HomeMy WebLinkAboutCS 24-10
Ci Report To
Executive Committee
PICKERIN Report Number: CS 24-10
Date: June 14, 2010 1 1 1
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2010 Final Tax Due Dates for Commercial, Industrial and Multi-Residential
Realty Tax Classes
Recommendation:
1. That Report CS 24-10 of the Director, Corporate Services & Treasurer be
received;
2. That the Director, Corporate Services & Treasurer be authorized to issue the final
2010 Tax Bills for Commercial, Industrial and Multi-residential properties with a
due date of October 15th, 2010;
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 2010 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 2010 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 25, 2010
with due dates of June 28th and September 28 tH
Report CS 24-10 June 14, 2010
Subject: 2010 Final Tax Due Dates for Commercial, Industrial and Multi- Page 2
Residential Realty Tax Classes
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
2010 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 2010 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 May 27, 2010.
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:
Report CS 24-10 June 14, 2010
Subject: 2010 Final Tax Due Dates for Commercial, Industrial and Multi- Page 3
Residential Realty Tax Classes
113
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 2010,
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 2010, the City of Pickering issued an interim tax bill to all property owners in all tax
classes with two instalment dates of February 26th and April 28th. The proposed final
instalment due date of October 15th for all properties in the Non-Residential tax classes,
provides these tax classes with some additional time to pay their tax bill. It is
anticipated that the tax bills will be mailed by the end of July. Table One below
illustrates the final billing due dates for the non-residential tax classes from 2005 to
2010.
Table One
Non-Residential Final Billing Dates
Year Number of Date
Instalments
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
2010 One October 15, 2010
Report CS 24-10 June 14, 2010
Subject: 2010 Final Tax Due Dates for Commercial, Industrial and Multi- Page 4
Residential Realty Tax Classes
114
As Table One indicates, the proposed 2010 final due date closely follows the pattern
established since.2005. The one instalment due date will assist the City in managing its
cash flow.
Attachments:
1. By-law to Establish the 2010 Final Tax Instalments and Due Date for the
Commercial, Industrial and Multi-Residential Tax Classes.
Prepared By, Approved/Endorsed By:
Tracy Par ®rn Gillis A. Paterson
Acting, Co ator Taxation Services Director, Corporate Services & Treasurer
GAP:tp
Copy: Chief Administrative Officer
Recommended for the consideration
of Picked City Council
Tony Prevedel, P.Eng.
Chief Administrative Officer
ATTACHMENT #~TO REPORT #_L4:~ 1-10
THE CORPORATION OF THE CITY OF PICKERING
115
BY-LAW NO. XXXX/10
Being a By-law of The Corporation of the City of Pickering to
Establish the 2010 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. 12-2010 to
establish tax ratios and By-law No. 10-2010 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. 11-2010 to set and levy rates of taxation for Regional Solid
Waste Management and By-law No. 09-2010 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. 7014/10) 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 2010.
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF
PICKERING HEREBY ENACTS AS FOLLOWS:
1. For the year 2010, 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. 7043/10 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
i 16
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 2010.
4. The 2010 final tax calculations for the industrial, commercial and multi-residential realty tax
classes is based on a freeze date of May 27, 2010.
5. The 2010 taxes owed for the commercial, industrial and multi-residential assessed
properties shall be due in one instalment on October 15, 2010, or as adjusted by the
Treasurer.
6. 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.
7. 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.
8. Taxes shall be payable to the Treasurer, City of Pickering.
9. 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 21 St day of June 2010.
David Ryan, Mayor
Debbie Shields, City Clerk