Write-Off of Uncollectible Business Taxes and Water

Charges from the Collectors Roll

The Strategic Policies and Priorities Committee recommends the adoption of the following report (December 1, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

This report addresses the uncollectible business taxes still on the Tax Collector's Roll. These business taxes can be struck from the Tax Collector's Roll under the provisions of the Section 441 of the Municipal Act, R.S.O. 1990. The Section 441 process differs from other tax related adjustments because only Council can approve the write-offs being removed from the Roll and does not include cancellation of taxes due to assessment appeals (i.e. the Section 40 process).

Financial Implications:

The amount of business taxes that require removal from the Tax Collector's role is $7,375,419.29 plus $19,390.93 attributable to business improvement areas (BIA). Approximately $3,097,000.00 of this amount is the City's share. Provision for the City's share has been made in the 1998 budget. The balance of approximately $4,278,500.00 is the School Board's share and will be recovered. This adjustment brings the total write-off for 1998 to $19,212,684.20.

The BIA total amount of $19,390.93 includes $19,330.59 and $60.34 for BIA's for the former City of Toronto and Scarborough, respectively. This is offset by an allowance amount set aside for this purpose as part of the BIA levy and does not have an impact to the city. A breakdown of the recommended strike-off is in Schedule 'A' is attached. In addition, the amount of $190,714.13 in water charges requires write-off. A breakdown of the relevant District's area distribution is outlined in Schedule 'B' attached.

The comparable 1997 tax write-off was $19,395,009.80. The comparable 1997 water write-off was $249,140.78

Recommendations:

It is recommended that:

(1)Council resolve to cancel the uncollectible business taxes of $ 7,375,419.29 and strike them from the Tax Collector's Roll under the provisions of Section 441 of the Municipal Act,

(2)the amount attributable to uncollectible taxes from Business Improvement Areas (BIA) in the amount of $19,330.59 and $60.34 be written off as a receivable under Section 441; and

(3)the amount attributable to uncollectible water charges in the amount of $190,714.13 be written off as a receivable under Section 441.

Background:

All accounts have gone through our collection process. This process includes some or all Overdue Statements, Final Demand Letters, Bailiff Warrants and investigations, Collection Agency action and Legal action. In certain cases, payment arrangements were entered into between the taxpayers and the City. Unfortunately, due to Bankruptcies and business closures, we were unable to collect all of the total outstanding amounts. These business taxes are uncollectible in accordance with Section 441 of the Municipal Act.

Conclusion:

The list of uncollectible business taxes has been reviewed and edited by the Tax Collector for each area district. All appropriate collection action has been performed and the Treasurer has ascertained the taxes to be uncollectible. It is recommended that Council cancel the uncollectible business taxes and strike them off from the Tax Collector's Roll.

Contact Names:

Margo L. Brunning, Manager, Collections/Receivables, Payments and Regional Customer Service,

Phone: 395-6789, Fax: 395-6703, e-mail: mbrunnin@city.toronto.on.ca;

G. Carbone, Director, Revenue Services Division, Phone: 392-8065, Fax: 397-5236, e-mail: gcarbone@city.toronto.on.ca