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HomeMy WebLinkAboutCS 29-09 4 REPORT TO EXECUTIVE COMMITTEE PICKERING Report Number: CS 29-09 Date: September 14, 2009 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2009 Final Tax Due Dates for Commercial, Industrial and Multi-Residential Realty Tax Classes Recommendation: 1. That Report CS 29-09 of the Director, Corporate Services & Treasurer be received; 2. That the Director, Corporate Services & Treasurer be authorized to issue the final 2009 Tax Bills for Commercial, Industrial and Multi-residential properties with a due date of October 19th, 2009; 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 2009 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. If Members of Council approve this report at the Executive Committee, the outside printer will be given direction to start the printing of the tax bills in order to have the bills mailed earlier and received sooner by the various businesses. This will provide more lead time for businesses and improve customer service. Report CS 29-09 Date: September 14, 2009 Subject: 2009Final Tax Due Dates for Commercial, Industrial and Multi- Page 2 41 Residential Realty Tax Classes Financial Implications: The attached By-law is for the final billing of 2009 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 May 20, 2009 with due dates of June 26t" and September 28t" 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 2009 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 CVA 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 CVA was the fact that some businesses 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 2009 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" (OPTA) to verify non-residential assessment data. Every municipality within Durham Region uses the OPTA system. Assessment Review Board decisions and Minutes of Settlement decisions have been incorporated into the capping calculations up to the "freeze" date of June 29, 2009. Report CS 29-09 Date: September 14, 2009 bject: 2009Final Tax Due Dates for Commercial, Industrial and Multi- Page 3 ' GG Residential Realty Tax Classes Bill 83 - Legislative Changes to Capping Legislation 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%. 2. Minimum annual threshold increase of 5% of total CVA 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. The minimum CVA for new construction properties was 60% in 2006. For 2009, these properties (new construction) are now fully phased-in. The purpose of these tax tools is to accelerate the movement of non-residential taxpayers to full CVA 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. Under the Municipal Act, Subsection 343 (1), the tax bills have to be mailed 21 days before the due date. Taxation staff are cognizant of this legislative requirement and design the tax billing process to meet this requirement. However, there have been a few requests from the taxpayers for a longer period of time ( beyond the 21 day period). If the report is approved at the Executive Committee level,, the outside printer will be given direction to start printing and mailing the tax bills and therefore, provide a longer notification period that in-turn is meeting some of the customers requests. In 2009, 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 28th. The proposed final instalment due date of October 19th 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 2004 to 2009. i Report CS 29-09 Date: September 14, 2009 Subject: 2009Final Tax Due Dates for Commercial, Industrial and Multi- Page 4 43 Residential Realty Tax Classes Table One Non-Residential Final Billing Dates Year Number of Date Instalments 2004 One October 15, 2004 2005 One October 14, 2005 2006 One October 13, 2006 2007 One October 12, 2007 2008 One October 15, 2008 2009 One October 19, 2009 As Table One indicates, the proposed 2009 final due date closely follows the pattern established since 2004. The one instalment due date will assist the City in managing its cash flow. Attachments: 1. By-law to Establish the 2009 Final Tax Instalments and Due Date for the Commercial, Industrial and Multi-Residential Tax Classes. Prepared By: Approved / Endorsed By: Stan Karwowski Gillis A. Paterson Manager, Finance & Taxation Director, Corporate Services & Treasurer GAP:tp Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council I lTma'sJ. Quinn, R R.; C~ III Chief Administrative Officer ATTACHMENT # TO REPORT # _~L2 9 -a9 THE CORPORATION OF THE CITY OF PICKERING 44 BY-LAW NO. XXXX/09 Being a By-law of The Corporation of the City of Pickering to Establish the 2009 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; and, WHEREAS the Regional Municipality of Durham has passed By-law No. 13-2009 to establish tax ratios and By-law No. 12-2009 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. 10-2009 to set and levy rates of taxation for Regional Solid Waste Management and By-law No. 08-2009 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. 6924/08) 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 2009. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. For the year 2009, 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. 695,2/09 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. By-law No. Page 2 45 2. Where applicable, taxes shall be adjusted in accordance with Bill 140, as amended and its Regulations. 3. The levy provided for shall be reduced by the amount of the interim levy for 2009. 4. The 2009 final tax calculations for the industrial, commercial and multi-residential realty tax classes is based on a freeze date of June 29, 2009. 5. The decrease retained percentage for the realty class is outlined below: Multi residential 100.0000% Commercial 70.5520% Industrial 68.6219% 6. The 2009 taxes owed for the commercial, industrial and multi-residential assessed properties shall be due in one instalment on October 19, 2009, 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, S. 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 14th day of September 2009. i David Ryan, Mayor Debi Wilcox, City Clerk