Report Template

3. 2007 interim property tax rates and due dates

taux d’imposition foncière provisoires pour 2007 et échéances

Committee Recommendations

That Council approve:

1. That the 2007 interim property tax billing be set at 50% of the 2006 Adjusted Annualized Taxation as permitted by legislation;

2. That the amount protected classes are billed on the interim tax billing be set at the maximum percent of last years' adjusted taxation, as permitted by legislation (50% of the adjusted 2006 taxes);

3. That the following tax due dates be approved for 2007:

i. Interim: March 15, 2007

ii. Final: June 21, 2007; and

4. That the penalty and interest percentage charge on overdue and unpaid tax arrears remain at the rate of 1.25% per month (15% per year) unchanged from 2006.

Recommandations du comité

Que le Conseil approuve :

1. que la facture provisoire des taxes foncières pour 2007 soit établie à 50 % de la taxation annuelle rajustée de 2006, comme l’autorise la loi ;

2. que le montant de la facture d'impôt provisoire des groupes protégés soit établi au pourcentage maximum des impôts rajustés des dernières années, comme il est permis par la loi (50 % des impôts rajustés de 2006) ;

3. que les dates d'échéance des impôts suivantes soient approuvées pour 2007:

i. Provisoire : le 15 mars 2007

ii. Finale : le 21 juin 2007 ; et

4. que le taux de pénalité et d'intérêt facturé sur les impôts impayés et les arriérés d'impôts demeure au taux de 1,25 % par mois (15 % par année), inchangé par rapport à 2006.

Documentation

1. Chief Corporate Services Officer's report dated 16 January 2007 (ACS2007-CRS-FIN-0002).

2. Extract of Draft Minute, 16 January 2007.

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

16 January 2007 / le 16 janvier2007

Submitted by/Soumis par : Greg Geddes, Chief Corporate Services Officer/

Chef des Services généraux

Contact Person/Personne ressource : Ken Hughes, Manager of Revenue/Gestionnaire, Recettes

Financial Services/Services financiers

(613) 580-2424 x 13485, Ken.Hughes@ottawa.ca

City Wide

Ref N°:ACS2007-CRS-FIN-0002

SUBJECT:	2007 INTERIM PROPERTY TAX RATES AND DUE DATEs

OBJET :	taux d'imposition fonciÈre provisoires pour 2007 et ÉchÉances

REPORT RECOMMENDATIONS

That the Corporate Services and Economic Development Committee recommend Council approve:

1. That the 2007 interim property tax billing be set at 50% of the 2006 Adjusted Annualized Taxation as permitted by legislation;

3. That the following tax due dates be approved for 2007:

i. Interim: March 15, 2007

ii. Final: June 21, 2007; and

4. That the penalty and interest percentage charge on overdue and unpaid tax arrears remain at the rate of 1.25% per month (15% per year) unchanged from 2006.

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil d'approuver :

1. que la facture provisoire des taxes foncières pour 2007 soit établie à 50 % de la taxation annuelle rajustée de 2006, comme l’autorise la loi ;

3. que les dates d'échéance des impôts suivantes soient approuvées pour 2007:

i. Provisoire : le 15 mars 2007

ii. Finale : le 21 juin 2007 ; et

4. que le taux de pénalité et d'intérêt facturé sur les impôts impayés et les arriérés d'impôts demeure au taux de 1,25 % par mois (15 % par année), inchangé par rapport à 2006.

BACKGROUND

Sections 342, 343 and 345 of the Municipal Act require that tax due dates, penalty and service charges are approved by City Council.

Recommendation 1 and 2

Section 317 of the Municipal Act requires Council to establish a by-law which sets interim tax billing for uncapped classes (residential and pipeline) and capped classes (commercial, industrial and multi-residential). The amount raised by the interim bill cannot exceed 50% of last year's adjusted annualized taxation.

Recommendation 3

The Municipal Act requires that Council set tax due dates. The recommended due dates are March 15, 2007 for the interim (50% of 2006 adjusted annualized taxes) and June 21, 2007 for the final (balance of 2007 taxes). This is consistent with last year.

Recommendation 4

The Municipal Act requires that Council set interest and penalty rates. These rates are consistent with 2006.

CONSULTATION

Not required. Due dates will be advertised.

FINANCIAL IMPLICATIONS

There is no impact on the budget if the recommendations in this report are accepted. If City Council were to delay the tax due dates, the impact is approximately $2,500,000 per month.

SUPPORTING DOCUMENTATION

Attachment 1 - By-Law to set the instalment due dates and interest and penalty rates applicable to the collection of property taxes for 2007.

DISPOSITION

Originating Department to take appropriate action.

ATTACHMENT 1

BY-LAW NO. 2007-

A by-law of the City of Ottawa to set the instalment due dates and the interest and penalty rates applicable to the collection of property taxes for 2007.

The Council of the City of Ottawa enacts as follows:

1. In this by-law;

“Treasurer” means the City Treasurer or the Manager of Revenue of the Financial Services Branch of the Department of Corporate Services of the City of Ottawa.

2. The instalment due date for all real property interim taxes is March 15, 2007.

3. The instalment due date for all real property final taxes is June 21, 2007.

4. The Treasurer is hereby authorized to accept part payment from time to time on account of any taxes due pursuant to Sections 2 and 3 and to give a receipt for such part payment.

5. The acceptance of any part payment pursuant to Section 4 shall not affect the collection of any percentage charge imposed and collectable under Sections 7 and 8 in respect of non-payment of any taxes or class of taxes or of any instalments thereof.

6. Payments received by mail are deemed to be paid on the date of receipt of the payment by the City not the date of the postmark of the payment.

7. In default of payment of the full amount of any instalment of real property taxes by the due dates set out in Sections 2 and 3, a percentage charge of one and one-quarter percent (1 ¼ %) is hereby imposed as a penalty of non-payment and may be added to any taxes or any instalment of part thereof remaining unpaid at the due date and shall be added on the first day of each calendar month thereafter in which the default continues but not after December 31, 2007.

8. The Treasurer shall add to the amount of the taxes due and unpaid interest at the rate of one and one-quarter percent (1 ¼ %) per month for each month or fraction thereof from the 31^st day of December in the year in which the taxes were levied until the taxes are paid.

9. Nothing contained herein shall prevent the Treasurer 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.

ENACTED AND PASSED this day of , 2007.

CITY CLERK MAYOR

2007 interim property tax rates and due dates

taux d’imposition foncière provisoires pour 2007
et échéances

ACS2007-CRS-FIN-0002 city-wide / À l’Échelle de la ville

Councillor Deans referenced the due dates as recommended in the report, particularly the final due date. She believed the later the due date, the more it cost the municipality. She recalled that in other years, Council had moved up the final due date as early as March or April. Therefore, she wondered why the proposed due date for the final bill was almost the end of June, if it could be moved up, and how much the City would save should Council decide to do so. Ms. M. Simulik, Director of Financial Services, advised that staff tries to be consistent by always setting the due date as the third Thursday in June. She indicated that moving the date up would generate approximately $150,000.00 per week in revenue in terms of interest income. She did not believe that moving it up would be a problem since there was no re-assessment this year, and that Council would be setting its budget early, giving staff more time to come forward with a tax policy report. She suggested leaving it as was proposed in the report and, should there be a willingness on Council’s part to move the date up, staff could come back with a report later in the year to adjust the final due date.

Councillor Deans asked what the earliest final due date had been since amalgamation. Mr. K. Hughes, Manager of Revenue, believed the earliest had been June 15^th or 16^th. He said he recalled discussions in previous years with respect to moving the date up and with respect to moving it to the end of the month. However, he did not remember Council voting to move up the due date, though he advised that he could verify and confirm this information.

Responding to further questions from Councillor Deans, Mr. Hughes confirmed that moving the final due date up by one month would save $600,000. In terms of process, Ms. Simulik advised that it is not unusual to adjust the final due date. If unable to meet the due date, staff brings the issue forward for amendment through the tax policy report. Furthermore, she submitted that by February 7, staff would have a good indication of whether or not it can be moved and could form part of the budget discussions.

Councillor Bloess indicated he received complaints from seniors about the due date being too early because they did not receive their pension cheques until the end of the month. He raised the possibility of accepting cheques post-dated to the end of the month, and he discussed the interest rate charged by the City, noting that all other interest rates had gone down in recent years, yet the City’s rate had remained the same. Ms. Simulik informed Committee that all Ontario municipalities charged 1.25% interest, noting it was simple interest, and not compounded. She indicated Council had the power to lower the interest rate, but that this would require an adjustment to the budget. With respect to the seniors’ issue raised by the Councillor, she maintained the City had to treat all taxpayers equally and she suggesting encouraging seniors to take advantage of the pre-authorized payment option, which spreads out their tax bill over 10 months.

Responding to further comments from Councillor Bloess, Mr. Hughes advised that the City had been successful in promoting the pre-authorized plan and had seen growth of 20% to 25% per year. He explained that in addition to allowing taxpayers to pay over 10 months, the plan also allowed them to choose whether they want their withdrawals to happen on the first or the fifteenth of the month. He said that in his experience, there is no specific date that meets everyone’s needs.

Councillors El-Chantiry, Wilkinson, Brooks and Mayor O’Brien all spoke in support of setting a firm due date and being consistent on a yearly basis so that taxpayers would know what to expect, and be able to budget accordingly.

Responding to questions from Councillor Hume, staff advised that approximately 60% of tax accounts were being paid through electronic means; either on-line, through mortgages and financial institutions, or through the pre-authorized plan. Ms. Simulik indicated the tax policy report would typically come forward in April, though this year it may come as early as March because Council was dealing with the budget in February.

Councillor Desroches felt it was important to offer as many options as possible for taxpayers to pay their bills and he inquired as to the various modern means offered by the City in that regard. Mr. Hughes indicated the City did not accept credit cards because the the charge levied would create a further budget pressure. However, he maintained there were multiple means available to taxpayers, as noted above. He also noted that staff had looked at every efficiency on both the billing side and the payment side.

That the Corporate Services and Economic Development Committee recommend Council approve:

1. That the 2007 interim property tax billing be set at 50% of the 2006 Adjusted Annualized Taxation as permitted by legislation;

3. That the following tax due dates be approved for 2007:

i. Interim: March 15, 2007

ii. Final: June 21, 2007; and

4. That the penalty and interest percentage charge on overdue and unpaid tax arrears remain at the rate of 1.25% per month (15% per year) unchanged from 2006.

CARRIED