Pickering Indoor Soccer Dome Recommendation: . 1. That Report FIN 25-14 of the Director, Corporate Services & City Solicitor be received; 2. That the Municipal Capital Facilities Tax Exemption under Subsection 110(6) of the Municipal Act, 2001 and corresponding By-law be approved in respect of the Pickering Indoor Soccer Dome facility located at 1975 Clements Road, Pickering; and, 3. That the appropriate officials of the City of Pickering be authorized to take the necessary action to give effect hereto. Executive Summary: Section 110(6) of the Municipal Act, 2001 allows a municipal council to pass a By-law to exempt from taxation for municipal and school board purposes, land on which municipal capital facilities are located. The passage of the attached By-law will exempt the Pickering Indoor Soccer Dome (located at 1975 Clements Road) from property taxes. This is necessary for the operation of the Indoor Soccer Dome by the Pickering Soccer Club (the "PSC") to be financially sustainable. The operation of the Indoor Soccer Dome by the PSD is a service of great value to the City's residents. Financial Implications: The indoor soccer dome owned by the City is licensed to the Pickering Soccer Club for one dollar and is not currently assessed as taxable by the Municipal Property Assessment Corporation ("MPAC"): MPAC may return this property as taxable in the future. By declaring it as a Municipal Capital Facility and passing the corresponding By-law, the property will be exempt from future property taxes. The total estimated annual property taxes for this property (on a full year basis) would be approximately $239,000, of which $47,000 would have been the City share. 130 Report FIN 25-14 December 8, 2014 Subject: Municipal Capital Facilities Property Tax Exemption Under, Page 2 Subsection 110(6) Municipal Act, Pickering Indoor Soccer Dome Discussion: Properties owned and occupied by a municipality are exempt from . taxation pursuant to Section 3 of the Assessment Act. However, when a municipality leases property, the property tax exemption is lost. Commercial businesses located at the Pickering Recreation Complex have attracted property tax liability. It is staffs understanding that the City of Oshawa (GM Centre) and Town of Whitby (Soccer Dome) have employed the same property tax tool to make their facilities exempt from property taxes. This property tax tool has been used for several municipal projects in Ontario, and is an appropriate element of municipal projects which provide benefit to the community. This property (1975 Clements Road) is licensed to PSC for the benefit of the community. The resulting exemption will allow the organization to provide a value added service to the community at a reduced operating cost. In accordance with the Municipal Act, MPAC, the Region of Durham, and the Secretary of any School Boards will be notified by the Clerk in writing that the property is now exempt from taxation. • Attachments: 1. By-law to Exempt 1975 Clements Road from Property Taxes Prepared By: Approved / Endorsed By: • Karen Uphoff Stan Karwowski (Acting) Supervisor, Taxation Divisio - -ad, Finance &Treasurer Paul Bigio Director, ore or- Services & City Solicitor Recommended for the consideration of Pickering City Council / . 26 2014- / ii I Tony Prevedel, P.Eng. Chief Administrative Officer 131 ATTACHMENT# I TO REPORT 4611 The Corporation of the City of Pickering By-law No. Being a by-law to designate certain lands as a municipal capital facility. Whereas Section 110 of the Municipal Act, 2001, S.O.2001, S.O., c.25, as amended, permits a municipality to enter into Agreements for the provision of municipal capital facilities; Whereas, Section 110 of the Municipal Act, 2001 permits a Council of a municipality to designate lands within the classes of lands described in Ontario Regulation 603/06 as municipal capital facilities and may exempt such facilities from taxation for municipal and school board purposes; Whereas 1975 Clements Road, Pickering is the address of municipal capital facilities located on real property owned by the City, which facilities are used for public recreational purposes; Whereas, the City and Pickering Soccer Club Inc. have entered into a Municipal Capital Facilities Agreement dated as of November 7, 2014 substantially in the form attached as Schedule "A" describing the use of lands at 1975 Clements Road for recreational purposes, and the exemption thereof from taxes for municipal and school purposes; Now therefore, the Council of The Corporation of the City of Pickering hereby enacts as follows: 1. The Council hereby designates the facilities at 1975 Clements Road, in the City of Pickering and all improvements thereto and all works, equipment, machinery and related systems and infrastructure as municipal capital facilities for recreational purposes and confirms the Agreement between the City and Pickering Soccer Club Inc., by which such designation is implemented, and which Agreement is attached as Schedule "A" to this by-law. 2. The said municipal capital facilities, located on lands owned by the City, are used for recreational purposes and are hereby exempted from taxation for municipal and school purposes for the period November 1, 2014 to November 14, 2029 or until such time as the City ceases to use the lands as a municipal capital facility as that term is definite in Ontario Regulation 603/06, whichever occurs first. 3. That this By-law is to come into effect on the 15th day of December, 2014. By-law passed this 15th day of December, 2014. David Ryan, Mayor Debbie Shields, Clerk 132 Schedule "A" • Municipal Capital Facility Agreement This Agreement dated as of the day of • , 2014 Between: City of Pickering (hereinafter referred to as the "City") • and Pickering Soccer Club Inc. (hereinafter referred to as "PSC") Whereas: 1. The City owns the lands known municipally as 1975 Clements Road in the City of Pickering; 2. The City has entered into an Agreement with PSC to provide for the use of the lands for recreational purposes; 3. The PSC wishes, pursuant to Section 110 of the Municipal Act, 2001, to exempt the lands from taxation for municipal and school purposes; 4. The City wishes, pursuant to Section 110 of the Municipal Act, 2001, to exempt the lands from taxation for municipal and school purposes; 5. The lands will.be used for municipal recreational purposes, thus qualifying for exemption as a municipal capital facility used for recreational purposes as described in Ontario Regulation 603/06; • Therefore, in consideration of the making of this Agreement and the mutual covenants contained herein, the parties undertake, covenant and agree as follows: • Designation 1. The City will by by-law designate the lands (1975 Clements Road) as municipal capital facilities. Property Tax Exemption 2. The City shall, pursuant to subsection 110(6) of the Municipal Act, 2001, exempt the lands from property taxation and school purposes. V 133 Term 3. The term of this Agreement and the designation of the lands as municipal capital facilities shall be from November 1, 2014 to the earliest of: a) November 14, 2029 b) The day PSC ceases to use the lands; Entire Agreement 4. This Agreement contains all the covenants, Agreement and understandings between the parties concerning its subject matter. The recitals at the head of this Agreement are true and accurate and form a part hereof. Executed by the parties as at the date first written above. The Corporation of the City of Pickering Per: Name: Title: Pickering Soccer Club Inc. Per: Name: Title: 134