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HomeMy WebLinkAboutTR 27/97 - ,tI~ OF PIC ,,0 ~ l.ullo~ 1). :r ;,,~ z .... Gl ~ REPORT TO COUNCIL FROM: Gillis A. Paterson Director of Finance DATE: December 22, 1997 REPORT NUMBER: TR 27/97 SUBJECT: 1998 Interim Levy, Tax Instalment Due Dates and Imposition of Penalty and Interest for Non-Payment of Taxes PURPOSE: To provide for an interim levy and due dates, tentative final levy due dates and to establish the rate of penalty and interest on the non-payment of taxes and tax arrears. RECOMMENDATION: - It is recommended that: 1. an interim levy be adopted for 1998, not exceeding that permitted under existing legislation, being a levy on the whole of the assessment according to the last revised assessment roll, a sum not exceeding 50 per cent, as described in the Fair Municipal Finance Act, 1997 (Bill 106 and NO.2 Bill 149), and the dqtes be set as February 24 and April 27, 1998; 2. final levy due dates, subject to change, be set at June 25 and September 25, 1998; 3. the penalty for non-payment of current year taxes be increased from 12.0 per cent per annum to 15.0 per cent per annum, commencing March 1, 1998; 4. interest on tax arrears be increased from 12.0 per cent per annum to 15.0 per cent per annum, commencing March 1, 1998; 5. the appropriate by-laws, in the form attached, be read three times and approved by Council; and .-/ 6. the appropriate officials of the Town of Pickering be authorized to give effect thereto. \ - AUTHORITY: Municipal Act, R.S.O. 1990, as amended Fair Municipal Finance Act, 1997 (Bill 106) Fair Municipal Finance Act, 1997 (No.2) (Bill 149) December 22, 1997 Report to Council #TR 27/97 - 2 - ~ FINANCIAL IMPLICATIONS; \ Adoption of the recommendations will allow staff of the Finance Department to bill the 1998 interim levy on the taxpayers of the Town and establish tentative final levy due dates to finance the expenditures of the Town and to meet Region and School Boards' levies. Increasing the penalty and interest rates from 12 to 15 per cent will result in an increase in revenue of approximately $200,000 in 1998. BACKGROUND: Each year, prior to the adoption of the estimates for the forthcoming year, Council authorizes the adoption of an interim levy. This levy, which may not exceed 50 per cent of the amount that would be raised by applying the mill rate for all purposes for the preceding year, provides funds to ensure the continuing operations of the Corporation. It also includes sufficient funds for the Region and School Boards purposes. A penalty may be charged on the non-payment of taxes of up to 15 per cent per annum for the period ending December 31 of the year in which the taxes are payable. Following which interest may be charged at up to 15 per cent per annum, until the taxes, penalties and interest are paid. .-- Discussion: Interim Levv In a typical year, our current situation would be clear, Le., the Town would prepare an interim billing, for Town, Region and School Boards purposes, based upon long established legislative authorities. With the introduction of a number of new pieces of legislation, including the new Ontario Fair Assessment System, on January 1, 1998 and with legislation, regulations and clarification yet to follow, it is extremely difficult to be certain at this time as to exactly how events will unfold. Hence, a certain lack of specifics in this report. However, we are reasonably certain that an interim levy will be permitted and required for Town, Region and School Board purposes. The timing of everything, including Council's meetings in the early part of the new year, necessitates presenting this report now. ..-/ The instalment due dates for 1998 are similar to those in place since 1976. The dates have been set to allow a three business day grace period before a non- payment penalty is applied on the first of the month following. - The amount of the interim levy is, under current legislation, limited to approximately 50 per cent of the prior year's taxes for all purposes. In 1998, under new legislation, with further clarification pending, the Business Occupancy Tax (BOT) is disappearing as a separate tax and is being "rolled up" into the commercial/industrial realty tax. Furthermore, the Farm Tax Rebate will disappear to be replaced by a lower rate of tax. While it is hoped the tax treatment from a billing perspective will be clear by the time the final bills are sent out, this may not be so in the case of the interim bills. December 22, 1997 Report to Council #TR 27/97 - 3- - Penaltv and Interest on Overdue Taxes Taxes are due and payable at a place and manner and at such times as may be approved by the Council of a municipality. When taxes are not paid in the year in which they come due, a penalty is added. In the year following, and until the taxes are paid, interest is added. Today, in most municipalities, the two rates are the same. Pickering currently charges 12 per cent per annum and the recommendations are to increase the two rates to 15 per cent per annum each. Our reasons for the recommendations are that the penalty is just that, a penalty for the non- payment of a debt, that reflects not only the costs of financing but the internal costs of handling overdue payments. Many businesses charge 2 per cent per month and it is my understanding that all municipalities around Pickering charge 15 per cent per annum. Charge cards are typically 18 per cent per annum and higher. Pickering should not be seen as a source of financing, a lending institution, an alternative source of financing to pay other higher interest bearing obligations, nor be significantly out of step with the practices of the surrounding municipalities. - Moreover, Pickering implemented a Pre-authorized Payment Plan, where each year's payments are spread out over 10 months. Payments are accepted at a number of financial institutions as well as at the Finance Department. With these steps, Pickering has made the payment of taxes easier. The date of March 1, 1998 was selected to coincide with the first due date in the new year, thereby providing the requisite minimum 21 days notice. ATTACHMENTS: 1. 2. 3. By-law to provide for the addition of interest to tax arrears. By-law to provide for the imposition of a penalty for non-payment of taxes. By-law to establish Instalment Due Dates for the 1998 Interim and Final Levy. ..--/ - k~~~z-. ~ Gillis A. Paterson GAP/jt Copy: General Manager . -- ..... - ------ ./ THE CORPORATION OF THE TOWN OF PICKERING - I3Y-LAWNO. Being a by-law to provide for the addition of interest to tax arrears WHEREAS, pursuant to the provisions of the Municipal Act, R.S.O. 1990, chapter MAS, section 419(2). the Council of The Corporation of the TowlI of Pickering may by by-law require that the TowlI Treasurer add to the amount of all taxes due and unpaid interest at such rate not exceeding 15 per cent per anllum as Council determines, from the 31 st day of December of the year in which the taxes were levied until the taxes are paid; NOW THEREfORE, THE COUNCIL OF THE TOWN OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. EITt:t:tive MardI 1, 1998, the Treasurer shall add to the amount of all taxes in arrears, which arc due and unpaid, interest on same at the rate of 15.0 per cent per annum until the taxes are paid. This By-law shall come into force on January I, 1998. - BY-LA W read a first, second and third time and finally passed this 22nd day of December, 1997. Wayne Arthurs, Mayor Bruce Taylor, Clerk .// .- ~ THE CORPORA TlON or THE TOWN OF PICKERING BY-LA W NO. Being a by-law to provide for the imposition of a penalty for non-payment of taxes WHEREAS, pursuant to the provisions of the Municipal Act, R.S.O. 1990, chapter MAS, section 399(4), the Council of The Corporation of the Town of Pickering may by by-law impose a percentage charge as a penalty for non-payment of taxes not exceeding 15 per cent per annum, or such lower rate as Council determines, from the date payment is due until it is made or until the 31 st day of December of the year in which the taxes were levied, whichever is earlier; ../' NOW TI-IERErORE, TI-IE COUNCIL or THE TOWN OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. As a penalty for the non-payment of taxes, ~I charge of 15.0 per cent per annum shall be imposed for the non-payment of taxes, until payment is made or until December 3 I of the year in which the taxes are levied, whichever is earlier. 2. The Treasurer shall give notice of the percentage charge imposed by section I, above, to the persons taxed by causing notice thereof to be mailed to the address of the residence or place of business of such persons. - 3. This By-law shall come into force on January 1, 1998. BY-LA W read a first, second and third time and finally passed this 22nd day of December, 1997. Wayne Arthurs, Mayor .-/ Bruce Taylor, Clerk - THE CORPORATION OF THE TOWN OF PICKERING BY-LAW NO. - Being a by-law to establish Instalment Due Datesfor the 1998 Interim and Final Levy WHEREAS By-law 354/76, enacted by the Council of the Corporation of the Town of Pickering on January 2, 1976, provides generally for the payment and collection of taxes; and WHEREAS Section 370 o[ the Municipal Act R.S.O. 1990, as amended by the Fair Municipal Finance Act, 1997 and tbc Fair Municipal Finance Act, 1997 (No.2) provides that the council of a municipality may, before tbe estimatcs [or thc fortbcoming year are adopted, pass a by-law levying taxes on thc assessment of property in the municipality; and WIIEREAS the said section 370, as amended, provides in subsection 9 thereof that the interim taxes shall be levied "on the assessment according to the assessment roll, as most recently revised before the by-Jaw is passed, [or taxation in 1997 in accordance with the following: I. Taxes on residential and [arm assessment shall be set by levying a mill rate that does not exceed the prescribed percentage (or 50 per cent if no percentage is prescribed) of the residential mill ratc levied in 1997; 2. Taxes on commercial and industrial assessment shall be set by levying a mill rate that does not exceed tbe mill rate that would raise, on all the commercial and industrial assessment rateable for local municipality purposes in 1997, tbe prescribed percentage (or 50 per cent if no percentage is prescribcd) of the total taxes raised on that commercial and industrial assessment in 1997 including all busincss taxes levied in 1997"; and ".,.,.., WHEREAS no pcrcentages have been prescribed for the purposes of the said subsection 370(9); and WHEREAS it is decmed expcdient at this time to fix the amount and due datcs for the payment of instalments of tbe 1998 interim and final levy. NOW THEREFORE, THE COUNCIL OF THE TOWN OF PICKERING HEREBY ENACTS AS FOLLOWS: I. The mill rate [or taxes on residential and farm assessment will not exceed 50 per cent of the residential mill rate levied in 1997 on such assessment in the Town of Pickering. \ 2. Before the adoption of the estimatcs for 1998, there shall be levicd as taxes on the assessment of all property in the Town of Pickering rateable for local municipality purposcs according to the assessment roll as most recently revised before this by-law is enacted for taxation in 1997, in amounts calculated by the Trcasurer. 3. Taxes shall be payable to the Treasurer, Town of Pickering. ../ 4. When not in default, the payment of taxes, or any instalment thereof, may also be made at any financial institution permitted by the Municipal Act, R.S.O. 1990, c. MA5, as amended, as designated by the Treasurer. 5. The Treasurer or Tax Collector may mail, or cause to be mailed, all notices of taxes required in accordance with the provisions of the Municipal Act, R.S.O. 1990, c. MA5, as amended, to the address of tbe residence or place of business of the person taxed pursuant to this by-law. Notices will not be mailed to tenants. It is the responsibility of the person taxed to notify and collect taxes from tenants or other persons. .-.. ~ ,~ ../ ,.-- - 2 - 6. The Treasurer or the Tax Collector shall be and they arc hereby authorized to accept part payment ti'Olll time to time on account of any taxes due, and to give a receipt for such part payment provided that acceptance of any such part payment does not affect the collection of any percentagc charge imposed or collectable under section 9 in respect to non-payment of any taxes or any class of taxes or of any instalment thereof. 7. The Treasurcr- Tax Collector is hereby authorized to prepare and give two separate tax notices for the collection of 1998 taxes, one notice being an iNTERIM notice, with two instalments, and one being a FiNAL notice with two instalments, as follows: iNTERIM Tax Notice - due date of the first instalment February 24, 1998 - due datc of thc second instalment April 27, 1998 fiNAL Tax Notice - due date of the first instalment June 25,1998 - due date of the second instalment September 25, 1998 8. 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 defnult continues but not after December 31 of the yenr in which the tnxes become pnyable, and it shnll be the duty of a Tax Collector, immediately after the several dates named in section 2 to collect at once, by distress or otherwise under the provisions of the nppl icable statutes all such taxes, assessments, rents, rales 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. 9. In respect of taxes pnyable under sections 33 and 34 of the Assessment Act, R.S.O. 1990, c. A.31, as amended, the percentage charge imposed as a penalty for non-payment of taxes and monies payable as taxes shall be added to every amount of taxes so payable remaining unpaid on the first day after twenty-one days from the date of mailing by the Treasurer or a Tax Collector of a demand for payment thereof and on the first day of each calendar month thereafter in which default continues but not after December 31 of the year in which the taxes become payable; and it shall be the duty of a Tax Collector immediately after the expiration of the said twenty-one dnys to collect at once by distress or otherwise under the provisions of the applicable statutes, all such taxes as shall not have been paid on or before the expiration of the said twenty-one day period, together with the said percentage charges as they are incurred. 10. Nothing herein contained shall prevent the Tax Collector from proceeding at any time with the collection of any rate, tax or assessment, or any part thereof, in accordance with the provisions of the statutes and by-laws governing the collection of taxes. II. Where tenants of land owned by the Crown or in which the Crown has an interest are liable for the payment of taxes and where any such tenant has been employed either within or outside the municipality by the same employer for not less than thirty days, such employer shall pay over to the Treasurer or Tax Collector on demand out of any wages, salary or other remuneration due to such employee, the amount then payable for taxes under this by-law and such payment shall relieve the employer from any liability to the employee for the amount so paid. 12. This by-law is to come into effect on the 1 st day of January, 1998. BY-LA W read a first, second and third time and finally passed this 22nd day of December, 1997. Wayne Arthurs, Mayor Bruce Taylor, Clerk