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HomeMy WebLinkAboutCS 02/01 - REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: January 15,2001 REPORT NUMBER: CS 02-01 SUBJECT: 2001 Interim Levy and Interim Tax Installment Due Dates RECOMMENDATION: It is recommend that report CS 02-01 of the Director, Corporate Services & Treasurer be received by Council and that: 1. an interim levy be adopted for 2001 for all of the realty property classes; 2. the interim levy installment due dates be February 26 and April 26, 2001; 3. the Director, Corporate Services & Treasurer be authorized to make any changes or undertake any actions necessary, including altering due dates, in order to ensure the tax billing process is completed; - 4. the attached by-law, providing for the imposition of the taxes, be read three times and approved by Council; and, 5. the appropriate City of Pickering officials be authorized to take the necessary actions to give effect thereto. ORIGIN: Director, Corporate Services & Treasurer AUTHORITY: Municipal Act, R.S.O. 1990 as amended, Section 370(1) FINANCIAL IMPLICATIONS: Adoption of the recommendations and passing the by-law will allow staff of the Corporate Services Department to bill the 2001 interim levy to all properties. Passing of the by-law will assist the City of Pickering to meet its financial obligations and reduce any borrowing costs. (The first school board payment is due on March 31 '\ 2001.) EXECUTIVE SUMMARY: - Each year, prior to the adoption of the estimates for the year, Council authorizes the adoption of an interim levy. In previous years, the interim levy was calculated by multiplying the tax rate by 50 per cent and this value was then multiplied by the current assessed value of the property. Under new Provincial legislation, the 2001 interim levy is calculated by multiplying the 2000 Report to Council CS 02-01 Date: January 15,2001 Subject: 2001 Interim Levy and Interim Tax Installment Due Dates Page 2 - taxes levied on the property by 50 per cent. The tax levy raises funds that are used for the continuing operations of the City, Region and the School Boards. BACKGROUND: In previous years, the interim tax rate calculation was based on the relationship between the property's current assessed value and the corresponding municipal tax rate. In other words, the interim taxes were calculated as: (Current Assessed value) X 50% X (Municipal tax rate) = Interim tax levy For the 2001 interim levy, the relationship between assessed value and municipal tax rate in theory no longer exists. Instead, the 2001 interim levy for the majority of properties is calculated by taking the total property taxes paid in 2000 multiplied by 50 per cent. For example: Total taxes paid in 2000 Multiplied by Interim Taxes Payable $2,000 50% $1.000 At first glance, the taxes payable would appear to be the same whether we used the 2000 or 2001 interim tax calculation methodology. However, the recent Province wide re-assessment is NOT taken into consideration when calculating the interim taxes payable. For those property owners where the assessment went down or up, the impact of the assessment changes is postponed to the final 2001 tax bill. Property owners who received substantial assessment increases lose the benefit of spreading the potential tax increases over four payments. - The above example regarding 2001 tax calculation would apply to the majority of the properties except for newly constructed homes or buildings and the Bill 79 realty tax class family. For the Bill 79 realty tax family, the Bill 79 capping adjustment factor has to taken into consideration. For those property owners that received a 2000 supplementary tax bill, the 2001 interim tax bill is calculated by also including a portion of their supplementary tax bill. (Initially, new homeowners taxes are based on the assessed value of their land. A separate tax bill is issued for the taxes related to the structure and the tax bill is retroactive to the date of occupancy.) Billing Software Changes As mentioned above, in previous years, the interim tax bill was simply calculated by multiplying the previous year's tax rate by 50%. For the 2001 interim billing, the software vendor has to make adjustments to the billing software to apply the 50% rate to actual taxes levied. In addition, the billing software has to be adjusted for those property's that received a supplementary tax bill. The tax software vendor has issued a preliminary warning stating that there may be a delay in issuing the interim tax bill. The changes to the interim tax bill calculation has translated into additional workload for taxation staff. Staff have been keying revised assessment information into the system due to Section 442 adjustments (demolitions) and part year ARB decisions. (In previous years, the new assessment roll data would reflect the assessment changes.) In addition, a more detailed testing program has been designed to ensure that all of the assessment changes are reflected in the 2001 interim tax bill. Proposed Billing Schedule - Recommendation#3, will allow the Director of Corporate Services & Treasurer some latitude, limited by Provincial legislation, in effecting whatever may be necessary in order to ensure that the taxes are billed properly and in a timely fashion. The proposed 2001 billing cycle is outlined in scenario#l below. Report to Council CS 02-01 Date: January 15,2001 Subject: 2001 Interim Levy and Interim Tax Installment Due Dates Page 3 Interim Final Scenario#l Scenario#2 Scenario#3 Scenario#4 Feb 26, April 26 March 28, April 26 One date - April 26 Two installments April June, Sept. June, Sept. June, Sept. June, Sept. If there are substantial delays in the interim billing of taxes due to software problems or Provincial government regulation changes, then there exists the possibility of the interim taxes being billed as outlined under either scenario#2,3 or 4. It was always staff s understanding that Recommendation#3 would be used to change the due dates by a few days in order to meet Provincial legislation requirements. (Section 399, subsection six of the Municipal Act states the property owner must have at least twenty-one days to pay their taxes.) A report would be prepared to Council if the taxes were being billed under scenarios number two to four. The proposed interim installment due dates for 2001 are similar to those in place since 1976. ATTACHMENTS: 1. By-Law to Establish the 2001 Interim Installment Due Dates Prepared By: Approved / Endorsed By: ~ ---M~ -<-=-) "Di1lis A. Paterson Director, Corporate Services & Treasurer ~ - Stan Karwowski Manager of Finance GP:vw Attachment Recommended for the consideration of Pickering City Council Thomas J. uinn, Chief Administrative Officer - -- ;"':1 '1 I '~!l-r i C C' -:J :., ,f "...l I.)U\' 01 THE CORPORATION OF THE CITY OF PICKERING - BY-LAW NO. Being a by-law for the collection of taxes and to establish the installment due dates for the Interim Levy 2001. WHEREAS Section 370, subsection (1) of the Municipal Act R.S.O. 1990, as amended, provides that the council of a local municipality may, before the adoption of the estimates for the year, under section 367, may pass a by-law levying amounts on the assessment of property, in the local municipality ratable for local municipality purposes; and WHEREAS, the Council of the Corporation of the City of Pickering deems it appropriate to provide for such an interim levy on the assessment of property in this municipality. NOW THEREFORE, THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1, The amounts levied shall be as follows: (a) For the residential, pipeline, farmland and managed forest property classes there shall be imposed and collected an interim levy of: If no percentage is prescribed, 50% of the total taxes for municipal and school purposes levied on in the year 2000. - (b) For the multi-residential, commercial and industrial property classes there shall be imposed and collected an interim levy of: If no percentage is prescribed, 50% of the total taxes for municipal and school purposes levied on in the year 2000. (c) For the payment-in-lieu property classes, there shall be imposed and collected an interim levy of: If no percentage is prescribed, 50% of the total taxes for municipal and where applicable for school purposes, on in the year 2000. 2. For the purposes of calculating the total amount of taxes for the year 2000 under paragraph one, if any taxes for municipal and school purposes were levied on a property for only part of 2000 because assessment was added to the collector's roll during 2000, an amount shall be added equal to the additional taxes that would have been levied on the property if taxes for municipal and school purposes has been levied for the entire year. 3. The provision of this by-law apply in the event that assessment is added for the year 2001 to the collector's roll after the date this by-law is passed and an interim levy shall be imposed and collected. 4. Taxes shall be payable to the Treasurer, City of Pickering. 5. When not in default, the payment of taxes, or any installment thereof, may also be made at any financial institution permitted by the Municipal Act, R.S.O. 1990, c. MAS, as amended, as designated by the Treasurer. 6. 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. MAS, as amended, to the address of the 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. -. 7. The Treasurer or the Tax Collector shall be and they are hereby authorized to accept part payment from 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 percentage charge imposed or collectable under Section 399, Subsection (3) of the Municipal Act R.S.O. 1990, in respect to non-payment of any taxes or any class of taxes or of any installment thereof - 8. The Treasurer-Collector is hereby authorized to prepare and give one separate tax notice for the collection of 2001 taxes, one notice being an lNTERIM notice, with two installments, as follows: INTERIM Tax Notice - due date of the first installment February 26,2001 - due date of the second installment Apri126, 2001; or either date adjusted by the Director, Corporate Services & Treasurer 9. Except in the case of taxes payable under Section 33 and 34 of the Assessment Act, R.S.O. 1990, c.A3l, as amended, the percentage charge (one and one-quarter percent) 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 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 to collect at once, 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. - 10. In respect of taxes payable under Sections 33 and 34 of the Assessment Act, R.S.O. 1990, c.A.3l, as amended, the percentage charge (one and one-quarter percent) 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 days 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. 11. Nothing herein contained shall prevent the Treasurer or 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. 12. Where tenants ofland 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. 13. If any section or portion ofthis 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. - 14. That this by-law is to come into effect on the 1st day of January, 2001. _. BY-LAW read a first, second and third time and finally passed this 5th day ofFebraury, 2001. Wayne Arthurs, Mayor Bruce Taylor, Clerk - -