3. MOTION – FARM GRANT PROGRAM

motion – PROGRAMME DE SUBVENTIONS AUX AGRICULTEURS

COMMITTEE RECOMMENDATION

That Council direct staff to implement a Farm Grant Program as outlined in the Chief Corporate Services Officer’s memo dated 10 May 2006.

Recommandation du comitÉ

Que le Conseil municipal charge le personnel de mettre en œuvre un programme de subventions aux agriculteurs du type proposé par le chef des Services généraux dans sa note de service du 10 mai 2006.

Documentation

1. Agriculture and Rural Affairs Committee report dated 18 May 2006 (ACS2006-CCS-ARA-0001).

2. Extract of Draft Minutes 26, Agriculture and Rural Affairs Committee meeting of May 11, 2006.

Report to/Rapport au:

Council / Conseil

18 May 2006 / le 18 mai 2006

Submitted by/Soumis par: Agriculture and Rural Affairs Committee
Comité de l’agriculture et des questions rurales

Contact/personne-ressource : Diane Blais, Coordinator / Coordonnatrice

580-2424, ext. 28091, diane.blais@ottawa.ca

Ref N°: ACS2006-CCS-ARA-0001

SUBJECT:	MOTION – FARM GRANT PROGRAM
OBJET:	motion – PROGRAMME DE SUBVENTIONS AUX AGRICULTEURS

REPORT RECOMMENDATION

That the Agriculture and Rural Affairs Committee recommend Council direct staff to implement a Farm Grant Program as outlined in the Chief Corporate Services Officer’s memo dated 10 May 2006.

RECOMMANDATION DU RAPPORT

Que le Comité de l'agriculture et des questions rurales recommande au Conseil de chargé le personnel de mettre en œuvre un programme de subventions aux agriculteurs du type proposé par le chef des Services généraux dans sa note de service du 10 mai 2006.

BACKGROUND

At its May 11, 2006 meeting, the Agriculture and Rural Affairs Committee considered and unanimously approved the above-noted motion following receipt of a memo from the Chief Corporate Services Officer dated 10 May 2006 with respect to a Farm Grant Program.

SUPPORTING DOCUMENTATION

Document 1 - Memo from the Chief Corporate Services Officer dated 10 May 2006

M E M O / N O T E D E S E R V I C E

To / Destinataire	Rob Jellett, Chair, Agriculture and Rural Affairs Committee	File/N° de fichier: File Number
From / Expéditeur	Greg Geddes, Chief Corporate Services Officer
Subject / Objet	Farm Grant Program	Date: May 10, 2006

In order to provide financial relief to working farmers, the Agriculture and Rural Affairs Committee can consider the deferral of the payment of the final tax bill for those property owners who are active farmers. The most effective and least costly way to do this is to offer working farmers a grant.

Because the final tax due date is June 22, 2006, the production of the final tax bill is already well underway. It is not possible to suppress the final tax bills for farmers without adversely affecting the final billing for all property owners. Since the final tax billing process cannot be interrupted without incurring additional costs, farmers will receive the final tax bill with a due date of June 22, 2006 along with the rest of the City’s taxpayers. If Committee and Council wish to offer working farmers more flexibility for the payment of their property taxes, staff would propose providing working farmers with a grant that will have the effect of deferring the payment of property taxes until December 7, 2006. A City grant program will cover the interest and penalties that will necessarily continue to accrue.

Although staff is aware that this kind of grant program is somewhat unwieldy and not ideal, provincial legislation and other practicalities leave us very little choice. Under section 107 (1) of the Municipal Act a municipality is permitted to give “… to any person, group or body …” a grant “ … for any purpose that council considers to be in the interests of the municipality.” The Homeowner Grant Program provided to residential property owners in 2003 was permitted under this section of the Act.

A Farm Grant Program would work like this:

• Final tax bills sent to all property owners in late May as originally planned with June 22 due date;
• Council approves a Farm Grant Program;
• Revenue Division sends a letter to eligible farmers informing them of the Council approved Farm Grant Program and the extended due date of December 7, 2006;
• Penalty continues to accumulate on unpaid tax accounts;
• Eligible farm property owners pay their 2006 final tax bill by December 7, 2006 including the penalty;
• After December 7, 2006 the Revenue Division reviews all eligible farm property accounts and sends cheques to eligible farm property owners to cover penalty paid from original final tax due date to the extended final due date for farm property owners.

Committee and Council need to be aware that the Municipal Act, under section 106 (1), does not permit the provision of assistance to a commercial enterprise. The Farm Grant Program cannot apply to any farm property owned by a commercial enterprise. Therefore, staff proposes the following eligibility criteria for inclusion in the Farm Grant Program:

• Any tax bill that includes farm assessment (not owned by a commercial enterprise);
• Taxes would have to be up-to-date before the final due date (i.e. balance of account is zero before June 22, 2006); and
• The final tax bill as mailed in May 2006 would have to be paid by the revised farm final due date of December 7, 2006 plus outstanding penalty.

Since farmers do not own all properties operated as farms, Council should be aware of the following situations:

• Farmers who rent or lease property for farming purposes will not receive a grant cheque for rented or leased property;
• Property owners (non-commercial) who rent or lease property to a farmer will receive a grant cheque for rented or leased property; and
• Property owned by developers (who are not an obvious commercial enterprise) will receive a grant cheque.

If Council accepts this proposal, the cost of the Program is estimated to be $235,000 of which $210,000 is the expected cost of penalty incurred during the period. The remaining $25,000 is for printing, mailing and staff costs. In order not to impact the 2006 budget, increasing the penalty and interest on taxes account by $210,000 to cover the cost of the direct grant will fund the program. As the grant is basically a reimbursement of penalty paid by this group, the only remaining cost relate to the administration of the program. The additional administrative costs would have to be funded from a one-time transfer from the City Wide Reserve of $25,000.

For further information please direct questions to Ken Hughes, Manager of Revenue at extension 13485.

Author

Author’s Initials Prepared by Initials

cc: Mayor and Members of Council
City Manager
Deputy City Managers

FARM GRANT PROGRAM

Moved by Councillor G. Brooks

That the Agriculture and Rural Affairs Committee approve the addition of this item for consideration by the Committee at today’s meeting, pursuant to Section 81(3) of the Procedure By-law (being By-law No. 2005-431).

CARRIED

Chair Jellett noted that a memo on this topic had been circulated to Committee members from Mr. G. Geddes, Chief Corporate Services Officer.

Ms. M. Simulik, Director of Financial Services & City Treasurer, spoke to the Chief Corporate Services Officer’s memo and responded to questions from Committee members. The following summarizes the main points raised:

• The intent is to provide some relief to farmers to allow them to defer paying their taxes by the June 22 due date.

• There are approximately 4,000 accounts with farm class assessments.

• Should Committee and Council adopt the Farm Grant Program, staff would send out letters to all affected property owners advising them of the program and explaining why it is being implemented and how it will work.

• The City must maintain the integrity of the tax system by not changing payment due dates and not allowing different rules for different classes.

• The cost of the program is estimated at $235,000 but that the City would be collecting $210,000 in penalties. Therefore the true cost of the program would be $25,000, which staff is recommending be transferred from the City-wide reserve into the 2006 budget as a one-time item.

• Should Committee and Council wish to provide relief for farmers on an annual basis, staff would have to look at other options and report back with respect to what can and what cannot be done under current legislation.

Following a brief discussion with respect to provided assistance to farmers beyond 2006, Chair Jellett directed staff to look at options for a longer term solution to address the fact that the City taxes farmers before they actually receive their income for the year.

In closing, Ms. Simulik noted that the rules and criteria for a grant program were outlined in the Chief Corporate Services Officer’s memo dated May 10, 2006. Therefore, she recommended that Committee simply adopt the Farm Grant Program as outlined in the memo.

Moved by Councillor G. Brooks

That the Agriculture and Rural Affairs Committee and Council direct staff to implement a Farm Grant Program as outlined in the Chief Corporate Services Officer’s memo dated 10 May 2006.

CARRIED