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HomeMy WebLinkAboutCS 40-07 REPORT TO EXECUTIVE COMMITTEE Report Number: CS 40-07 Date: September 10, 2007 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2007 Final Tax Due Dates for Commercial, Industrial and Multi- Residential Realty Tax Classes Recommendation: 1. That Report CS 40-07 of the Director, Corporate Services & Treasurer be received; 2. That the Director, Corporate Services & Treasurer be authorized to issue the final 2007 Tax Bills for Commercial, Industrial and Multi-residential properties with a due date of October 12th, 2007; 3. That 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; 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 2007 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 2007 property taxes for commercial, industrial and multi-residential properties. This billing of final property taxes will raise approximately $20.8 million for the City, Durham Region and School Boards. Tax bills for the Residential tax classes were mailed on June 20,2007 with due dates of July 11th and September 2ih. Report CS 40-07 Date: September 10, 2007 Subject: 2007 Final Tax Due Dates for Commercial, Industrial and Multi- Residential Realty Tax Classes Page 2 35 Sustainability Implications: Passing the attached By-law will allow the City to obtain the funds required to maintain its financial sustainability objectives as provided for in the 2007 Current Budget. It also provides for the raising of property taxes for the Region of Durham and the school boards. Background: In 1998, the Province introduced Current Value Assessment or CV A 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 CV A 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 2007 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, the City of Pickering uses a Provincial database program called "Online Property Tax Analysis" (OPT A) to verify non-residential assessment data. Every municipality within Durham Region uses the OPT A system. Assessment Review Board decisions and Minutes of Settlement decisions have been incorporated into the capping calculations up to the cut-off date of May 1st, 2007. Bill 83 - Leaislative Chanaes to Cappina Leaislation In 2004, 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 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%. Report CS 40-07 Date: September 10, 2007 . Subject: 2007 Final Tax Due Dates for Commercial, Industrial and Multi- 'I . 36 Residential Realty Tax Classes Page 3 2. Minimum annual threshold increase of 5% of total CV A 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 CV A BY 2008. For 2007, the minimum rate for New Construction properties is 90%. The purpose of these tax tools is to accelerate the movement of non-residential taxpayers to full CV A taxes (where 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. In 2007, the City of Pickering issued an interim tax bill to all property owners in all tax classes with two instalment dates of February 27th and April 27th. Final Residential tax bills were mailed on June 20, 2007. The proposed final instalment due date of October 12th for all properties in the Non-Residential tax classes, provides these tax classes with some additional time to pay their tax bill. Table One below illustrates the final billing due dates for the non-residential tax classes from 2000 to 2007. Table One Non-Residential Final Billing Dates Year Number of Instalments One One One One One One One One Date 2000 2001 2002 2003 2004 2005 2006 2007 October 13, 2000 October 29,2001 October 29,2002 October 15, 2003 October 15, 2004 October 14, 2005 October 13, 2006 October 12, 2007 As Table One indicates, the proposed 2007 final due date closely follows the pattern established since 2000. The one instalment due date will assist the City in managing its cash flow. Attachments: 1. By-law to Establish the 2007 Final Tax Instalments and Due Date for the Commercial, Industrial and Multi-Residential Tax Classes. Report CS 40-07 Date: September 10, 2007 Subject: 2007 Final Tax Due Dates for Commercial, Industrial and Multi- Residential Realty Tax Classes Page 4 37 Prepared By: Approved I Endorsed By: ,~ ~ - -, Stan Karwowski Manager, Finance & Taxation ~. ./ ~:-":..:.-=.: d'_'.'~~~ ~;? C"~ ::s" . Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Copy: Chief Administrative Officer Recommended for the consideration of Pickering Cit Coun . II THE CORPORATION OF THE CITY OF PICKERING 38 BY-LAW NO. Being a By-law of The Corporation of the City of Pickering to Establish the 2007 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. 36-2007 to establish tax ratios and By-law No. 35-2007 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. 34-2007 to set and levy rates of taxation for Regional Solid Waste Management and By-law No. 33-2007 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. 6721-07) 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 2007. NOW THEREFORE THE COUNCil OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOllOWS: 1. For the year 2007, 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. 6782/07 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. 2. 6782/07. Where applicable, taxes shall be adjusted in accordance with Bill 140, as amended and its Regulations. 39 3. The levy provided for shall be reduced by the amount of the interim levy for 2007. 4. The 2007 final tax calculations for the industrial, commercial and multi-residential realty tax classes is based on the "cut-off" date of May 1,2007. 5. The decrease retained percentage for the realty class is outlined below: Multi residential Commercial Industrial 93.670% 23.2970% 69.7644% 6. The 2007 taxes owed for the commercial, industrial and multi-residential assessed properties shall be due in one instalment on October 12 2007, or as adjusted by the Treasurer. 7. 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, 8.0. c.25 as amended. 8. 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. 9. Taxes shall be payable to the Treasurer, City of Pickering. 10. 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 1 ylh day of September 2007. David Ryan, Mayor Debi Bentley, City Clerk REPORT TO EXECUTIVE COMMITTEE 40 Report Number: CS 41-07 Date: September 10, 2007 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Section 357/358 of the Municipal Act - Adjustment to Taxes Recommendation: 1. That Report CS 41-07 of the Director, Corporate Services & Treasurer be received; 2. That the write-offs of taxes as provided under Section 357/358 of the Municipal Act, 2001 be approved; and, 3. That the appropriate officials of the City of Pickering be authorized to take the necessary action to give effect hereto. Executive Summary: Not Applicable Financial Implications: If approved, the write-off of taxes as contained in this report represents a gross cost of $42,760.21 with a net cost to the City of approximately $10,337.00, the balance being charged back to the Region of Durham and the School Boards. Pickering's share of the costs will be charged to the 2007 Current Budget allocation under General Government - Provision for Uncollectable Taxes. The 2007 budget provision is $277,000 and $36,994.44 including the above has been spent to date. Sustainability Implications: implications. This report does not contain any sustainability Background: The Municipal Act provides the Treasurer with various tax tools regarding the administration and collection of property taxes. Under the provisions of the new Municipal Act, 2001, as amended, Section 357 of the Act provides for the reduction of taxes due to fire, demolition, exemption, assessment change or error and the tax reduction is applicable to the current year only. Section 358 of the new Municipal Act, 2001, allows for the reduction of taxes due to assessment error and this section can be applied to property taxes for the two preceding years.