March 23, 1998

To: Corporate Services Committee

From: Chief Financial Officer and Treasurer

Subject: PROPERTY TAX BILL DESIGN AND CONTENT

Purpose:

This report outlines the design of the new property tax bill which will be sent to all taxpayers in early June of this year. It will also address the regulatory requirements outlining what shall or shall not appear on a tax bill in accordance with Bill 164.

Funding for the design, printing and mailing of the tax bills have been budgeted for in the operating budget. The financial implications in any delays in the approval of the final bill design are substantial considering the City will bill more than $2.5 billion on the final tax bill.

Recommendations:

It is recommended that:

1. Council approve the the attached tax bill design and content. Please note that the attached tax bill has been reduced to approximately 7" X 14" and the actual bill will be 7" X 17"; and

2. Any message or communication that Council deems necessary be included in a separate brochure and/or mailing envelope.

With the amalgamation of the former municipalities, the implementation of a new property tax software system, a new assessment system and Bill 164, a new tax bill has been designed. The new tax bill takes into consideration the new legislated requirements including those set out in Bill 164. The Bill (Tax Credits to Create Jobs Act) received Royal Accent on December 18, 1997 with the section pertaining to the information permitted on property tax bills effective January 1, 1998.

The Act authorizes the Minister to prescribe what mandatory information is required to appear on a tax bill. It goes on to state that, where the Minister has approved the form of the notice (i.e. tax bill), a municipality shall not include other information on a tax bill unless expressly authorized to do so by the Minister. Information which is included with the accompanying tax bill, such as a brochure, is not subject to the legislation and Council may state what it wishes. As part of the regular final tax bill mailing, there is usually an accompanying brochure which incorporates communication from Council it deems necessary to all its taxpayers.

Council at it=s meeting held on February 12, 1998, passed a motion that the final tax bill include a separate line item entitled ANew Mike Harris Property Tax@. If the Minister was to exercise his power to the fullest, then this would likely not be permitted on the actual tax bill, but it can be placed on the accompanying brochure previously mentioned, if Council so wishes. To date, no regulations have been filed by the Minister and Ministry staff advise that regulations in this respect are not expected at this time. The risk of placing it on the tax bill, in possible contravention of the regulations, is that the tax bill may not be legally considered a tax bill and therefore our statutory lien may not be valid.

When the regulations are passed, they may be retroactive to January 1st, which may put the Treasurer in a legal dilemma because of her statutory duties as Tax Collector. Under the Municipal Act, the Tax Collector is required to levy and collect taxes as set out in the legislation. The Tax Collector also collects for the school boards and they are required, under legislation, to be paid a specific amount by a specific date. If the Treasurer/Tax Collector can not fulfill her duties in the collection of taxes, the issue of liability needs to be addressed.

We have spoken to the City Solicitor on the issue of not conforming to Bill 164 and they concur with the legal ramifications identified above regarding the legal status of the tax bill.

An early resolution by Council on the design and content of the tax bill is important so that the final tax bills can be mailed in early June. There is a significant amount of lead time required for computer programming, printing preparation, and other related steps in the bill production and mailing. Any delays will result in reduced cash flow in June and an associated loss in investment income.

Conclusions:

It is our intention to mail out its tax bills in early June in order to meet our financial commitments. It is necessary to finalize the bill design and content now, to enable the work to be completed to meet this objective. Any delay in the design or its conformity to the existing legislation will have serious consequences on our cash flow. The liability issue as its pertains to the Treasurer/Tax Collector and her statutory duties needs to be addressed if Council instructions do not comply with the legislation.

Contact Name:

Ed DeSousa Audrey Birt

Phone: 397-4226 392-7820

Fax: 392-3649 392-0364

W. A. Liczyk,

Chief Financial Officer and Treasurer