May 13, 1999

To:Corporate Services Committee

From:Chief Financial Officer & Treasurer

Subject:Tax Adjustments - Municipal Act, Sections 442 & 443

Purpose:

To recommend the approval of the cancellation, reduction or refund of taxes pursuant to the provisions of sections 442 and 443of the Municipal Act.

Financial Implications:

This report recommends cancellation of taxes in the amount of $2,549,597.92 as summarized in Schedules "A" and "B" attached. The City's share of this total tax reduction is $1,709,145.50. Funding of this deficiency is provided for in the 1999 operating budget. The balance of the tax cancellation is to be recovered from the school boards.

Recommendation:

It is recommended that:

(1) the individual appeal applications made pursuant to Section 442 of the Municipal Act totalling $2,408,267.43, as summarized in Schedule "A", be approved;

(2) the individual appeal applications made pursuant to Section 443 of the Municipal Act totalling $141,330.49, as summarized in Schedule "B", be approved.

Discussion:

City Council, at its meeting held on December 16, 1998 adopted a report that among other things, authorized the Corporate Services Committee to hear and make recommendations on tax appeals other than poverty appeals, pursuant to Sections 442 and 443 of the Municipal Act. With respect to poverty appeals, the Assessment Review Board will hear and dispose of applications.

Section 442 of the Municipal Act allows Council to cancel, reduce or refund taxes levied for the following reasons:

(a) property that has ceased to be liable to be taxed at the rate it was taxed on the returned roll;

(b) property became exempt from taxation;

(c) property razed by fire or demolished;

(d) mobile unit that has been removed from the municipality during the year;

(e) taxpayer unable to pay taxes due to sickness or extreme poverty;

(f) overcharged by gross or manifest clerical error; or

(g) property could not be used for at least three months due to repairs or renovations.

Section 443 of the Municipal Act allows Council to make decisions relating to errors of fact on supplementary and omitted assessments. This section permits correction of these types of errors for the current and previous two years.

As applications for cancellation of taxes are received, Finance staff forward the applications to the Ontario Property Assessment Corporation (OPAC) for review. Upon receiving comments from OPAC, the Finance Department prepares its recommendation, calculates the tax cancellation, advises the applicant of the tax amount to be cancelled, and schedules hearings before the Corporate Services Committee if required. Within twenty one days after a decision is rendered by the Corporate Services Committee, the City issues notices of decision to the applicants and processes the tax adjustments accordingly. The twenty one day period allows the applicant the right to appeal the decision to the Assessment Review Board.

The total cancellation or refund of taxes under Section 442 of the Municipal Act as recommended in this report is $2,408,267.43. The total cancellation or refund of taxes under Section 443 of the Municipal Act as recommended in this report is $141,330.49. Approximately $1,478,000 will be recovered from the school boards.

Schedules "A" and "B" summarize by category the number of applications and tax dollars recommended for adjustment. A detailed list is available through the Finance Department upon request.

Contact Names:

Giuliana Carbone, 392-8065

Margo L. Brunning, 395-6789

W. A. Liczyk

Chief Financial Officer & Treasurer

Attachment

ADJUSTMENT OF TAXES

PURSUANT TO SECTION 442 OF THE MUNICIPAL ACT

S C H E D U L E "A"

ADJUSTMENT OF TAXES

PURSUANT TO SECTION 443 OF THE MUNICIPAL ACT

S C H E D U L E "B"