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HomeMy WebLinkAboutCS 21/01 ~ REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: June 19,2001 REPORT NUMBER: CS 21-01 SUBJECT: 2001 Tax Rates for all Classes of Property and Final Tax Due Dates for All Realty Tax Classes Except for Commercial, Industrial & Multi-Residential Realty Classes RECOMMENDATION: That it is recommended that report CS 21-01 of the Director, Corporate Services & Treasurer be received for information and that: 1. the 2001 tax rates for the City of Pickering be approved as contained in Schedule A to By- law No. 5856/01 attached hereto; 2. the attached By-law No. 5856/01, providing for the imposition of the tax rates approved under Recommendation 1 above, be read three times and approved; 3. the tax levy due dates for the Final Billing be September 14, 2001 and October 15, 2001 excluding the industrial, multi-residential and commercial realty tax classes; - 4. the Director of 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; 5. the Director of Corporate Services & Treasurer be authorized to make any changes to the final tax rates to comply with Provincial regulations; and, 6. the appropriate staff of the City of Pickering be given authority to give effect thereto. ORIGIN: Director, Corporate Services & Treasurer AUTHORITY: The Municipal Act, R.S.O. 1990, as amended, and Regulations The Assessment Act, R.S.O. 1990, as amended, and Regulations The Education Act, R.S.O. 1990, as amended, and Regulations FINANCIAL IMPLICATIONS: Not applicable - Report to Council CS 21-01 Date: June 19,2001 - Subject: 2001 Tax Rates for all Classes of Property and Final Tax Due Dates for All Realty Tax Classes Except for Commercial, Industrial & Multi-Residential Realty Classes Page 2 EXECUTIVE SUMMARY: Adoption of the above recommendations and the attached By-law provides for the levying of tax rates required to raise the levy approved in the 2001 Current Budget ofthe City of Pickering and to levy tax rates for education and for the Region of Durham. BACKGROUND: The 2001 final tax billing process will consist of two separate components: 1. residential properties; and, 2. commercial, industrial and multi-residential realty classes. City's Net Tax Levy and Tax Rate Increase On May 22, 2001, City Council approved Report CS 12-01 of the Director of Corporate Services & Treasurer that provided for a tax levy of $24,628,816 resulting in a tax increase of 9.8%. This increase is applied to the "City portion" of the property tax bill. At the time the budget was passed, Corporate Services staff were waiting for the various taxation policy issues to be resolved at the upper tier level and therefore, were not in a position to calculate the 2001 tax rates. Hard Cap and its Impact on Tax Rates - On February 5, 2001, the Director of Corporate Services & Treasurer provided a report that outlined the significant changes associated with the management of taxation and policy due to the Province passing Bill 140 (Continued Protection for Property Taxpayers Act.) One of the more interesting tortuous twists ofthis bill was the introduction of the "Hard Cap." The hard cap concept only applies to the multi-residential, industrial and commercial realty tax classes. The hard cap concept is a taxation rule that determines if a municipal budgetary increase can be passed onto a realty tax class. The hard cap tax rule is if the tax ratio for the realty tax class is above the Provincial average (as determined by the Province) then the municipal budgetary increase can not be flowed to that tax class. For the City of Pickering and Durham Region, the industrial realty tax class family (including large industrial) had a tax ratio of 2.98 which was above the Provincial Average of2.63. Therefore, the City of Pickering's municipal budgetary increase of9.8% that translated into an increase of$155,000 for the industrial tax class could not be passed to this realty tax class and has to be collected from the other property classes. The residential tax class would absorb approximately 76% of the hard cap cost with the balance being absorbed by the other classes, ego multi-res and commercial. 2001 Tax Rates & Property Taxes The final 2001 tax rates are submitted to Council for approval in the form of the 2001 Tax Levy By-law (Appendix A). Table one below, provides a comparison of the property taxes to be levied on an residential property assessed at $200,000 for 2000 and $224,040 for 2001. The median increase in residential assessment due to the change in valuation dates from June 1996 to June 1999 was 12.02%. The arithmetical average increase due to re-assessment was 13.80%. A residential property that has an increase of less than 12.02% in CV A, will experience a smaller increase than that shown below as a result of the re-assessment. - Report to Council CS 21-01 Date: June 19, 2001 .- Subject: 2001 Tax Rates for all Classes of Property and Final Tax Due Dates for All Realty Tax Classes Except for Commercial, Industrial & Multi-Residential Realty Classes Page 3 Table One 2000 & 2001 Residential Property Taxes 2000 2001 INCR INCR. $200,000 $224,040 $ % ASSESSMENT ASSESSMENT City $708.25 $777.09 $68.74 9.72 Region 1,476.29 1,580.15 103.85 7.03 Education 828.00 835.67 7.67 0.93 Total $3,012.54 $3,192.81 $180.36 5.99 Overall, the combined 2001 residential taxes for City of Pickering residents will increase by $180.36 or 5.99% for a household assessed at $224,040 that had an increase in their CV A of 12.02%. The 2001 budget tax levy increase was approved by Council at 9.8%. The average increase in residential assessment was 13.8%. However, the median (mid point) of the assessment increase where half are higher and half are lower was 12.02%. Staff fee that this is the better number ot use as the "skewing" effects oflarge increases in vacant land and golf courses are somewhat mitigated. Therefore, using the 12.02% for the residential analysis results in a more representative increase of9.72%. - It is interesting to note, that the education tax rate as established by the Province is not revenue neutral for Pickering residents. When the Province reduced its education tax rate to offset the impact of re-assessment, the reduction was calculated on a Province wide basis to create a revenue neutral position. However, because Pickering's re-assessment was above the Provincial average, the reduction in the education rate was insufficient to create a revenue neutral position. There has been a decrease in the 2001 tax rates in comparison to 2000 due to re-assessment. The residential tax rates for 2000 and 2001 is outlined below. Table Two 2000 & 2001 Residential Tax Rates 2000 2001 % Chanl!:e City of Pickering .00354124 .00346855 -2.05 Region of Durham .00738148 .00705298 -4.45 Education* .00414000 .00373000 -9.90 Total .01506272 .01425153 -5.38 * The Province is responsible for setting the education tax rate. The following two diagrams, illustrates the sharing of the property tax bill between the City, Region of Durham and School Boards. Commercial Residential 56.2% - 49.5% Report to Council CS 21-01 Date: June 19,2001 -- Subject: 2001 Tax Rates for all Classes of Property and Final Tax Due Dates for All Realty Tax Classes Except for Commercial, Industrial & Multi-Residential Realty Classes Page 4 Standardized Tax Bill The Province recently passed regulations mandating certain information and format requirements for the final 200 I property tax bills. In addition to the standardized tax bill, municipalities are required to provide ratepayers with a schedule explaining the change in their tax bilL The City of Pickering's standard tax bill meets the mandated information as outlined in Ontario Regulation 75/01 and most recently amended by Ontario Regulation 170/01 of the Municipal Act. However, the City of Pickering's tax bill has to be changed in order to meet the Provincial requirement of providing an explanation of tax changes. Attachment 2 contains the Provincial mandated "explanation of changes schedule" for the residential and non residential tax classes. (The difference between the two schedules is that non residential schedule contains information requirements for capping.) The Province is currently programming their Online Property Tax Analysis (OPTA) database to accommodate the non residential information requirements. However, these programming changes are not being implemented for the residential tax class and therefore, municipalities will be left on their own to complete the information requirements of this schedule. Tax Due Date Installments - Recommendation 3 provides for the due dates for the payment of residential taxes being September 14,2001 and October 15, 2001. The traditional June installment date is delayed until mid September mainly due to the changes in the tax bills mentioned above. Computer programming, printing and information changes have to be designed and implemented. City of Pickering has recently received version 5.0 of its tax software that is required to do the final tax billing. Staff are currently loading the software into the tax test environment. If the new version is stable and passes all of the control checks, it will be then loaded into the production environment. The new version of the software will produce an extract file that can be used to produce a tax bill. The City of Pickering currently contracts out the printing of its tax bills to the Royal Bank. The Royal Bank has scheduled a meeting during the first week of July with its various municipal tax printing customers to design a standard bill that will meet the requirements of the Provincial regulations. The Royal Bank has informed staff that they require 60 days to reprogram their computer systems. On June 11, 2001, the Royal Bank received from our software vendor a computer file with the proposed new layout that is to be used by their system to produce the tax bills. In order to meeting the Provincial billing requirements of 21 days notice, the tax bills have to be in the mail by August 24th. If the tax bills can be produced earlier, the due dates would change to August 29th and September 26th in which case an information report would be brought to Council on August 7, 2001 informing of the changes in the due dates. ."-'" Report to Council CS 21-01 Date: June 19,2001 ,.. Subject: 2001 Tax Rates for all Classes of Property and Final Tax Due Dates for All Realty Tax Classes Except for Commercial, Industrial & Multi-Residential Realty Classes Page 5 Other Recommendations 1 and 2 provide for the levying of all tax rates on all classes of property even though the non residential properties will be billed at a later date because the claw back percentages have not yet been determined. (Staff have received advice that the claw back percentages should be included in the billing by-law.) Staff will bring a separate report to Council regarding the tax billing of non residential realty classes. If staff are in a position to print the bills by mid August, then the due dates for the non-residential tax class would be September 14, 2001 and October 15,2001 the same as residential. Recommendations 4 and 5 will allow the Director of Corporate Services & Treasurer some latitude, limited by Provincial legislation, in effecting whatever may be necessary in order to ensure the taxes are billed properly and in a timely fashion. ATTACHMENTS: 1. 2001 Tax Rate By-Law 2. Provincial (mandated) Explanation of Changes Schedules Prepared By: Approved I Endorsed By: - ~ <-~~?---::, Gillis A. Paterson, Director, Corporate Services & Treasurer Stan Karwowski, Manager, Financial Services GAP:vw Attachments Recommended for the consideration of Pickering City Council Thomas J. Quinn, Chief Administrative Officer - ATTACHMENT#-L- TO REPORT # CS.;Jj-OJ THE CORPORATION OF THE CITY OF PICKERING - BY-LAW NO. 5856/01 Being a by-law to adopt the estimates of all sums required to be raised by taxation for the year 2001 and to establish the Tax Rates necessary to raise such sums. WHEREAS it is necessary for the Council of The Corporation of the City of Pickering, pursuant to the Municipal Act, R.S.O. 1990, ch.M.45, 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, to levy on the whole ratable property according to the last revised assessment roll for The Corporation of the City of Pickering the sums set forth for various purposes in Schedule "A", for the current year; and, WHEREAS the Regional Municipality of Durham has passed By-law No. 47-2001 to establish tax ratios and By-Law 42-2001 to adopt estimates of all sums required by The Regional Municipality of Durham for the purposes of the Regional Corporation and By- Law 45-2001 to set and levy rates of taxation for Regional Solid Waste Management and By-laws No. 44-2001 to set and levy rates of taxation for Regional General Purposes and set tax rates on Area Municipalities; and, - WHEREAS the Regional Municipality of Durham has provided the 2001 education tax rates for the various realty classes; and, WHEREAS sub section 392(4) and (5) of the Municipal Act, as amended, permits the issuance of separate tax bills for separate classes of real property for 2001; and, WHEREAS an interim levy was made by the Council of The Corporation of the City of Pickering (pursuant to By-law No. 5802/01) before the adoption of the estimates for the current year. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. For the year 2001, The Corporation of the City of Pickering (the "City") shall levy upon the Property Classes set out in Schedule "A", the rates oftaxation as set out in Schedule "A", 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". 2. The levy provided for in Schedule "A" shall be reduced by the amount of the interim levy for 2001. 3. The Tax Levy due dates for the Final Billing be September 14,2001 and October 15,2001 for all classes excluding the non residential tax classes. - 4. If any section or portion of this By-law or of Schedule "A" is found by a court of competent jurisdiction to be invalid, it is the intent of Council for The Corporation of the City ofPickering that all remaining sections and portions of this By-law and of Schedules "A" continue in force and effect. - 5. This By-law comes into force on the date of its final passing. BY-LA W read a first, second and third time and finally passed this day ofJune, 2001. Wayne Arthurs, Mayor Bruce Taylor, Clerk - ,- By-law No. 5158101 Schedw. A 200' ToRa.. 2001 City Roljon e<b:llllon Tolol p- Region e<b:lltion TOTAL QIl, - - - - JllIJila om llJJIng llJJ.I.Ill!i ~ Ruidential & Farm 5,2OB,148,3:!S 0.00346855 0.00705298 0.00373000 0.01425153 S 18,064.724 S 36.732,988 S 19,426,393 . 74,22".083 Multi-Residential 44,336,075 0.0086367 0.01758192 0.00373000 0.02992882 382,917 n8,627 165,374 1,326,918 Comrnettial 406,472,722 0.005104005 0.0104518 0.02003928 0.035153111 2,089,290 4,248,372 8,145,413 14,483,074 Corrmerdal-General 3,54&,818 0.00514005 0.0104518 XXXXXXX 0.01559185 18,241 37,M2 COfTYl18fCial . Excess land 2,914.251 0.00359504 0.1)(1731608 0.0140278 0.024~190 10,_ 21,321 .40,881 72,687 Commen:::iaf Vacant land 9,749,380 0.00359804 0.00731808 0.0140278 0.02494190 35,079 71,327 136,762 243,168 Shoppino Centm 211,827,441 0.00418932 0.00851858 0.01833289 0.02004058 881,413 1,804,_ 3,459,712 8,151,594 Shopping Centres Vacant 227,825 0.00293253 0.005ge329 0.01143343 0.02032925 ... 1.357 2,603 4,627 Office Buiking 4,877,650 0.00796379 0.01619364 0.03104807 0.05520550 37,252 75,748 145,232 258,232 OffICe Buiking Excess Land 493,970 0.0D557485 0.01133555 0.02173385 0038&<385 2,154 S,... 10,738 19,()8g tndusbial 113,358,589 0.00711331 0.01503359 0.02811257 0.04&25947 808,341 1,704,158 2J1I50,032 5.470.529 Indualrial Vacant 3,183,oet 0.00462385 0.009n204 0.01807352 0.03138921 14,717 31,105 54,028 99,850 Industrial V...nt Land 27,988,178 0.004623&5 0.00977204 0.01897352 0.0313021 129,398 273,482 475,024 877,904 Large Indus1riaI 22,390,951 0.01137801 0.02404257 0.0417807 0.07717928 254,720 538,336 935,0152 1,728,117 Large Inclus1rial Vacant 0.00739441 0.01562767 0.02714445 0.050t8853 Panting Lot 1,225,000 0.00514005 0.01045180 0.02003928 0.03563111 6,297 12,803 24,548 "3,84a Pipelines 19,894,000 0.00428424 0.00867093 0.01730720 0.03024237 84,833 172.499 "',309 601,842 Farmlands 38,042,350 0.00088714 0.00178325 0.00093250 0.00358289 32,_ 67,078 35,474 135,541 Managed Fontsts 1851100 0.00086714 0.00176325 0.1)0093250 0.00356289 ~~~ 6.505 To'" 6120325494 $ 22,m,721 $ 48,579,802 $ 38,383308 $ 105 747,299 pavments in Ueu ProD8l1ies Rlllaidentiat & Farm Full 11&,434,751 0.......... 0.00705298 0.00373000 0.01425153 S 403,880 . 821,212 . 434.302 S 1,659,373 Residential & Farm Tax. Ttnant 66.237,814 0.00346855 0.00705298 0.00373000 0.01425153 229,749 467,174 696,923 Residential & farm Gen 37,811,eae 0.......... 0.00706296 XXXXXXXX 0.01052153 131,152 266.665 397,637 Multi-Residential Full 3.214,000 0.0086367 0.01756192 0.00373000 0.02992862 27,758 56,4<<1 11,988 98,191 CClITWT1EttCiaI Full 39,612,479 0.00514005 0.0104518 0,02003926 0.03583111 203,610 414,022 793.805 1,411,437 CotTrne~ Full. Shared PIL 30,512,860 0.00514005 0.0104518 0.02003926 a.035e3111 156,1S38 318,914 611,455 1,087,207 Corrmeleial Full- Tax. Tenant 1,540,017 0.0051400S 0.0104518 0.02003926 0.03563111 7,918 18,096 30,861 54,873 CorTYneltial Gen 3,046.n1 0.00514005 0.0104518 XXXXXXXX 0.01559185 15,661 31.844 47,505 Corrmel"Cl~ Full- Excess land 7,473,435 0.00359804 0.00731806 0.0140278 0.02494190 28,890 54,676 104,836 188.402 Corrwnercial Gen - Vacant Land 1,881,000 0.00359804 0.00731806 XXXXXXXX 0.01091410 6,046 12.298 16,347 Commercial Vacant Land Full 0.00359804 0.00731805 0.0140278 0.02494190 Office Building Full. Shared P1L 14,483,125 0.00798379 0.01619364 0.03104807 0.05520550 115,181 234,211 449,052 798,444 Office Buiklng G.n 0.007i6379 0.01819364 XXXXXXXX 0.02415743 Office BUilcin9 Vaeant Full 0.00557465 0.01133555 0.02173385 0.03884385 0I'fice Building Vacant Gen 0.00557485 0.01133555 xxxxxxxx 0.01891020 Indwltrial Full 1,113,788 0.00711331 0_01503359 0.02811257 0.04825947 7,923 18.744 29,_ 53,751 Industrial Gen 903,827 0.00711331 0_01503359 XXXXXXXX 0.02214690 6,429 13,588 20.017 Industrial Full- Shared PIL 645,710 0.00711331 0.01~3359 0.02811257 0.04825a47 4,593 9,707 16,861 31.162 - Industrial Full- Tax Tenant too,440 0.00711331 0.01503359 0.026112S7 0.04825947 71. 1,510 2,823 4.847 Ind. Exca.. Land - Shllred PIL 5,808,407 0.00462365 0.OOin204 0.01697352 0.0313Gi21 26,856 56,760 98.589 182.205 Industrial Vacant Gen 238,000 0.00482365 0.OO9n204 XXXXXXXX 0.Ot43i559 1,100 2,328 3,-428 Industrial Vacant Land Full 0.00462365 0.00977204 0.01697352 0.03136921 Industlial Vacant Land Gen O.CI04G2385 0_OO9nZ04 XXXXXXXX 0.01439589 Large Industri.1 Full. Shared PIL 33,869,760 0.01137801 0.02404257 0.0417807 0.On17928 38S,303 814,317 1,414.428 2,6t4.045 Latge Industrial Gen 0.01137601 0_02404257 XXXXXXXX 0.03541858 Large Ind. Exceu Land. Shared PlL 1,551.045 0.00739441 0,01582767 0.02714445 0.05016653 11.513 24,333 42,285 78,112 P8f'klng Lot Full 0.00514005 0.0104518 0.02003926 0.03563111 PatlUng lot Gen 0.00514005 0.0104518 XXXXXXXX 0.01559185 - - - Tola! P1LS 386.264,935 $ 1,769,095 $ 3,632,861 $ 4,040,146 $ 9,442,102 Total Asaeument 8,486,590,429 $ 24,628,818 $ 50212,463 ~ $ 115,189,401 ~ payments in lieu of taxes a11he General Ralll exdudesttte education tax rate componant - oeJ20!2001 Planb_bylaw_schedule.x1s ATTACHMENT#L. TOREPORT#~~I-O, - O. Reg. 75/01 THE ONTARIO GAZEITE / LA GAZETIE DE L 'ONTARIO Schedule 2 EXPLANATION OF TAX CHANGES .".,..., Explanation of Tax Changes yyyy To YYYY I Property Class (es) l.l I Municipiility 1.2 Assessment Roll No. 1.3 1.4 1.5 1.6 Final YYYY Taxes Final YYYY Taxes I 2.1 I I 2.2 I Total year over Year Change I 2.3 I Explanation of Tax Changes Final YYYY Taxes: 3.1 * YYYY Annualized Taxes; 3.2 YYYY Local Municipal Levy Change: 3.3 YYYY Upper-Tier Municipal Levy Change: 3.4 YYYY Provincial Education Levy Change: 3.5 YYYY Tax Change Due to Reassessment: 3.6 **Final YYYY Taxes: 3.7 * An annualized tax figure is used in this analysis to compensate for mid-year adjustments in tax treatment or assessment value. Ifa property did not have any mid-year adjustments, the annualized taxes should equal the Final YYYY Tax amount listed above. **Final tax amount applies only to the property or portiones) of property referred to in this notice. . .- O. Reg. 75/01 THE ONTARIO GAZEITE /LA GAZElTE DE L'ONTARIO Schedule 3 EXPLANATION OF PROPERTY TAX CALCULATIONS --- 'Explanation of Tax Calculations YYYY Taxation Year I Property Class (es) I.l I Municipality 1.2 Roll No. 1.3 1.4 1.5 1.6 Total YYYY CVA Taxes Final Taxes I 2.1 I I 2.2 I Calculation for Final Taxes YYYY CV A Taxes 3.1 *YYYY Annualized Taxes 3.2 yyyy Tax Cap Adjustment 3.3 YYYY Provincial Education Levy Change 3.4 YYYY Municipal Levy Change 3.5 ..Final YYYY Taxes 3.6 · An annualized tax figure is used in this analysis to compensate for mid-year adjustments in tax treatment or assessment value. Ifa property did not have any mid-year adjustments, the annualized taxes should equal the Final yyyy Tax amount listed above. ..Final tax amount applies only to the property or portion(s) of property referred to in this notice. -