Protection of the City=s Tax Base
The Corporate Services Committee reports having requested the Chief Financial Officer and Treasurer to report
directly to Council, for its meeting scheduled to be held on June 3, 1998, on the number of cases under appeal, the
dollar value involved, and an interim action plan as to how City Council can deal with these appeals.
The Corporate Services Committee submits the following report (April 16, 1998) from the Chief Financial Officer and
Treasurer:
Purpose:
This report outlines the initiatives that will be investigated to protect the property tax base.
Source of Funds/Financial Implications:
There is no funding required.
Recommendation:
It is recommended that this report be received for information and that a full report on this program, be brought back to Council by
September 1998.
Council Reference/Background/History:
At its meeting held on March 4, 5, and 6, 1998, Council passed a motion that the Chief Financial Officer and Treasurer report to
the Corporate Services Committee on how to protect the City=s tax base due to the School Board not continuing to pursue action
to fight certain tax appeals.
The Toronto District School Board was involved in the fighting of specific appeals where it felt the assessment allocated to the
property was defendable. The School Board used an outside tax agent and lawyers to represent them on certain outstanding
appeals. Due to the change in funding of education effective January 1, 1998, the School Board is no longer directly impacted by
the outcome of appeals.
The former City of Toronto has been and is actively involved in certain appeals which coincide, in some cases to those properties
the School Board was also involved. The former municipalities were not aggressive in defending assessment appeals.
Comments:
The practice of defending the City=s tax base varied across the former municipalities and we are in the process of developing a
new strategy to defend the City=s tax base. The strategy will involve ensuring that assessments represent the property=s fair share
of taxes. This will be accomplished by reviewing assessment appeals and deciding which ones to challenge at the Assessment
Review Board or which ones to accept. We have generally found that more analysis needs to be done in order to methodically
protect the tax base from being eroded and unfortunately, the Province does not seem have the resources to do so.
Part of the strategy will involve identifying new assessments for properties in which new tenants have moved in to vacant properties
or a portion of properties, especially when it comes to commercial and industrial properties. This can be done in conjunction with
staff such as utility meter readers, building inspection staff, business licensing groups, etc. It will mean a close link with building staff
to ensure any new construction, renovations, additions, etc. are quickly brought to the attention of the Assessment Office in order to
be reflected in revised assessment amounts. We have generally found that the new or revised assessment numbers are not reflected
on the assessment rolls or on a supplementary billing as quickly as we would prefer.
We will be drafting a Request for Information (RFI) to find out who can provide which specific services and at what cost to the
City. The various bodies will include the Province, School Board and any private organizations.
We will also be looking at the feasibility of reorganizing our own internal staff resources to expand an assessment/appeals section
which will deal with this very issue. It is envisioned that a group of staff could be dedicated and experienced in methodically
determining whether assessments accurately reflect the value of the property and whether the City should accept, defend or
increase assessments when they are appealed. This group would consist of about three or four individuals dedicated to protecting
the City=s tax base and where the cost/benefit is easily defendable. The group would pay for itself on an annual basis by finding
new assessments and defending existing assessments. A performance measurement system would ensure that stated targets are
achieved annually. The group would also act in the capacity of doing spot analysis to ensure the accuracy of assessments and find
areas where there are inconsistencies.
The Province has stated that municipalities will be responsible for the assessment function through the new Ontario Assessment
Corporation. The role that the City will play in ensuring that its best interests are protected is unclear at this point in time. In the
meantime, we need to ensure that we have a plan that will address our concerns.
Conclusions:
There will be a complete investigation of the most cost-effective method in protecting the tax base in the near future and we will
report back by September 1998 on the best way to protect the City=s interest.
Contact Name:
Ed DeSousa
Phone:397-4226
Fax:392-3649
Mr. David Powell and Ms. Carla Nell, Representatives of the Municipal Tax Equity Consultant, appeared before the Corporate
Services Committee in connection with the foregoing matter.