December 3, 1998
To:Strategic Policies and Properties Committee
From:Wanda A. Liczyk
Chief Financial Officer & Treasurer
Subject:1999 Interim Levy By-law
Purpose:
To provide for the levy and collection of 1999 interim realty taxes.
Financial Implications:
The approval of the by-law will provide for the cash requirements of the City until the final 1999 operating budget is
approved by Council in April 1999.
Recommendation:
Authority be granted for the introduction of a bill in Council substantially in the form of the draft by-law attached as
Appendix hereto, providing for an interim tax levy in the amount permitted by statute, prior to the adoption of the
estimates for 1999.
Discussion:
Section 370 of the Municipal Act, as amended (the "Act"), provides that a municipal council may pass a by-law, prior to
the adoption of the estimates, to levy interim taxes for 1999. Similarly, section 447.30 of the Act provides that a
municipal council may pass a by-law levying interim taxes for 1999, prior to the adoption of the estimates, on any
property classes for which the municipal council adopted the 2.5% cap on tax increases for 1998, 1999, and 2000.
The 1999 interim rates as reported in the attached by-law will generate no more than 50% or less of the total 1998 revenue
by property class, and are in the same proportion to one another as the tax ratios established by City Council in July, 1998.
The 1999 interim taxes for the capped commercial, industrial and multi-residential property classes are levied by applying
50% of the adjusted 1997 mill rates to the assessment in the frozen assessment listing. Adjustments are made to account
for the phase-in program (residential) and the 2.5% cap (commercial, industrial and multi-residential) adopted by City
Council in July, 1998. Additional funds will be raised by provincial transfer payments, user fees, internal revenues
sources and, if necessary, temporary borrowing.
The draft by-law attached hereto as Appendix "A" has been prepared in accordance with the foregoing and in accordance
with the Act, as amended by Bill 79.
Bill 79 (the Fairness for Property Taxpayers Act, 1998), if enacted, will provide the authority to adjust the 1999 interim
levy to account for the phase-in and capping programs adopted by Council in July, 1998.
The following two additional issues also affect the enactment of the interim levy by-law:
3:While Bill 79 specifically excludes the City of Toronto from the 10-5-5 capping provisions, as it currently reads, it also
prohibits the council of any municipality (including the City of Toronto) from passing an interim levy by-law prior to
January of 1999.
4:Section 447.21 of the Act appears to require the council of a municipality to levy the full 1999 levy on the
multi-residential property class in the interim levy by-law, where the multi-residential property class is subject to the 2.5%
cap.
Staff have been informed by Ministry sources that both issues are to be resolved by way of amendment to Bill 79 before
third reading in early December 1998.
Bill 79 is scheduled to receive Royal Assent during the week of December 7, 1998. Provided the above-mentioned issues
are resolved by amendment, and Bill 79 is enacted on schedule, City Council can enact a 1999 interim levy by-law, in
substantially the form attached, at its meeting of December 16, 1998.
Conclusion:
The interim levy by-law will provide for the cash requirements of the City until the 1999 operating budget is approved by
Council by March 1999. Council's authority to enact the by-law at its next meeting, in substantially the form attached, is
dependant upon Bill 79 being amended and enacted prior to City Council's meeting of December 16, 1998.
Contact
Giuliana Carbone
Director of Revenue Services
(416) 392-8065
Wanda A. Liczyk
Chief Financial Officer & Treasurer
Attachment
N:workgroup/finmetrofin/reports/99interim
