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HomeMy WebLinkAboutFIN 16-23 Report to Council Report Number: FIN 16-23 Date: September 25, 2023 From: Stan Karwowski Director, Finance & Treasurer Subject: Write-off of Property Taxes and Vesting of Lands Related to Property Tax Sale - File: F-4210-001 Recommendation: 1. That Report FIN 16-23 of the Director, Finance & Treasurer be received; 2. That the Treasurer be authorized to prepare and register a Notice of Vesting in the name of The Corporation of the City of Pickering; 3. That taxes totaling $326,135.52 as set out in this report, of which the City’s portion is $95,136.06, to be written-off pursuant to the provisions of Subsection 354.3 of the Municipal Act, 2001; 4. That the corresponding penalty and interest be cancelled; and 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. Executive Summary: Taxation staff recently conducted a property tax sale as per the Municipal Act (the Act), and the City received no bids. There were three properties offered for sale, however they have reduced marketability due to the fact they were all landlocked. The Act provides that the City Treasurer may recommend to Council that uncollectible property tax accounts may be written-off when a property has been subject to an unsuccessful property tax sale. Council has the authority through subsection 354.3 of the Act to write -off the property taxes. The outstanding property taxes will be charged to the City, Durham Region and the respective School Boards. Additionally, the Act allows for the municipality to register a “Notice of Vesting” to acquire the property that was not sold through the property tax sale process. This report recommends that Council vest this property into City ownership. Financial Implications: If approved, the write-off of taxes as contained in this report represents a gross cost of $326,135.52 with a net cost to the City of approximately $95,136.06 (the balance is charged back to the Region of Durham and School Boards accordingly). Pickering’s share of the costs will be charged to the 2023 Current Budget allocation under General Government-Provision for Reduction in Property Taxes. The 2023 budget provision for Reduction in Property Taxes is $451,750.00. This account is used to cover the corresponding FIN 16-23 September 25, 2023 Subject: Write-off of Property Taxes and Vesting of Lands Page 2 Related to Property Tax Sale costs associated with property tax refunds mainly due to assessment appeals. Any unspent funds are transferred to the Assessment Reserve to eventually fund the resolution or settlement of assessment appeals. Over the last several years, during the annual budget presentation, the City’s Treasurer has made reference to the outstanding assessment appeals (multiple years) mainly for the commercial and industrial property tax class. This year, several of the assessment appeals have been settled. The year-to-date cost of property tax write-offs (City share) is $836,206.00 and this amount includes the $95,136.00 from the property tax sale process. The associated penalty to be cancelled is $518,344.09. Discussion: The City conducted a property tax sale for unpaid taxes on July 27, 2023 for three landlocked properties and no bids were received (unsuccessful tax sale). Pursuant to Section 354 of the Municipal Act, 2001, the Treasurer has the authority to recommend to Council that uncollectible taxes be written off after an unsuccessful tax sale. The only cost to the City is that the outstanding property taxes would be written-off in the same proportion as they were charged among the three levying bodies: City, Region and School Board (see table one below for allocation of property tax write-off). Table One Roll Number City Region School Board Total 010.021.06600 $53,878.24 $102,448.31 $29,999.96 $186,326.51 020.016.26170 $ 6,992.17 $ 10,935.90 $ 4,110.54 $ 22,038.61 020.017.00500 $34,265.65 $ 60,787.59 $22,717.16 $117,770.40 Total Tax Write-Off $95,136.06 $174,171.80 $56,827.66 $326,135.52 Section 379 of the Municipal Act, 2001 provides authority to Council to proceed with vesting of the lands into City ownership when a tax sale is unsuccessful. After consultation with City senior management team, it was determined that the City would be interested in two of these three properties. Upon Council approval, a Notice of Vesting will be prepared and registered with the Land Registry Office. If Council does not approve the vesting of lands and corresponding write off, property taxes will remain on the tax roll and increase taxes receivable. Attachment: 1. Property Tax Sale – Location of Properties FIN 16-23 September 25, 2023 Subject: Write-off of Property Taxes and Vesting of Lands Page 3 Related to Property Tax Sale Prepared By: Approved / Endorsed By: Original Signed By: Original Signed By: Karen Uphoff James Halsall Supervisor, Taxation Division Head, Finance Original Signed By: Stan Karwowski Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Original Signed By: Marisa Carpino, M.A. Chief Administrative Officer Attachment #1 to Report FIN 16-23 Parkdale S t reet W i l d w o o d C res c ent Cornell Court S trath m ore Crescent Rosefield Road Va l l e y F a r m R o a d Linwood Street B loom fieldC o urt Finch Avenue Re d w o o d L a n e B ridle Path Cir c l e D e nvale D r i v e Valley FarmRavine BeverleyMorgan Park Location MapProperty Roll Number:Municipal Address:Legal Description: 180102001700500 Date: Sep. 14, 2023 Valley Farm RoadCON 2 S PT LOT 21 SubjectLands 1:4,000 SCALE: THIS IS NOT A PLAN OF SURVEY. © The Corporation of the City of Pickering Produced (in part) under license from: © King's Printer, Ontario Ministry of Natural Resources. All rights reserved.; © His Majesty the King in Right of Canada, Department ofNatural Resources. All rights reserved.; © Teranet Enterprises Inc. and its suppliers. All rights reserved.; © Municipal PropertyAssessment Corporation and its suppliers. All rights reserved. City DevelopmentDepartment HydroCorridor HydroCorridor Parkdale S t reet W i l d w o o d C res c ent Cornell Court S trath m ore Crescent Rosefield Road Va l l e y F a r m R o a d Linwood Street B loom fieldC o urt Finch Avenue Re d w o o d L a n e B ridle Path Cir c l e D e nvale D r i v e Valley FarmRavine BeverleyMorgan Park Location MapProperty Roll Number:Municipal Address:Legal Description: 180102001626170 Date: Sep. 14, 2023 2075 Valley Farm RoadCON 2 PT LT 20 NOW RP 40R4935 PT 2 SubjectLands 1:4,000 SCALE: THIS IS NOT A PLAN OF SURVEY. © The Corporation of the City of Pickering Produced (in part) under license from: © King's Printer, Ontario Ministry of Natural Resources. All rights reserved.; © His Majesty the King in Right of Canada, Department ofNatural Resources. All rights reserved.; © Teranet Enterprises Inc. and its suppliers. All rights reserved.; © Municipal PropertyAssessment Corporation and its suppliers. All rights reserved. City DevelopmentDepartment HydroCorridor HydroCorridor Strouds Lane Al t o n a R o a d TilsonCourt Waterford Gate Twyn Rivers Drive A u t u m n C r e s c e n t Sheppard A venue Foxwood Trail Pineview Lane O l d F o r e s t R o a d C a lvi n g t o n D r i v e T r e e t o p W a y H i g h b u s h Trail G r a n b y C o u r t South PetticoatRavine SouthPetticoatRavine Location MapProperty Roll Number:Municipal Address:Legal Description: 180101002106600 Date: Sep. 14, 2023 Granby Court AltonaForest PLAN 40M1923 BLKS 33 AND 34 C.N.R. SubjectLands 1:4,000 SCALE: THIS IS NOT A PLAN OF SURVEY. © The Corporation of the City of Pickering Produced (in part) under license from: © King's Printer, Ontario Ministry of Natural Resources. All rights reserved.; © His Majesty the King in Right of Canada, Department ofNatural Resources. All rights reserved.; © Teranet Enterprises Inc. and its suppliers. All rights reserved.; © Municipal PropertyAssessment Corporation and its suppliers. All rights reserved. City DevelopmentDepartment C.N.R.