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TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on July 21 and 23, 1998

STRATEGIC POLICIES AND PRIORITIES COMMITTEE

REPORT No. 13



1Residential Property Class - Phase-In Policy

2Multi-Residential Property Class -Tax Policy Options

3Property Tax Relief for Low-Income Senior sand Disabled Persons

4Commercial and Industrial Property - Tax Policy Options

5Property Tax Rebates for Charitable and Similar Organizations

6Tax Shifts - Effect of Changes to Transition Ratios

7Other Item Considered by the Committee



City of Toronto

REPORT No. 13

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on July 14, 1998,

submitted by Mayor Mel Lastman , Chair)

As Considered by

The Council of the City of Toronto

at its Special Meeting

on July 21 and 23, 1998

1

Residential Property Class - Phase-In Policy

(City Council at its Special Meeting on July 21 and 23, 1998, adopted the following recommendations:

"It is recommended that:

(1)the report (undated) from Mayor Lastman, entitled 'Residential Property Class- A Compromise Proposal', embodying the following recommendation, be adopted:

'It is recommended that, in order to allow individuals time to adjust their financial affairs, the increases and decreases related to property tax reform with respect to residential property tax reform be phased-in over a five-year period in combination with an annual minimum payment of $300.00 for tax increases and an annual minimum payment of $200.00 for tax decreases.';

(2)an arm's length municipal office be set up immediately to help the City's taxpayers to appeal their property tax assessment;

(3)the Assessment and Tax Policy Task Force be instructed to work towards a recommendation that a portion of one's property taxes be based on income;

(4)WHEREAS, the stated purpose of any proposed phase-in program is to help long-term home owners 'get used to the idea of paying more' and to prevent seniors, disabled and low or fixed-income residents from losing their homes because of inability to pay their new increased tax rates;

NOW THEREFORE BE IT RESOLVED THAT the City of Toronto Council petition the Province of Ontario to pass legislation allowing that, upon the change of ownership on or after January 1, 1999, of any residential property, any tax increase or decrease become immediately effective at its full new rate for the new owner, and excluding those changes where title passes through the death of one or more partners in a home where the title is held by a joint-tenants-in-common agreement held prior to July 1, 1998; and excluding those joint-tenants-in-common agreements where title passes from parent to child, unless the child has already reached the age of55;

(5)the Province of Ontario be requested to provide legislation to allow the phase-in for decreases in effect be for three years and the phase-in for increases be for five years with the thresholds recommended in the report from Mayor Lastman; and further that the Province be requested to provide a one-time grant in the amount of the differential between the phase-in of the increase and the decrease;

(6)the Province of Ontario be requested, for those instances where building permits are issued for changes to existing residential buildings, to implement the same procedure that is followed for non-residential buildings which is that a partial reassessment be carried out when the Province is informed of the value of the building permit, and a full assessment be carried out when the building permit is closed;

(7)Council petition the Province of Ontario for additional tax tools for setting residential property tax rates, such tools to include setting graduated tax rates such as the ones considered by the Chief Financial Officer and Treasurer for commercial and industrial taxes;

(8)Mayor Lastman be requested to write to the Minister of Finance again requesting:

(a)information respecting the Current Value Assessment (CVA) system which was originally requested by City Council at its meeting held on March 4, 5 and 6, 1998; and

(b)information previously requested in the communication dated April6,1998, from the Chief Financial Officer and Treasurer, addressed to the Assistant Deputy Minister, Office of Budget and Taxation, respecting necessary assessment information to determine assessments based on current value in current use;

(9)Council record its appreciation for the diligence and professional conduct of all City staff involved in the tax policies issues, in particular, staff of Finance, Economic Development, Legal, Housing, Information Technology, Clerk's and Chief Administrative Officer's Office; and

(10)the report dated July 23, 1998, from the Chief Financial Officer and Treasurer embodying the following recommendations, be adopted:

"It is recommended that:

(1)Council authorize the levy and collection of taxes for the 1998 taxation year, the imposition of a penalty charge for non-payment of 1998 taxes, the provision of interest to be added to tax arrears and to establish tax ratios for the year 1998;

(2)Council approve the levy of a special charge for 1998 for the following Business Improvement Areas and to provide for its collection: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St. Lawrence Neighbourhood; Upper Village and Weston;

(3)authority be granted for the introduction of the necessary bills in Council to levy taxes for the year 1998 and to provide for the collection of taxes for 1998 other than those levied under By-law No. 10-1998, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and to levy a special charge for 1998 for certain Business Improvement Areas and provide for its collection, in the form or substantially in the form of the draft by-laws attached thereto; and

(4)subject to Council adopting a residential property class phase-in program with or without a threshold; and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes, that leave be granted for the introduction of the necessary bills in Council to give effect thereto in the form or substantially in the form of the draft by-laws attached hereto.")

The Strategic Policies and Priorities Committee submits the transmittal letter (July13,1998) from the Assessment and Tax Policy Task Force, without recommendation.

The Strategic Policies and Priorities Committee reports having referred the following motions to Mayor Lastman for a report directly to City Council on July 21, 1998:

(1)"That Recommendation No. (2) be amended to read:

'(2)in considering the phase-in periods for increases and decreases related to residential property tax reform, that Council be requested to vote in order of degree with the highest phase-in placed first, such votes to include using thresholds first and not using thresholds second.'";

(2)"That Recommendation No. (2) be amended by deleting the word 'highest' and replacing it with the word 'lowest'.";

(3)"That Recommendation No. (1) be referred to Mayor Lastman for a report directly to City Council on July 21, 1998."; and

(4)"That the Chief Financial Officer and Treasurer be requested to report to the Assessment and Tax Policy Task Force on an education program/counseling service to assist people who do not fall within the recommended programs who, nevertheless have difficulty in paying their property taxes as a result of reassessment."

The Strategic Policies and Priorities Committee submits the following transmittal letter (July13, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on July, 6, 7, 11, and 13, 1998, recommended to the Strategic Policies and Priorities Committee and City Council that:

(1)in order to allow individuals time to adjust their financial affairs the increases and decreases related to property tax reform with respect to residential property tax reform be phased in over a seven and a half year period; and

(2)in considering the phase-in periods for increases and decreases related to residential property tax reform, that Council be requested to vote in the order of degree with the highest phase-in placed first, such votes to include using thresholds or not using thresholds.

The Task Force also reports having requested the Chief Financial Officer and Treasurer to report directly to Council on July 21, 998, on the following motion of Councillor Walker:

Whereas the Provincial Government is responsible for:

(i)authoring and implementing the legislation which imposed Current Value Assessment;

(ii)the assessment of all properties in Ontario;

(iii)the quality and accuracy of the assessments; and

Whereas the City of Toronto was not consulted as to the assessment of properties and had no part in designing the Current Value Assessment system; and

Whereas the City of Toronto has repeatedly requested from the Province, impact studies and verification, independent or otherwise, as to the accuracy of the assessments, to no avail; and

Whereas there are currently over 50,000 independent assessment appeals pending; and

Whereas an administration fee of $20.00 per residential appeal and $25.00 per commercial/industrial appeal is being charged by the Province to pay for the costs of these appeals; and

Whereas the City of Toronto will assume responsibility for all assessment related costs, including re-assessment, appeal, and administrative costs, after August 31, 1998;

Therefore Be It Resolved that:

(1)the City of Toronto refuse to assume any costs related to the implementation or operation of the Current Value Assessment system until the Province has carried out a study which verifies the accuracy of their assessment data; and

(2)the City of Toronto refuse to assume any costs related to the implementation or operation of the Current Value Assessment system until the assessment roll has been finalized and all appeals and re-assessments related to this year's assessments have been processed and settled by the Provincial Government.

Background:

The Assessment and Tax Policy Task Force was established by City Council at its meeting on March4, 5 and 6, 1998, when it amended and adopted Clause 2 of Report No. 3 of the Strategic Policies and Priorities Committee, titled "Process to Develop Property Tax Implementation Plan".

The Task Force met eleven times, scheduled three public meetings on April 6, 27, and July 6/7, 1998, at which approximately 120 citizens deputed. The Task Force has received approximately 210 communications from interested citizens commenting on the proposed new Ontario Fair Assessment System and taxation reforms which will affect property taxes paid by all residents and businesses throughout the City of Toronto.

The Assessment and Tax Policy Task Force had before it a report (July 2, 1998) from the Chief Financial Officer and Treasurer providing information to assist Council to develop a policy respecting the phase-in of assessment related property tax increases and decreases for the residential property class pursuant to the Fair Municipal Finance Act.

The Task Force also had before it the following communications respecting the current value assessment and the residential property class:

(a)(July 1, 1998) from Mr. Craig Nicholson;

(b)(June 30, 1998) from Mr. Dennis Choptiany, President, Lytton Park Residents' Organization;

(c)(July 2, 1998) from Ms. Oriella Reia Stillo;

(d)(July 2, 1998) from Mr. David Harrison;

(e)(July 2, 1998) from Ms. Maureen Williamson;

(f)(May 11, 1998) from Ms. Joanne Olsen;

(g)(June 29, 1998) from Dr. R.R. Tasker, MD, MA, FRCS(C), Division of Neurosurgery, Western Division, The Toronto Hospital;

(h)(July 6, 1998) from Mr. George Milbrandt;

(i)(July 3, 1998) from Mr. Olev Johanson;

(j)(July 6, 1998)from Mr. David Vallance;

(k)(July 6, 1998) from Mr. Brian Maguire, Director, North Hill District Homeowners' Association & Secretary-Treasurer of the Confederation of Resident & Ratepayers Associations;

(l)(July 6, 1998)from Mr. David Godley;

(m)(Undated) from Ms. Mary Lou Dickinson;

(n)(Undated) from Ms. Micheline Czyzykowski;

(o)(July 6, 1998) from Ms. Cindy Weiner, President, and Mr. Alex Frirdich, Member of Executive, St. Andrew's Ratepayers Association;

(p)(July 6, 1998)from Mr. Paul Siemens;

(q)(July 6, 1998) from Mr. Bill Nemerson, Member of the Seniors' Task Force;

(r)(July 6, 1998 from Mr. David Bruce;

(s)(July 8, 1998) from Mr. John Caliendo;

(t)(July 6, 1998) from Mr. Marc L. Johnson;

(u)(July 7, 1998) from Mr. David Hui & Mr. Steven K. Lam, Toronto Fair Tax Chinatown Committee;

(v)(July 8, 1998) from Ms. Judy MacAlpine;

(w)(July 2, 1998) from Ms. Leslie Dampier;

(x)(June 26, 1998) from Mr. Ben Barkow;

(y)(June 25, 1998) from Mr. Andrew Vernon-Betts; and

(z)(June 8, 1998) from Ms. Jennifer Carter.

The Task Force held public hearings on July 6, 1998, to hear from citizens on the reports from the Chief Financial Officer and Treasurer respecting Residential Property Class - Phase-In Policy, Multi-Residential Property Class - Tax Policy Options, and Property Tax Relief for Low-Income Seniors and Disabled Seniors and Disabled Persons.

The following persons addressed the Task Force on July 6, 1998:

-Mr. Dale Ritch

-Mr. David Vallance

-Mr. Michael McCarty, South Armour Heights Ratepayers' Association

-Mr. Brian Maguire

-Mr. Steve Ellis

-Mr. Sam Lewkowicz

-Mr. George Milbrandt

-Ms. Mary Janet MacDonald

-Mr. David MacAlpine

-Ms. Mary Lou Dickinson

-Mr. Paul Siemens

-Mr. Hendrick Flakierski

-Ms. Judy MacAlpine

-Mr. Alex Frirdich and Ms. Cindy Weiner, St. Andrews Ratepayers' Association

-Mr. Giovanni Mosca

-Mr. Julian Smit

-Mr. Robert Sydia

-Mr. Olev Johanson

-Mr. Frank Buttigieg

-Mr. Allan Burke, East Beach Community Association

-Mr. Harry Beatty

-Ms. Elizabeth Holder

-Mr. Howard Tessler, Federation of Metro Tenants' Association

-Mr. Barry Lyon, Lyon Consultants

-Mr. James Clare

-Mr. David Jackson

-Mrs. Toby Frankel, Jonare Frankel Holdings Ltd.

-Mr. Dan Crimi

-Mr. Tim Sheeres

-Mrs. Mun-Julee

-Dr. W.E. Goodman

-Ms. Elizabeth Dingman

-Mr. Cliff Jenkins

-Ms. Joan Milne

-Ms. Teresa DeCarvalho

-Mr. Bill McLeod

-Ms. Deborah Pomper

-Ms. Elizabeth Kimball

(Copies of the communications referred to in the transmittal letter of the Assessment and Tax Policy Task Force have been previously circulated to all Members of Council with the Assessment and Tax Policy Task Force agenda and copies thereof are on file in the office of the City Clerk.)

--------

(Report dated July 2, 1998, addressed to the

Assessment and Tax Policy Task Force

from the Chief Financial Officer and Treasurer)

Purpose:

To develop a policy respecting the phase-in of assessment related property tax increases and decreases for the residential property class pursuant to the Fair Municipal Finance Act.

Funding Source, Financial Implications and Impact Statement:

The phase-in of assessment related increases must be funded through the phase-in of decreases within the same property class. As such, there is no funding implication associated with this report. However, a shift of $15.3 million of new tax burden onto the residential class has occurred. This shift, which is not due to any budgetary changes but results from the Provincial calculation of the transition ratios, will cause an immediate non-phaseable increase of 0.0125 percent on residential property owners.

Recommendation:

Within the existing legislative framework, Council can choose a phase-in period ranging from two to eight years. Should Council elect to minimize the impact of assessment reform, the maximum eight-year phase-in is appropriate. Under this phase-in period, 88.2 percent of property owners would see an annual impact of less than $125.00.

However, given the fact that the next reassessment will be in three years hence, a phase-in period of three-years for assessment-related property tax increases and decreases for the residential property class should be considered to alleviate the confusion for the taxpayer, of carrying forward residual phase-in amounts from the 1998 reassessment while implementing the full impact of tax changes resulting from the 2001 reassessment. Under a three-year phase-in period, 65.9 per cent of property owners would see an annual impact of less than $167.00, and where 88.2 percent of property owners would see an annual impact of less than $333.00.

Council can also choose to phase-in tax changes in combination with a threshold for tax increases and decreases that would be paid in the first year of the phase-in period. Under a three year phase-in period and using a threshold for tax decreases of $200, and a threshold for tax increases of $299, 35.4 percent of property owners would receive their full tax decrease or increase in 1998. In the subsequent years of the phase-in period, 81.9 percent of property owners would see an annual impact of less than $167.00 and 94.4 percent would see an annual impact of less than $333.00.

Reference/Background:

Bill 106, by amendment to section 372 of the Municipal Act, provides for the Council of a municipality to pass a by-law in 1998 to phase-in 1998 assessment related tax increases or decreases, subject to certain requirements. First, the first year of a phase in must be in 1998 and the last year must be the 2005 taxation year or an earlier taxation year (i.e., the 1998 assessment related increase or decrease can be phased-in over a period of up to eight years). Second, the amount to be phased-in in a year, other than 1998, must be the same or less than the amount phased-in the previous year. Third, for each property class for each year, the adjustments made under the by-law must not affect the total taxes for municipal and school purposes on the land in the municipality that is in the property class and that is rateable for municipal purposes (i.e., within property classes, phase-in of increases must balance with the decreases). Finally, the by-law may provide for different phase-ins for different property classes and it may provide for no phase-in for some classes.

Should Council select any phase-in option, there will be an immediate first year impact for all properties in the residential class. Although increases and decreases are equal under any phase-in program, there will be a one time tax impact of $15.3 million for the 1998 tax year that must be absorbed by all properties in the residential class. This is due to the revised preliminary transition ratios as provided by the Province which result in a tax shift among all the property classes with some classes experiencing increases and some decreases. The creation of of a uniform Provincial residential education tax rate would have shifted approximately $119 million from the multi-residential class to the residential class. In setting the transition ratios, the Province has shifted back $104 million - which leaves $15.3 million of new tax burden on the residential class.

The ratios do not nullify the effect of a uniform tax rate completely by filling it with municipal taxes and, as mentioned above, does result in a shift of taxes onto the residential class that according to the Province, cannot be phased-in. The difference caused by this shift for the residential class is about 0.0125 percent or an immediate increase of approximately $28 for the average valued home of $220,000. Therefore, the analysis contained in the attached appendices exclude this impact.

Discussion:

With respect to phase-in policy, the decision required by Council is relatively straightforward: for each property class, a phase-in period of between one (i.e., no phase-in) and eight years must be adopted. The amount of increases phased-in must be borne by those in the same property class who are entitled to decreases. Obviously, those properties which are subject to a 1998 assessment related decrease will want the shortest phase-in period (i.e., no phase-in) in order to reduce their taxes by the full amount immediately. On the other hand, those who are subject to an assessment related increase will prefer the longest phase-in period allowed.

By choosing a phase-in period for each property class, Council must balance the needs of those who are entitled to decreases with the needs of those who may experience the financial hardship of a tax increase. As Council has no control of the amount of the 1998 assessment related increase or decrease, the only variable to work with is the phase-in period.

The final reassessment impact study indicates that 56.1 percent of residential assessment portions (300,866 portions) are to receive a property tax decrease, averaging $491.00 per portion, while 43.9percent (235,521 portions) are to receive a tax increase, averaging $692.00 per portion.

A primary objective of the phase-in policy should involve deciding upon an amount that is considered acceptable as an annual increase (and consequently a decrease) for the majority within a class. For example, consider a household for which the 1998 assessment-related increase is $1000.00. Without a phase-in, the household would be required to absorb the entire $1000.00 increase in his or her 1998 property tax. To alleviate the financial hardship such a sudden increase may pose to the householder, the increase may be phased-in over several years. If it is phased-in over two years, then the household would experience a 1998 tax increase of $500.00 and a further increase of $500.00 for the 1999 taxation year. If it is phased-in over three years, then the annual impact would be $333.00. Over four years, $250.00 per year, over five years, $200.00 per annum, and so on, to the maximum phase-in period of eight years, which would result in an annual impact of $125.00 in each of the eight years.

Appendix 1 shows the annual impact of various phase-in periods for the residential property class, along with the percentage of the population affected. The detailed data used in this analysis is provided in Appendix 2. Appendices 7-9 present the same data assuming higher residential tax rates of 1.30 percent, 1.35 percent and 1.40 percent, to illustrate the sensitivity of changes in the tax rates from the impact of any tax shifts from either multi-residential, commercial or industrial properties onto the residential property class.

CVA Implementation - Options:

A.Immediate Implementation

Council can implement CVA immediately for the residential property class by choosing not to phase-in tax changes due to reassessment. Under this scenario, 235,521 or 43.9 percent of residential properties would be required to pay their full tax increase in 1998. Conversely, all properties that are entitled to a tax decrease under CVA, would receive their full decrease in 1998.

The data shows that the average tax increase per portion is 26.9 percent or $692.00. Due to the delay of the assessment roll in 1998, this tax increase would be required to be paid in the last four months of the year. Therefore, if Council wishes to alleviate the financial hardship a sudden tax increase may pose to some homeowners, it should adopt a phase-in program.

B.2 Year Phase-in

Under a two-year phase-in period, 65.9 percent of property owners would see an annual impact of less than $250.00, and where 88.2 percent of property owners would see an annual impact of less than $500.00. Under the two-year phase-in, there would be almost 10,683 properties with annual increases greater than $1000.00.

C.3 Year Phase-in

Under a three-year phase-in period, 65.9 per cent of property owners would see an annual impact of less than $167.00, and where 88.2 percent of property owners would see an annual impact of less than $333.00. Under the three-year phase-in, there would still be almost 4,493 properties with annual increases greater than $1000.00.

A phase-in period of three-years would also coincide with the next reassessment for 2001, which would alleviate confusion for the taxpayer of carrying forward residual phase-in amounts from the 1998 reassessment while implementing the full impact of tax changes resulting from the 2001 reassessment or attempting to implement another phase-in program, if available.

D.4 Year Phase-in

Another option to be considered is a four-year phase-in (annual increases to the year 2002) for the residential property class which would result in 88.2 percent of assessment portions (473,013 portions) experiencing annual tax increases or decreases of less than $250.00 per annum over the four years it takes to achieve the total 1998 assessment related tax increase or decrease. Under a four-year phase-in, 2,296 properties would experience annual increases greater than $1000.00.

E.5 Year Phase-in

A five year phase-in period would result in 65.9 per cent of property owners having an annual tax increase of less than $100.00, while 88.2 percent of property owners would have an tax increase less than $200.00. Under the five-year phase-in, 1,404 properties would see annual increases greater than $1000.00.

F.6 Year Phase-in

Under a six-year phase-in period, 65.9 per cent of property owners would see an annual impact of less than $83.00, and 88.2 percent of property owners would see an annual impact of less than $167.00. Under the six-year phase-in, 978 properties would see annual increases greater than $1000.00.

G.7 Year Phase-in

Under a seven-year phase-in period, 65.9 per cent of property owners would see an annual impact of less than $71.00, and 88.2 percent of property owners would see an annual impact of less than $143.00. Under the seven-year phase-in, 758 properties would see annual increases greater than $1000.00.

H.8 Year Phase-in

An eight-year phase-in period is the maximum time period allowed under the legislation. Should Council elect to minimize the impact of assessment reform, the maximum eight-year phase-in should be considered. Under this phase-in period, 65.9 per cent of property owners would see an annual impact of less than $62.00, and 88.2 percent of property owners would see an annual impact of less than $125.00. Under an eight-year phase-in, 605 properties would see annual increases greater than $1000.00.

The annual impact and percentage of assessment portions affected for the various phase-in options for all City wards are shown in Appendix 10.

Given the preceding, if the objective is to maintain the increases at a tolerable level while balance the needs of those who may be subject to a decrease, and reducing the confusion that will arise from the next reassessment program in 2001, then a three year phase-in period is appropriate, as it contains the annual increases (and decreases) to within $167.00, for two-thirds of the assessment portions (properties).

Council can also use thresholds based on a specified dollar amount, in combination with a phase-in program, as set out below:

I.Phase-in Based on Threshold

Another option for a phase-in would be to specify a dollar threshold as a basis for phasing-in increases/decreases instead of an annual percentage change. For example, instead of a phase-in of four years whereby the increase and decrease change 25 percent annually for each of the four years, a dollar threshold of $200.00 could be selected over which any tax increase/decrease would be phased-in each year over four years.

The distribution ranges of tax changes differ for tax increases versus tax decreases, with more portions decreasing than increasing. As a result, the average tax increase is higher than the average tax decrease. Therefore, a threshold set for tax decreases would result in a different threshold for tax increases. For example, a threshold for residential tax decreases of $200.00 would result in a corresponding threshold for tax increases of $299.00. A threshold of tax decreases of $600 would require a threshold increase of $960.00.

The following table illustrates the impact of phasing in a tax increase of $900.00 with a threshold of $299.00 over 4 years. Any tax increase less than or equal to $299.00 would be payable in the first year. The balance of the tax change can be accomplished using one of two methods:

Tax Increase Payable

Threshold Option 1: Pay threshold amount in Year 1 plus phased-in balance of tax increase. Threshold Option 2: Pay threshold if total or annual tax increases and decreases are less than threshold. Pay phased amount of total if annual increases are greater than threshold.

Year 1

$450.00

$299.00

Year 2

$150.00

$200.34

Year 3

$150.00

$200.33

Year 4

$150.00

$200.33

Total

$900.00

$900.00

Threshold Option 1: Annual phase-in amount after Year 1 is less than $299.00 and is phased-in by the total number of years. Total tax change less $299.00, divided by the length of the phase-in (in years), or

($900.00 - $299.00) ) 4 years

= $600.00 ) 4

= $150.00

Year 1 = $299.00 + $150.00 = $450.00

Year 2 = $150.00, etc until the end of the phase-in period.

Threshold Option 2: If the increase or the decrease is less than the threshold amount, the full amount is paid. If the total tax increase or decrease is greater than the threshold, but the annual tax change under a phase-in is less than the threshold, then the amount in Year 1 = threshold; balance is phased-in over the remaining years, or

$600.00 ) 4

= $150.00 per year

Annual phase-in amount < $299.00

Year 1 = $299.00

Year 2 = ($600.00-$299.00) ) (4-1) = $100.00, until the end of the phase-in period.

Where the increase and decrease is greater than the threshold, and the annual phase-in amount is greater than or equal to the threshold, the annual amount paid equals the total tax change divided by the phase-in period, or

$1,500.00 ) 4 = $375.00 per year

Year 1= $375.00

Year 2= $375.00, etc until the end of the phase-in period.

In this example, the $375.00 is more than the threshold of $299.00 and therefore the threshold would not apply.

If Council chooses a threshold option, the preferred option to implement the balance of the tax changes is Option 2. Threshold Option 1 results in a large proportionate share of taxes being paid in Year 1 while Option 2 achieves a more balanced phase-in of any tax changes over and above the threshold. As a result, Threshold Option 2 is used as the basis of the analysis below.

The following table summarizes three options using selected threshold levels and illustrates the number of portions that would experience the full increase or decrease impact in the first year. The three options analyzed were (1) $299.00 increase with a $200.00 decrease; (2) $650.00 increase with a $400.00 decrease; and, (3) $960.00 increase with a $600.00 decrease.

Number of Assessment Portions That Receive Full Increases/Decreases

Under Selected Threshold Options In Year 1

Assessment

Portions

$299 Increase

$200 Decrease

$650 Increase

$400 Decrease

$960 Increase

$600 Decrease

# of Portions

% of Total Portions

# of Portions

% of Total Portions

# of Portions

% of Total Portions

Full Increase

92,986

17.34%

152,408

28.41%

181,561

33.85%

Full Decrease

96,745

18.04%

189,716

35.35%

246,809

46.01%

Total

189,731

35.38%

342,124

63.76%

428,370

79.86%

Using Option 2 as the method to phase-in tax changes above the threshold levels, the distribution of impacts of implementing a phase-in policy with a threshold are summarized below:

(1)Increases of $299.00 and Decreases of $200.00 - 3, 5 and 8 Year Phase-in Periods

Appendix 3 shows the distribution of the assessment portions under this threshold option using a phase-in period of 3 years. In the first year (1998), 35.38 percent or 189,731 portions would see their full increase/decrease. For those that exceed the threshold, the additional annual amount to pay in Years 2 and 3 of the phase-in period would be as follows:

(i)155,306 portions or 29 percent would see an impact of less than $83.00 in each of Years 2 and 3 of the phase-in period. 109,701 portions or 20.5 percent would receive annual tax decreases of less than $83.00 and 45,605 portions or 8.5 percent would receive annual tax increases of less than $83.00.

(ii)94,396 portions or 20.5 percent would see an impact of between $83.00 and $167.00 in each of Years 2 and 3 of the phase-in period. 64,731 portions or 12 percent would receive annual tax decreases of between $83.00 and $167.00 while 29,665 portions or 8.5 percent would receive annual tax increases of between $83.00 and $167.00.

(iii)66,933 portions or 12.5 percent would see an impact of between $167.00 and $333.00 in each of Years 2 and 3 of the phase-in period. 28,429 portions or 5.3 percent would receive annual tax decreases of between $167.00 and $333.00 while 38,504 portions or 7.2 percent would receive annual tax increases of between $167.00 and $333.00.

(iv)30,021 portions or 5.6 percent would see an impact of more than $333.00 in each of Years 2 and 3 of the phase-in period. 10,331 portions or 1.9 percent would receive annual tax decreases of more than $333.00 while 19,690 portions or 3.7 percent would receive annual tax increases of more than $333.00.

Appendix 3 also shows the annual tax impacts based on a threshold for tax decreases of $200.00 over phase-in periods of 5 and 8 years. A longer phase-in period raises the threshold slightly for tax increases to $308.00, from $299.00. The change in the tax increase threshold results in an additional 2,167 properties paying their full increase in Year 1. However, the longer the phase-in period, the lower the annual tax impact in each of the subsequent years of the phase-in period. For example, under a 5 year phase-in period, 496,485 portions or 92.2 percent would see an annual tax impact of less than $200.00. Under an 8 year phase-in period, 495,555 or 92 percent would receive an annual tax impact of less than $125.00.

Appendix 4 shows a comparison between the annual tax changes and distribution of increases and decreases based on phase-in periods of 3, 5 and 8 years. The table compares the distribution of portions in each tax change range that would occur under a decrease threshold of $200.00 scenario, with the distribution of portions the would occur under a phase-in without a threshold.

(2)Increases of $650.00 and Decreases of $400.00 - 3 Year Phase-in Period

Appendix 5 shows the distribution of the assessment portions under this threshold option. In the first year (1998), 63.78 percent or 342,124 portions would see their full increase/decrease. For those that exceed the threshold, the additional annual amount to pay would be as follows:

(i)91,281 portions or 17percent would see an impact of less than $83.00 in each of Years 2 and 3 of the phase-in period. 66,723 portions or 12.4 percent would receive annual tax decreases of less than $83.00 and 24,558 portions or 4.5 percent would receive annual tax increases of less than $83.00.

(ii)43,771 portions or 8.2 percent would see an impact of between $83.00 and $167.00 in each of Years 2 and 3 of the phase-in period. 27,359 portions or 5.1 percent would receive annual tax decreases of between $83.00 and $167.00 while 16,412 portions or 3.1 percent would receive annual tax increases of between $83.00 and $167.00.

(iii)32,630 portions or 6.1 percent would see an impact of between $167.00 and $333.00 in each of Years 2 and 3 of the phase-in period. 15,808 portions or 3 percent would receive annual tax decreases of between $167.00 and $333.00 while 16,822 portions or 3.1 percent would receive annual tax increases of between $167.00 and $333.00.

(iv)26,581 portions or 5 percent would see an impact of more than $333.00 in each of Years 2 and 3 of the phase-in period. 10,331 portions or 1.9 percent would receive annual tax decreases of more than $333.00 while 16,250 portions or 3 percent would receive annual tax increase of more than $333.00.

(3)Increases of $960.00 and Decreases of $600.00 - 3 Year Phase-in

Appendix 6 shows the distribution of the assessment portions under this threshold option. In the first year (1998), 80 percent or 428,370 portions would see their full increase/decrease. For those that exceed the threshold, the additional annual amount to pay would be as follows:

(i)48,431 portions or 9 percent would see an impact of less than $83.00 in each of Years2 and 3 of the phase-in period. 33,736 portions or 6.3 percent would receive annual tax decreases of less than $83.00 and 14,695 portions or 2.7 percent would receive annual tax increases of less than $83.00.

(ii)20,243 portions or 4 percent would see an impact of between $83.00 and $167.00 in each of Years 2 and 3 of the phase-in period. 11,870 portions or 2.2 percent would receive annual tax decreases of between $83.00 and $167.00 while 9,493 portions or 1.8 percent would receive annual tax increases of between $83.00 and $167.00.

(iii)17,612 portions or 3.3 percent would see an impact of between $167.00 and $333.00 in each of Years 2 and 3 of the phase-in period. 8,119 portions or 1.5 percent would receive annual tax decreases of between $167.00 and $333.00 while 9,493 portions or 1.8 percent would receive annual tax increases of between $167.00 and $333.00.

(iv)20,731 portions or 3.9 percent would see an impact of more than $333.00 in each of Years 2 and 3 of the phase-in period. 9,403 portions or 1.8 percent would receive annual tax decreases of more than $333.00 while 11,328 portions or 2.1 percent would receive annual tax increase of more than $333.00.

Impact of Next Reassessment on Phase-in Program:

A secondary but important issue that needs to be addressed during consideration of a phase-in period is the impact of subsequent reassessments. The legislation prescribes that reassessment is to occur at three year intervals, with the next assessment being effected three years hence for the 2001 taxation year. A distinct advantage of a three-year phase-in period is that the entire assessment-related increase or decrease would be completely phased-in prior to the next reassessment. This would alleviate the confusion for the taxpayer of carrying forward residual phase-in amounts from the 1998 reassessment while attempting to implement another phase-in program, if available, for the 2001 reassessment. This reason provides a significant advantage over the alternative four-year phase-in presented in this analysis.

The next reassessment, which will occur for taxation in the year 2001, will be based on valuations as at June, 1999. At this time, existing legislation does not permit any phase-in of tax changes resulting from the next reassessment.

The phasing-in of the reassessment changes occurring in 1998, if longer than 3 years, would continue until the phase-in is completed and will not be eliminated with the next reassessment in 2001. The following examples, using both a 3 year and 8 year phase-in scenario for the 1998 assessment-related tax changes, demonstrate what would occur with the 2001 reassessment.

Scenario:Phase-in beginning in 1998 for 3 and 8 years, with no change in CVA in 2001

1997 Taxes$3,000.00

1998 Preliminary Taxes$3,300.00

Assessment-related Tax Increase $300.00

Taxes Payable per Year (1997 Base Taxes = $3,000)

Phase-in Period

1998

1999

2000

2001

2002

2003

2004

2005

3-Years

$3,100.00

$3,200.00

$3,300.00

$3,300.00

$3,300.00

$3,300.00

$3,300.00

$3,300.00

8-Years

$3,037.50

$3,075.00

$3,112.50

$3,150.00

$3,187.50

$3,225.00

$3,262.50

$3,300.00

Example 1: Phase-in with 2001 CVA reassessment increase

1997 Taxes$3,000.00

1998 Preliminary Taxes$3,300.00

Assessment-related Tax Increase $300.00

2001 Tax (reassessment re 1999 valuation)$3,600.00

Taxes Payable per Year

Phase-in Period

1998

1999

2000

2001

2002

2003

2004

2005

3 Years
Assessment-related tax change - 1996 Base

$3,100

$3,200

$3,300

$3,300

$3,300

$3,300

$3,300

$3,300

Assessment-related tax change - 1999 Base

$300

$300

$300

$300

$300

Total Payable

$3,200

$3,200

$3,300

$3,600

$3,600

$3,600

$3,600

$3,600

8 Years
Assessment-related tax change - 1996 Base

$3,038

$3,075

$3,113

$3,150

$3,188

$3,225

$3,263

$3,300

Assessment-related tax change - 1999 Base

$300

$300

$300

$300

$300

Total Payable

$3,038

$3,075

$3,113

$3,450

$3,488

$3,525

$3,563

$3,600

Example 2: Phase-in with 2001 CVA reassessment decrease

1997 Taxes$3,000.00

1998 Preliminary Taxes$3,300.00

Assessment-related Tax Decrease -$300.00

2001 Tax (reassessment re 1999 valuation)$3,000.00

Taxes Payable per Year

Phase-in Period

1998

1999

2000

2001

2002

2003

2004

2005

3 Years
Assessment-related tax change - 1996 Base

$3,100

$3,200

$3,300

$3,300

$3,300

$3,300

$3,300

$3,300

Assessment-related tax change - 1999 Base

($300)

($300)

($300)

($300)

($300)

Total Payable

$3,200

$3,200

$3,300

$3,000

$3,000

$3,000

$3,000

$3,000

8 Years
Assessment-related tax change - 1996 Base

$3,038

$3,075

$3,113

$3,150

$3,188

$3,225

$3,263

$3,300

Assessment-related tax change - 1999 Base

($300)

($300)

($300)

($300)

($300)

Total Payable

$3,038

$3,075

$3,113

$2,850

$2,888

$2,925

$2,963

$3,000

Any property that is subject to a successful assessment appeal will affect the phase-in program. The reduction must be taken into account and re-calculated as part of the phase-in program. If prior years were appealed the taxpayer would be entitled to the full refund, however, the property would be subject to the requirements of the phase-in program.

If Council adopts an eight year phase-in program, it could repeal the by-law after the third year (2001) to coincide with the next reassessment cycle. However, the initial eight phase-in program (and by-law) would have created expectations among taxpayers that their tax increase would be phased-in over the eight years with a specified annual tax payable. To repeal the by-law in 2001 might be seen as unfair and may cause undue financial hardship to those taxpayers expecting the longer phase-in period, as any unpaid balance for the remaining five years, would become due in 2001. Since the City would be carrying the phased-in decreases over the eight year period as well, the repeal of the bylaw after three years would result in those taxpayers being credited with the total outstanding decreases at that time.

Conclusion:

The City may pass a by-law providing for the phase-in of assessment-related property tax increases and decreases pursuant to the Fair Municipal Finance Act. The amount of increases phased-in must be borne by those in the same property class who are entitled to decreases. By choosing a phase-in period, Council must balance the needs of those who are entitled to decreases with the needs of those who may experience the financial hardship of a tax increase. This report takes the approach of attempting to find a level of annual impact that may be acceptable to both the increase and decrease sides. Should Council elect to minimize the impact of assessment reform, the maximum eight-year phase-in should be considered. Under this phase-in period, 88.2 percent of property owners would see an annual impact of less than $125.00.

The analysis also shows that approximately two-thirds of all the residential assessment portions may be accommodated with an annual impact of $167.00 or less if a three-year phase-in period is adopted. In fact, approximately nine-tenths of the portions would see an impact of $333.00 or less (that is those entitled to decreases as well as those that may be receiving increases). Furthermore, the three-year phase-in has a distinct advantage over longer phase-in periods in that the entire assessment-related increase or decrease would be completely phased-in prior to the next reassessment. This would alleviate the confusion for the taxpayer, of carrying forward residual phase-in amounts from the 1998 reassessment while attempting to implement another phase-in program, if available, for the 2001 reassessment. For 1998, due to the Provincial transitional ratios, there will be a one time tax shift to the residential class of $15 Million, which cannot be part of any phase-in program and must therefore be absorbed by all properties.

Contact Names:

Paul Wealleans, 397-4208

Lynne Ashton, 397-4203

Adir Gupta, 392-8071

Insert Table/Map No. 1

appendix 1

Appendix 2

Residential/Farm Property Class - Phase-in Program - City Total

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

0 - 49

21,017

44,405 69,665 96,745 124,447 147,897 168,960 189,716

50 - 99

23,388

52,340 78,232 92,971 97,594 98,912 95,700 86,565

100 - 149

25,260

51,152 58,549 57,093 49,136 36,989 26,227 18,808

150 - 199

27,080

41,819 40,363 29,472 17,632 11,291 7,543 5,445

200 - 249

27,702

32,325 24,368 12,528 7,210 4,517 3,161 2,286

250 - 299

23,450

24,768 12,621 6,280 3,587 2,255 1,738 1,930

300 - 349

21,063

17,851 7,089 3,341 1,985 1,468 1,603 1,783

350 - 399

20,756

11,621 4,202 2,104 1,229 1,421 1,601 894

400 - 449

16,730

7,517 2,604 1,327 1,130 1,433 818 565

450 - 499

15,595

5,011 1,913 959 1,186 826 532 382

500 - 599

24,768

6,280 2,255 1,930 1,873 983 640 462

600 - 699

17,851

3,341 1,468 1,783 874 531 350 263

700 - 799

11,621

2,104 1,421 894 491 313 226 198

800 - 899

7,517

1,327 1,433 565 327 199 171 122

900 - 999

5,011

959 826 382 205 178 123 68

1,000 - 1,999

14,011

5,554 2,204 1,113 709 449 300 225

2,000 - 2,999

4,189

839 356 175 86 69 59 61

3,000 - 3,999

1,365

274 93 50 44 42 33 27

4,000 - 4,999

532

128 39 33 30 23 23 19

5,000 - 5,999

307

47 30 28 21 14 15 16

6,000 - 6,999

180

31 21 12 12 13 15 13

7,000 - 7,999

94

19 21 15 11 12 10 17

Over 8,000

450

225 164 137 118 102 89 72
Total Decrease Portions

300,866

56.09%

Average -$491 Median -$305

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

0 - 49

20,033

36,770 52,805 67,583 80,973 93,051 104,107 113,843

50 - 99

16,737

30,813 40,246 46,260 50,138 52,485 54,086 54,318

100 - 149

16,035

25,468 29,838 31,693 32,214 31,250 29,235 27,496

150 - 199

14,778

20,792 22,647 22,625 20,879 18,871 16,090 13,348

200 - 249

13,390

17,268 17,789 16,043 13,742 10,918 8,372 6,397

250 - 299

12,078

14,425 13,461 11,453 8,629 6,165 4,539 3,444

300 - 349

11,056

12,657 10,642 7,861 5,315 3,689 2,753 2,184

350 - 399

9,736

9,968 8,229 5,487 3,512 2,417 1,848 1,362

400 - 449

9,046

8,625 6,177 3,735 2,381 1,696 1,216 942

450 - 499

8,222

7,418 4,741 2,662 1,725 1,230 906 635

500 - 599

14,425

11,453 6,165 3,444 2,264 1,562 1,050 757

600 - 699

12,657

7,861 3,689 2,184 1,380 868 597 437

700 - 799

9,968

5,487 2,417 1,362 817 524 364 201

800 - 899

8,625

3,735 1,696 942 548 360 183 172

900 - 999

7,418

2,662 1,230 635 344 201 161 124

1,000 - 1,999

31,198

8,567 3,515 1,691 983 638 471 345

2,000 - 2,999

6,370

1,318 480 265 145 122 122 136

3,000 - 3,999

2,197

373 158 80 92 94 71 46

4,000 - 4,999

892

184 64 76 67 38 23 26

5,000 - 5,999

426

81 58 60 31 24 23 11

6,000 - 6,999

220

53 53 30 15 14 8 5

7,000 - 7,999

153

27 41 16 19 7 4 4

Over 8,000

605

260 124 78 52 41 36 32
Total Increase Portions

235,521

43.91%

Average $692 Median $399

Appendix 2 (continued)

Residential/Farm Property Class - Phase-in Program - City Total

Assessment Portions with Tax Decreases - By Phase-in Years

Percentage Decrease

0

2

3

4

5

6

7

8

-(0.00% - 4.99%)

50,752

113,596

176,378

227,105

261,669

279,280

289,553

295,115

-(5.00% - 9.99%)

62,844

113,509

102,902

68,010

39,715

26,494

19,139

14,567

-(10.00% - 14.99%)

62,782

52,175

19,390

10,659

8,072

4,081

1,245

255

-(15.00% - 19.99%)

50,727

15,835

7,104

3,908

481

82

0

0

-(20.00% - 24.99%)

34,564

6,269

3,682

255

0

0

0

0

-(25.00% - 29.99%)

17,611

4,390

399

0

0

0

0

0

-(30.00% - 34.99%)

10,273

2,918

82

0

0

0

0

0

-(35.00% - 39.99%)

5,562

990

0

0

0

0

0

0

-(40.00% - 44.99%)

3,555

173

0

0

0

0

0

0

-(45.00% - 49.99%)

2,714

82

0

0

0

0

0

0

-(50.00% - 59.99%)

4,390

0

0

0

0

0

0

0

-(60.00% - 69.99%)

2,918

0

0

0

0

0

0

0

-(70.00% - 79.99%)

990

0

0

0

0

0

0

0

-(80.00% - 89.99%)

173

0

0

0

0

0

0

0

-(90.00% - 99.99%)

82

0

0

0

0

0

0

0

Total Decrease Portions

300,866

56.09%

Average -17.29% Median -12.71%

Assessment Portions with Tax Increases - By Phase-in Years

Percentage Increase

0

2

3

4

5

6

7

8

0.00% - 4.99%

39,825

70,862

98,434

120,365

138,697

154,106

167,026

177,545

5.00% - 9.99%

31,037

49,503

55,672

57,180

54,330

49,243

42,850

36,555

10.00% - 14.99%

27,572

33,741

32,063

25,804

19,157

13,639

9,888

7,257

15.00% - 19.99%

21,931

23,439

17,180

10,751

6,705

4,369

2,637

1,623

20.00% - 24.99%

18,332

15,482

8,835

4,789

2,828

1,368

1,019

792

25.00% - 29.99%

15,409

10,322

4,804

2,468

1,008

756

475

340

30.00% - 34.99%

12,920

6,527

2,776

1,044

695

414

255

259

35.00% - 39.99%

10,519

4,224

1,593

579

352

217

221

236

40.00% - 44.99%

8,624

2,888

866

501

227

210

191

240

45.00% - 49.99%

6,858

1,901

502

291

184

155

236

223

50.00% - 59.99%

10,322

2,468

756

340

294

370

338

290

60.00% - 69.99%

6,527

1,044

414

259

321

289

244

313

70.00% - 79.99%

4,224

579

217

236

272

224

293

238

80.00% - 89.99%

2,888

501

210

240

181

190

177

57

90.00% - 99.99%

1,901

291

155

223

150

209

94

42

Over 100.00%

7,534

2,651

1,946

1,353

1,022

664

479

413

Total Increase Portions

235,521

43.91%

Average 26.91% Median 18.31%

Insert Table/Map No. 1

appendix 3 - annual impact of phase-in policy with threshold

Insert Table/Map No. 2

appendix 4 - annual impact of phase-in policy comparison of inc/dec

Insert Table/Map No. 3

appendix 4 con'td - annual impact of phase-in policy

Insert Table/Map No. 4

appendix 5 - annual impact of phase-in policy with threshold

Insert Table/Map No. 5

appendix 6 - annual impact of phase-in policy with threshold

Insert Table/Map No. 6

appendix 7

Insert Table/Map No.7

appendix 8

Insert Table/Map No. 8

appendix 9

Appendix 10

Phase-in Distribution of Residential/Farm Property Class -

For Ward 01

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

911

1842 2775 3639 4451 5418 6352 7421

-($50 - $99)

931

1797 2643 3782 3814 3513 2899 2009

-($100 - $149)

933

1779 2486 1510 1080 617 426 336

-($150 - $199)

864

2003 1027 499 290 218 151 111

-($200 - $249)

812

844 414 205 146 85 79 64

-($250 - $299)

967

666 203 131 70 65 38 29

-($300 - $349)

934

320 129 62 56 29 32 34

-($350 - $399)

1069

179 89 49 34 25 27 10

-($400 - $449)

483

118 48 39 15 28 9 17

-($450 - $499)

361

87 37 25 27 13 11 9

-($500 - $599)

666

131 65 29 28 20 19 16

-($600 - $699)

320

62 29 34 13 12 13 17

-($700 - $799)

179

49 25 10 16 13 17 12

-($800 - $899)

118

39 28 17 10 14 11 12

-($900 - $999)

87

25 13 9 10 10 11 10

-($1,000 - $1,999)

306

99 69 67 52 33 19 8

-($2,000 - $2,999)

70

40 31 6 2 4 5 5

-($3,000 - $3,999)

29

27 2 2 4 3 2 1

-($4,000 - $4,999)

20

5 1 3 2 1 0 0

-($5,000 - $5,999)

20

1 3 2 1 0 0 0

-($6,000 - $6,999)

15

1 2 1 0 0 0 1

-($7,000 - $7,999)

12

1 1 0 0 0 1 1

Over -$8,000

18

10 5 4 4 4 3 2
Total Decrease Portions

10,125

42.00%

Average -$437 Median -$277

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

977

2035 3116 4217 5407 6546 7565 8423

$50 - $99

1058

2182 3430 4206 4392 4231 3896 3518

$100 - $149

1081

2329 2625 2354 1918 1542 1267 1083

$150 - $199

1101

1877 1606 1164 899 705 582 476

$200 - $249

1190

1376 940 675 491 384 287 239

$250 - $299

1139

978 602 408 301 224 170 91

$300 - $349

1019

684 409 286 189 135 70 47

$350 - $399

858

480 296 190 142 63 40 32

$400 - $449

748

378 226 132 64 32 29 8

$450 - $499

628

297 158 107 40 33 11 10

$500 - $599

978

408 224 91 52 22 14 14

$600 - $699

684

286 135 47 22 14 10 5

$700 - $799

480

190 63 32 10 10 5 7

$800 - $899

378

132 32 8 11 4 7 6

$900 - $999

297

107 33 10 4 7 5 2

$1,000 - $1,999

1123

188 57 34 31 22 17 16

$2,000 - $2,999

156

25 17 13 2 4 4 2

$3,000 - $3,999

32

9 5 3 3 1 1 1

$4,000 - $4,999

15

12 1 1 1 1 0 0

$5,000 - $5,999

10

1 3 1 1 0 0 0

$6,000 - $6,999

6

1 1 1 0 0 0 0

$7,000 - $7,999

3

2 0 0 0 0 0 0

Over $8,000

19

3 1 0 0 0 0 0
Total Increase Portions

13,980

58.00%

Average $375 Median $319

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 02

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1115

2325 3249 4052 4644 5132 5559 5925

-($50 - $99)

1210

1727 1883 1873 1737 1711 1588 1493

-($100 - $149)

924

1080 1060 918 924 760 646 507

-($150 - $199)

803

793 651 575 434 322 237 217

-($200 - $249)

592

456 462 321 224 162 186 218

-($250 - $299)

488

462 298 186 124 153 193 205

-($300 - $349)

427

304 190 105 129 169 175 108

-($350 - $399)

366

271 132 112 144 156 89 57

-($400 - $449)

267

185 85 98 126 84 53 51

-($450 - $499)

189

136 77 120 110 53 46 28

-($500 - $599)

462

186 153 205 106 79 51 58

-($600 - $699)

304

105 169 108 70 42 51 74

-($700 - $799)

271

112 156 57 37 44 67 40

-($800 - $899)

185

98 84 51 42 53 35 6

-($900 - $999)

136

120 53 28 31 44 10 3

-($1,000 - $1,999)

621

449 262 181 108 28 8 6

-($2,000 - $2,999)

342

155 26 2 6 5 5 6

-($3,000 - $3,999)

107

26 2 4 3 5 4 1

-($4,000 - $4,999)

73

0 4 3 3 1 0 0

-($5,000 - $5,999)

82

2 1 3 1 0 1 4

-($6,000 - $6,999)

22

2 2 1 0 1 3 0

-($7,000 - $7,999)

4

2 3 0 0 3 0 5

Over -$8,000

24

18 12 11 11 7 7 2
Total Decrease Portions

9,014

41.26%

Average

-$657

Median

-$240

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1360

2653 4068 5315 6463 7493 8485 9290

$50 - $99

1293

2662 3425 3975 4096 3903 3303 2766

$100 - $149

1415

2178 2545 2106 1408 878 684 524

$150 - $199

1247

1797 1358 660 472 306 212 144

$200 - $249

1148

1269 571 383 178 129 59 53

$250 - $299

1030

837 307 141 92 42 42 23

$300 - $349

992

392 198 104 34 34 16 20

$350 - $399

805

268 108 40 34 15 19 6

$400 - $449

748

218 81 27 18 16 5 2

$450 - $499

521

165 48 26 11 8 2 1

$500 - $599

837

141 42 23 18 4 5 3

$600 - $699

392

104 34 20 3 4 0 0

$700 - $799

268

40 15 6 2 0 0 1

$800 - $899

218

27 16 2 3 0 1 1

$900 - $999

165

26 8 1 0 1 1 0

$1,000 - $1,999

338

52 9 5 2 2 1 1

$2,000 - $2,999

47

4 1 1 1 0 0 0

$3,000 - $3,999

5

1 1 0 0 0 0 0

$4,000 - $4,999

3

0 0 0 0 0 0 0

$5,000 - $5,999

1

1 0 0 0 0 0 0

$6,000 - $6,999

1

0 0 0 0 0 0 0

$7,000 - $7,999

0

0 0 0 0 0 0 0

Over $8,000

1

Total Increase Portions

12,835

58.74%

Average $320 Median $248

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 03

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

702

1433 2253 3107 5326 6419 7242 8010

-($50 - $99)

731

1674 4166 4903 4006 3669 3338 2955

-($100 - $149)

820

3312 2171 2078 1463 1110 841 577

-($150 - $199)

854

1591 1498 877 562 344 227 165

-($200 - $249)

2219

1322 707 392 215 134 97 72

-($250 - $299)

1093

756 403 185 104 78 49 49

-($300 - $349)

823

492 223 106 69 40 36 18

-($350 - $399)

768

385 121 59 34 34 16 6

-($400 - $449)

580

233 81 47 32 12 5 3

-($450 - $499)

742

159 53 25 22 9 4 2

-($500 - $599)

756

185 78 49 16 6 3 7

-($600 - $699)

492

106 40 18 6 3 7 4

-($700 - $799)

385

59 34 6 2 6 3 2

-($800 - $899)

233

47 12 3 4 2 2 4

-($900 - $999)

159

25 9 2 4 2 4 0

-($1,000 - $1,999)

422

78 19 17 12 11 5 6

-($2,000 - $2,999)

70

11 9 5 3 1 1 0

-($3,000 - $3,999)

8

6 2 1 0 0 1 1

-($4,000 - $4,999)

8

3 1 0 0 1 0 0

-($5,000 - $5,999)

3

2 0 0 1 0 0 0

-($6,000 - $6,999)

6

0 0 1 0 0 0 0

-($7,000 - $7,999)

0

1 0 0 0 0 0 0

Over -$8,000

7

1 1 0 0 0 0 0
Total Decrease Portions

11,881

61.74%

Average -$385 Median -$280

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

632

1159 1713 2258 2699 3080 3361 3600

$50 - $99

527

1099 1367 1342 1331 1315 1340 1359

$100 - $149

554

822 748 795 809 793 837 908

$150 - $199

545

520 567 564 596 679 733 692

$200 - $249

441

430 444 476 536 569 453 365

$250 - $299

381

365 349 432 465 350 266 166

$300 - $349

281

306 350 404 288 204 119 87

$350 - $399

239

258 329 288 200 100 68 42

$400 - $449

228

229 313 227 118 69 38 19

$450 - $499

202

247 256 138 83 40 21 26

$500 - $599

365

432 350 166 74 39 46 49

$600 - $699

306

404 204 87 37 44 36 20

$700 - $799

258

288 100 42 28 31 15 7

$800 - $899

229

227 69 19 32 18 6 7

$900 - $999

247

138 40 26 27 5 6 6

$1,000 - $1,999

1489

340 137 89 34 22 15 7

$2,000 - $2,999

275

72 21 5 3 2 0 0

$3,000 - $3,999

65

17 1 2 0 0 0 0

$4,000 - $4,999

59

4 2 0 0 0 0 0

$5,000 - $5,999

13

1 0 0 0 0 0 0

$6,000 - $6,999

9

2 0 0 0 0 0 0

$7,000 - $7,999

8

0 0 0 0 0 0 0

Over $8,000

10

3 3 3 3 3 3 3
Total Increase Portions

7,363

38.26%

Average $859 Median $418

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 04

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1186

2761 4415 5948 7437 8464 9261 9826

-($50 - $99)

1575

3187 4049 3878 3336 2941 2565 2296

-($100 - $149)

1654

2516 1883 1579 1200 873 586 354

-($150 - $199)

1533

1362 1058 717 408 198 109 61

-($200 - $249)

1489

947 568 259 103 55 22 11

-($250 - $299)

1027

632 305 95 47 15 7 4

-($300 - $349)

797

421 134 45 12 4 2 0

-($350 - $399)

565

296 64 16 5 2 0 0

-($400 - $449)

521

156 37 9 2 0 0 0

-($450 - $499)

426

103 18 2 2 0 0 1

-($500 - $599)

632

95 15 4 0 0 1 13

-($600 - $699)

421

45 4 0 0 1 13 6

-($700 - $799)

296

16 2 0 1 13 6 15

-($800 - $899)

156

9 0 0 3 5 15 0

-($900 - $999)

103

2 0 1 12 14 0 0

-($1,000 - $1,999)

167

5 33 34 21 4 4 4

-($2,000 - $2,999)

4

32 3 2 2 2 0 0

-($3,000 - $3,999)

1

2 1 2 0 0 0 0

-($4,000 - $4,999)

15

2 2 0 0 0 0 0

-($5,000 - $5,999)

17

0 0 0 0 0 0 0

-($6,000 - $6,999)

2

2 0 0 0 0 0 0

-($7,000 - $7,999)

0

0 0 0 0 0 0

Over -$8,000

4

Total Decrease Portions

12,591

63.93%

Average -$289 Median -$206

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1253

2012 2817 3541 4173 4884 5398 5793

$50 - $99

759

1529 2067 2252 2092 1645 1288 993

$100 - $149

805

1343 1192 736 482 327 236 172

$150 - $199

724

909 453 257 154 102 70 53

$200 - $249

632

472 218 115 67 43 42 49

$250 - $299

711

264 109 57 33 40 31 15

$300 - $349

514

157 66 34 33 24 11 9

$350 - $399

395

100 36 19 26 10 8 2

$400 - $449

283

70 26 30 13 8 2 6

$450 - $499

189

45 17 19 4 3 5 3

$500 - $599

264

57 40 15 9 6 5 4

$600 - $699

157

34 24 9 5 4 4 1

$700 - $799

100

19 10 2 4 3 0 0

$800 - $899

70

30 8 6 2 1 0 0

$900 - $999

45

19 3 3 3 0 0 1

$1,000 - $1,999

159

35 14 6 1 1 1 0

$2,000 - $2,999

26

5 1 0 0 0 0 1

$3,000 - $3,999

9

1 0 0 0 1 1 0

$4,000 - $4,999

5

0 0 0 1 0 0 0

$5,000 - $5,999

0

0 0 1 0 0 0 1

$6,000 - $6,999

0

0 0 0 0 0 1 0

$7,000 - $7,999

1

0 1 0 0 1 0 0

Over $8,000

3

3 2 2 2 1 1 1
Total Increase Portions

7,104

36.07%

Average $314 Median $202

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 05

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

767

1373 1904 2672 3437 4301 5254 6270

-($50 - $99)

606

1299 2397 3598 5216 6841 7857 7820

-($100 - $149)

531

1629 3076 4872 4968 3608 2127 1434

-($150 - $199)

768

1969 3765 2948 1485 774 636 475

-($200 - $249)

765

2383 2479 1016 482 437 147 47

-($250 - $299)

864

2489 1129 418 373 69 36 319

-($300 - $349)

953

1969 488 350 60 27 346 323

-($350 - $399)

1016

979 286 125 25 308 285 31

-($400 - $449)

1107

660 255 31 34 227 30 2

-($450 - $499)

1276

356 182 16 324 126 2 6

-($500 - $599)

2489

418 69 319 314 3 13 10

-($600 - $699)

1969

350 27 323 2 12 6 7

-($700 - $799)

979

125 308 31 7 4 5 9

-($800 - $899)

660

31 227 2 7 4 9 0

-($900 - $999)

356

16 126 6 6 12 0 1

-($1,000 - $1,999)

940

681 35 27 17 5 5 4

-($2,000 - $2,999)

672

26 3 4 1 0 0 0

-($3,000 - $3,999)

9

1 2 0 0 0 0 2

-($4,000 - $4,999)

13

3 0 0 0 1 2 2

-($5,000 - $5,999)

13

1 0 0 1 1 2 0

-($6,000 - $6,999)

0

0 0 0 1 2 0 0

-($7,000 - $7,999)

1

0 0 2 2 0 0 0

Over -$8,000

11

7 7 5 3 3 3 3
Total Decrease Portions

16,765

92.39%

Average -$630 Median -$489

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

468

806 902 1011 1033 1060 1074 1094

$50 - $99

338

205 158 83 82 70 124 116

$100 - $149

96

49 43 36 85 85 134 125

$150 - $199

109

34 27 80 132 120 14 17

$200 - $249

22

21 70 122 6 13 6 5

$250 - $299

27

15 15 3 10 4 5 5

$300 - $349

14

68 117 11 4 5 5 9

$350 - $399

20

12 3 6 5 5 9 7

$400 - $449

9

5 7 0 0 2 7 0

$450 - $499

12

117 6 5 5 12 0 0

$500 - $599

15

3 4 5 14 2 0 0

$600 - $699

68

11 5 9 2 0 0 1

$700 - $799

12

6 5 7 0 0 1 0

$800 - $899

5

0 2 0 0 1 0 0

$900 - $999

117

5 12 0 1 0 0 0

$1,000 - $1,999

25

21 3 1 0 0 0 1

$2,000 - $2,999

19

1 0 0 1 1 1 0

$3,000 - $3,999

2

0 0 1 0 0 0 0

$4,000 - $4,999

1

0 1 0 0 0 0 1

$5,000 - $5,999

0

0 0 0 0 0 1 0

$6,000 - $6,999

0

0 0 0 0 1 0 0

$7,000 - $7,999

0

1 0 0 1 0 0 0

Over $8,000

2

1 1 1 0 0 0 0
Total Increase Portions

1,381

7.61%

Average $308 Median $84

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 06

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1308

2718 4087 5546 6608 7452 8091 8679

-($50 - $99)

1410

2828 3365 3133 2800 2319 1851 1421

-($100 - $149)

1369

1906 1664 1092 614 404 324 194

-($150 - $199)

1459

1227 655 329 228 119 65 73

-($200 - $249)

1062

729 251 150 56 60 47 22

-($250 - $299)

844

363 153 44 48 25 14 18

-($300 - $349)

639

171 91 37 24 13 15 7

-($350 - $399)

588

158 28 36 11 15 7 13

-($400 - $449)

437

75 31 12 11 6 13 5

-($450 - $499)

292

75 29 10 10 8 2 7

-($500 - $599)

363

44 25 18 11 11 14 7

-($600 - $699)

171

37 13 7 8 11 4 6

-($700 - $799)

158

36 15 13 10 3 5 4

-($800 - $899)

75

12 6 5 6 5 4 0

-($900 - $999)

75

10 8 7 3 3 0 1

-($1,000 - $1,999)

139

50 33 18 11 7 6 6

-($2,000 - $2,999)

32

15 4 4 3 2 2 3

-($3,000 - $3,999)

18

3 3 2 2 3 2 0

-($4,000 - $4,999)

9

2 1 1 2 0 1 2

-($5,000 - $5,999)

6

2 1 2 0 1 1 0

-($6,000 - $6,999)

2

1 1 0 1 1 0 1

-($7,000 - $7,999)

1

1 2 0 1 0 1 1

Over -$8,000

17

11 8 8 6 6 5 4
Total Decrease Portions

10,474

65.88%

Average -$369 Median -$190

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1228

2234 3063 3745 4223 4522 4727 4859

$50 - $99

1006

1511 1459 1114 824 617 475 364

$100 - $149

829

777 448 280 168 102 55 58

$150 - $199

682

337 169 84 37 40 130 123

$200 - $249

478

188 76 29 86 121 24 14

$250 - $299

299

92 26 29 64 12 8 2

$300 - $349

205

63 16 106 9 5 1 2

$350 - $399

132

21 24 17 7 1 2 0

$400 - $449

111

18 94 10 2 1 0 0

$450 - $499

77

11 27 4 0 1 0 0

$500 - $599

92

29 12 2 2 0 0 0

$600 - $699

63

106 5 2 0 0 0 0

$700 - $799

21

17 1 0 0 0 0 0

$800 - $899

18

10 1 0 0 0 0 1

$900 - $999

11

4 1 0 0 0 1 0

$1,000 - $1,999

166

4 0 1 1 1 0 0

$2,000 - $2,999

4

0 1 0 0 0 0 0

$3,000 - $3,999

0

1 0 0 0 0 0 0

$4,000 - $4,999

$5,000 - $5,999
$6,000 - $6,999

1

0 0 0 0 0 0 0

$7,000 - $7,999

Over $8,000

1

1 1 1 1 1 1 1
Total Increase Portions

5,424

34.12%

Average $258 Median $128

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 07

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

752

1658 2922 4055 5334 6449 7795 9016

-($50 - $99)

906

2397 3527 4961 5327 4944 3812 2657

-($100 - $149)

1264

2394 3459 2377 985 326 132 75

-($150 - $199)

1133

2567 1485 280 91 29 17 10

-($200 - $249)

1279

1645 253 64 14 9 4 4

-($250 - $299)

1115

732 73 11 6 3 2 0

-($300 - $349)

1346

214 20 8 3 2 0 3

-($350 - $399)

1221

66 9 2 2 0 3 6

-($400 - $449)

892

46 8 2 0 1 5 10

-($450 - $499)

753

18 1 2 0 5 10 2

-($500 - $599)

732

11 3 0 6 13 5 3

-($600 - $699)

214

8 2 3 12 4 1 2

-($700 - $799)

66

2 0 6 3 1 2 2

-($800 - $899)

46

2 1 10 2 1 1 0

-($900 - $999)

18

2 5 2 1 2 1 0

-($1,000 - $1,999)

25

21 21 7 4 2 2 2

-($2,000 - $2,999)

6

6 1 1 2 1 2 2

-($3,000 - $3,999)

15

1 1 1 2 2 0 0

-($4,000 - $4,999)

3

0 1 2 0 0 1 1

-($5,000 - $5,999)

3

1 0 0 0 1 0 1

-($6,000 - $6,999)

1

1 2 0 1 0 1 0

-($7,000 - $7,999)

0

0 0 0 0 1 0 0

Over -$8,000

7

5 3 3 2 1 1 1
Total Decrease Portions

11,797

85.97%

Average -$310 Median -$273

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

547

1027 1375 1655 1782 1824 1873 1890

$50 - $99

480

628 449 235 115 81 35 19

$100 - $149

348

169 70 15 11 6 8 11

$150 - $199

280

66 11 4 7 9 6 2

$200 - $249

127

7 3 6 7 2 0 0

$250 - $299

42

8 3 5 0 0 0 0

$300 - $349

49

3 5 2 0 0 0 0

$350 - $399

17

1 4 0 0 0 0 0

$400 - $449

4

2 2 0 0 0 0 0

$450 - $499

3

4 0 0 0 0 0 0

$500 - $599

8

5 0 0 0 0 0 0

$600 - $699

3

2 0 0 0 0 0 0

$700 - $799

1

0 0 0 0 0 0 0

$800 - $899

2

0 0 0 0 0 0 0

$900 - $999

4

0 0 0 0 0 0 0

$1,000 - $1,999

7

0 0 0 0 0 0 1

$2,000 - $2,999

0

0 0 0 0 1 1 0

$3,000 - $3,999

0

0 0 1 1 0 0 0

$4,000 - $4,999

0

0 0 0 0 0 0 1

$5,000 - $5,999

0

0 1 0 0 0 1 0

$6,000 - $6,999

0

0 0 0 0 1 0 0

$7,000 - $7,999

0

1 0 0 1 0 0 1

Over $8,000

4

3 3 3 2 2 2 1
Total Increase Portions

1,926

14.03%

Average $212 Median $91

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 08

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

883

1657 2310 2874 3731 4337 5180 5835

-($50 - $99)

774

1217 2027 2961 3142 3712 3514 3275

-($100 - $149)

653

1463 1928 2214 2046 1488 1258 1060

-($150 - $199)

564

1498 1784 1061 942 633 357 221

-($200 - $249)

857

1038 870 751 349 189 135 109

-($250 - $299)

606

1176 618 309 149 99 68 34

-($300 - $349)

843

645 415 139 85 54 25 43

-($350 - $399)

655

416 218 82 56 22 40 64

-($400 - $449)

430

427 113 67 27 35 57 53

-($450 - $499)

608

324 76 42 15 36 54 65

-($500 - $599)

1176

309 99 34 63 89 99 53

-($600 - $699)

645

139 54 43 83 93 28 13

-($700 - $799)

416

82 22 64 71 25 10 2

-($800 - $899)

427

67 35 53 48 11 1 1

-($900 - $999)

324

42 36 65 9 3 2 6

-($1,000 - $1,999)

639

259 221 75 53 60 58 54

-($2,000 - $2,999)

105

67 35 52 18 4 6 4

-($3,000 - $3,999)

154

8 25 2 4 2 0 0

-($4,000 - $4,999)

57

35 1 3 1 0 1 1

-($5,000 - $5,999)

10

17 3 1 0 1 0 1

-($6,000 - $6,999)

2

0 2 0 1 0 1 0

-($7,000 - $7,999)

6

2 0 0 0 1 0 0

Over -$8,000

62

8 4 4 3 2 2 2
Total Decrease Portions

10,896

63.23%

Average -$619 Median -$373

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

957

1587 2181 2693 3181 3677 4047 4428

$50 - $99

630

1106 1496 1735 1812 1792 1744 1534

$100 - $149

594

984 1036 1041 900 593 346 215

$150 - $199

512

751 756 493 232 115 77 58

$200 - $249

488

565 424 163 59 50 38 49

$250 - $299

496

476 169 52 43 32 41 28

$300 - $349

370

322 75 37 25 34 22 10

$350 - $399

381

171 40 21 32 19 7 4

$400 - $449

285

100 28 24 23 7 4 3

$450 - $499

280

63 22 25 8 7 2 1

$500 - $599

476

52 32 28 11 3 2 1

$600 - $699

322

37 34 10 2 1 2 1

$700 - $799

171

21 19 4 2 1 0 1

$800 - $899

100

24 7 3 1 1 1 1

$900 - $999

63

25 7 1 1 1 1 0

$1,000 - $1,999

159

46 7 4 3 2 2 2

$2,000 - $2,999

42

3 2 1 1 2 1 1

$3,000 - $3,999

4

1 0 1 1 0 0 0

$4,000 - $4,999

2

1 1 1 0 0 0 0

$5,000 - $5,999

1

0 1 0 0 0 0 0

$6,000 - $6,999

1

1 0 0 0 0 0 0

$7,000 - $7,999

0

0 0 0 0 0

Over $8,000

3

1
Total Increase Portions

6,337

36.77%

Average $335 Median $248

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 09

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

262

478 647 837 1091 1271 1448 1614

-($50 - $99)

216

359 624 777 846 905 938 932

-($100 - $149)

169

434 529 562 534 516 502 464

-($150 - $199)

190

343 376 370 361 318 217 140

-($200 - $249)

254

323 295 286 208 119 71 51

-($250 - $299)

180

239 221 178 89 52 38 26

-($300 - $349)

177

210 196 95 47 33 15 43

-($350 - $399)

166

160 122 45 25 13 41 23

-($400 - $449)

186

146 79 31 21 40 21 20

-($450 - $499)

137

140 40 20 11 14 14 24

-($500 - $599)

239

178 52 26 48 32 39 22

-($600 - $699)

210

95 33 43 24 31 15 6

-($700 - $799)

160

45 13 23 32 15 6 8

-($800 - $899)

146

31 40 20 14 4 4 4

-($900 - $999)

140

20 14 24 10 4 7 6

-($1,000 - $1,999)

369

136 86 46 24 19 10 3

-($2,000 - $2,999)

80

30 17 3 1 0 1 1

-($3,000 - $3,999)

56

16 2 0 0 1 1 1

-($4,000 - $4,999)

24

2 0 0 1 1 0 0

-($5,000 - $5,999)

6

1 0 1 1 0 0 0

-($6,000 - $6,999)

9

0 1 1 0 0 0 0

-($7,000 - $7,999)

7

0 0 0 0 0 0 0

Over -$8,000

8

5 4 3 3 3 3 3
Total Decrease Portions

3,391

20.01%

Average -$859 Median -$427

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

308

571 948 1294 1776 2132 2468 2850

$50 - $99

263

723 1184 1556 1912 2337 2800 3207

$100 - $149

377

838 1147 1619 1957 2300 2472 2413

$150 - $199

346

718 1190 1588 1766 1701 1503 1274

$200 - $249

482

838 1176 1354 1332 1034 787 747

$250 - $299

356

781 1124 1059 761 626 613 595

$300 - $349

336

799 971 773 526 513 511 530

$350 - $399

382

789 730 501 461 443 462 430

$400 - $449

429

712 635 386 391 394 383 369

$450 - $499

409

642 399 361 355 356 340 248

$500 - $599

781

1059 626 595 599 579 409 295

$600 - $699

799

773 513 530 503 333 242 180

$700 - $799

789

501 443 430 324 210 148 79

$800 - $899

712

386 394 369 210 149 71 63

$900 - $999

642

361 356 248 144 88 59 33

$1,000 - $1,999

3080

2172 1359 650 357 206 148 114

$2,000 - $2,999

1345

532 153 88 48 46 62 78

$3,000 - $3,999

827

118 53 26 47 58 47 29

$4,000 - $4,999

354

61 21 42 40 25 12 14

$5,000 - $5,999

178

27 25 36 21 13 12 3

$6,000 - $6,999

73

15 31 20 7 6 2 2

$7,000 - $7,999

45

11 27 9 11 2 2 0

Over $8,000

242

128 50 21 7 4 2 2
Total Increase Portions

13,555

79.99%

Average $1,650 Median $901

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 10

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

480

906 1364 1694 1964 2111 2243 2321

-($50 - $99)

426

788 747 627 493 428 324 289

-($100 - $149)

458

417 281 218 128 107 110 103

-($150 - $199)

330

210 147 71 80 67 62 41

-($200 - $249)

270

136 46 55 57 31 29 26

-($250 - $299)

147

82 61 48 22 28 16 13

-($300 - $349)

132

28 31 26 24 12 11 5

-($350 - $399)

78

43 36 15 12 9 3 14

-($400 - $449)

71

36 22 18 11 4 14 9

-($450 - $499)

65

19 9 8 4 13 9 4

-($500 - $599)

82

48 28 13 15 11 4 1

-($600 - $699)

28

26 12 5 11 4 1 0

-($700 - $799)

43

15 9 14 4 1 0 1

-($800 - $899)

36

18 4 9 1 0 1 1

-($900 - $999)

19

8 13 4 0 0 1 0

-($1,000 - $1,999)

115

45 16 3 2 2 0 0

-($2,000 - $2,999)

30

1 2 0 0 1 1 1

-($3,000 - $3,999)

15

2 0 0 1 0 0 0

-($4,000 - $4,999)

1

0 0 1 0 0 0 1

-($5,000 - $5,999)

0

0 1 0 0 0 1 0

-($6,000 - $6,999)

2

0 0 0 0 1 0 0

-($7,000 - $7,999)

0

0 0 0 1 0 0 0

Over -$8,000

3

3 2 2 1 1 1 1
Total Decrease Portions

2,831

12.96%

Average -$370 Median -$166

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

487

981 1547 2372 3221 4104 5347 6344

$50 - $99

494

1391 2557 3972 5380 6595 7413 7688

$100 - $149

566

1732 3331 4355 4865 4335 3259 2785

$150 - $199

825

2240 3264 3333 2243 1783 1642 1375

$200 - $249

849

2257 2767 1677 1333 1146 770 476

$250 - $299

883

2098 1568 1108 921 520 305 156

$300 - $349

1243

2061 985 844 468 253 107 84

$350 - $399

997

1272 798 531 237 88 65 25

$400 - $449

1091

1002 642 291 119 77 23 43

$450 - $499

1166

675 504 185 83 20 37 2

$500 - $599

2098

1108 520 156 51 55 10 1

$600 - $699

2061

844 253 84 47 2 1 3

$700 - $799

1272

531 88 25 10 1 3 2

$800 - $899

1002

291 77 43 0 1 2 6

$900 - $999

675

185 20 2 2 3 6 5

$1,000 - $1,999

2959

310 62 17 22 21 14 9

$2,000 - $2,999

253

5 16 9 2 1 2 3

$3,000 - $3,999

57

12 5 0 1 2 1 0

$4,000 - $4,999

2

7 0 1 2 0 0 0

$5,000 - $5,999

3

2 1 2 0 0 0 0

$6,000 - $6,999

7

0 1 0 0 0 0 1

$7,000 - $7,999

5

0 1 0 0 0 1 0

Over $8,000

17

8 5 5 5 5 4 4
Total Increase Portions

19,012

87.04%

Average $675 Median $541

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 11

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

869

1950 3239 4099 5000 5699 6254 7163

-($50 - $99)

1081

2149 2460 3064 3847 4000 4301 3809

-($100 - $149)

1289

1600 2199 2536 2012 1364 667 292

-($150 - $199)

860

1464 1801 1273 328 201 56 20

-($200 - $249)

901

1684 1160 215 80 16 15 19

-($250 - $299)

699

852 204 77 13 15 12 13

-($300 - $349)

555

856 159 14 13 10 12 5

-($350 - $399)

909

417 42 6 10 11 4 2

-($400 - $449)

735

91 11 11 7 4 2 4

-($450 - $499)

949

124 5 8 7 3 4 1

-($500 - $599)

852

77 15 13 6 4 1 0

-($600 - $699)

856

14 10 5 4 1 0 2

-($700 - $799)

417

6 11 2 1 0 2 0

-($800 - $899)

91

11 4 4 0 2 0 1

-($900 - $999)

124

8 3 1 0 0 0 1

-($1,000 - $1,999)

116

25 7 4 5 5 6 5

-($2,000 - $2,999)

20

2 2 3 3 2 1 0

-($3,000 - $3,999)

5

2 3 2 1 0 0 2

-($4,000 - $4,999)

0

1 1 0 0 2 2 0

-($5,000 - $5,999)

2

2 1 0 2 0 0 0

-($6,000 - $6,999)

0

1 0 0 0 0 0 0

-($7,000 - $7,999)

2

1 0 2 0 0 0 1

Over -$8,000

11

6 6 4 4 4 4 3
Total Decrease Portions

11,343

65.97%

Average -$427 Median -$297

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

921

1576 2225 2798 3384 3742 4083 4382

$50 - $99

655

1222 1517 1584 1499 1554 1473 1302

$100 - $149

649

944 903 914 753 443 226 121

$150 - $199

573

640 651 388 139 66 40 29

$200 - $249

586

501 340 91 35 23 12 4

$250 - $299

358

413 103 30 18 8 6 4

$300 - $349

341

260 43 17 6 4 2 2

$350 - $399

299

128 23 12 4 2 2 0

$400 - $449

263

55 12 2 2 2 0 1

$450 - $499

238

36 11 2 3 0 0 0

$500 - $599

413

30 8 4 1 1 1 0

$600 - $699

260

17 4 2 0 0 0 0

$700 - $799

128

12 2 0 1 0 0 0

$800 - $899

55

2 2 1 0 0 0 0

$900 - $999

36

2 0 0 0 0 0 0

$1,000 - $1,999

63

7 1 0 0 1 1 1

$2,000 - $2,999

6

0 0 1 1 0 1 1

$3,000 - $3,999

1

0 1 0 1 1 0 0

$4,000 - $4,999

0

0 0 1 0 0 0 0

$5,000 - $5,999

0

1 0 0 0 0 1 1

$6,000 - $6,999

0

0 1 0 0 1 0 0

$7,000 - $7,999

0

0 0 0 0 0 0 2

Over $8,000

7

6 5 5 5 4 4 2
Total Increase Portions

5,852

34.03%

Average $347 Median $215

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 12

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1381

2932 4176 5687 7035 8275 9396 10376

-($50 - $99)

1551

2755 4099 4689 4897 4675 4206 3694

-($100 - $149)

1244

2588 2956 2574 1941 1511 1299 1056

-($150 - $199)

1511

2101 1719 1120 873 665 372 222

-($200 - $249)

1348

1556 923 676 424 186 99 46

-($250 - $299)

1240

1018 588 380 142 66 25 12

-($300 - $349)

1121

652 440 147 60 19 12 9

-($350 - $399)

980

468 225 75 22 9 6 2

-($400 - $449)

855

391 122 30 9 7 2 1

-($450 - $499)

701

285 64 16 7 4 1 0

-($500 - $599)

1018

380 66 12 7 1 0 2

-($600 - $699)

652

147 19 9 1 0 2 0

-($700 - $799)

468

75 9 2 0 2 0 0

-($800 - $899)

391

30 7 1 0 0 0 3

-($900 - $999)

285

16 4 0 2 0 3 2

-($1,000 - $1,999)

648

24 3 7 5 5 2 1

-($2,000 - $2,999)

23

2 5 0 0 1 1 0

-($3,000 - $3,999)

1

5 0 1 1 0 0 0

-($4,000 - $4,999)

2

0 0 0 0 0 0 0

-($5,000 - $5,999)

0

0 1 0 0 0 0 0

-($6,000 - $6,999)

3

0 0 0 0 0 0 0

-($7,000 - $7,999)

2

1 0 0 0 0 0 0

Over -$8,000

3

2 2 2 2 2 2 2
Total Decrease Portions

15,428

74.17%

Average -$367 Median -$279

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1294

2040 2759 3283 3824 4161 4404 4593

$50 - $99

746

1243 1402 1310 978 763 623 491

$100 - $149

719

878 542 331 250 189 117 114

$150 - $199

524

432 221 160 78 85 89 95

$200 - $249

541

209 128 46 80 82 86 46

$250 - $299

337

122 61 68 70 42 29 17

$300 - $349

243

103 31 35 39 26 8 6

$350 - $399

189

57 54 60 20 8 6 3

$400 - $449

110

29 30 29 12 3 3 1

$450 - $499

99

17 52 17 6 6 0 2

$500 - $599

122

68 42 17 8 1 3 1

$600 - $699

103

35 26 6 0 2 1 1

$700 - $799

57

60 8 3 3 1 1 2

$800 - $899

29

29 3 1 0 0 2 0

$900 - $999

17

17 6 2 1 2 0 0

$1,000 - $1,999

209

29 6 4 4 2 2 2

$2,000 - $2,999

26

3 2 1 1 1 0 0

$3,000 - $3,999

3

1 0 1 0 0 0 0

$4,000 - $4,999

1

1 1 0 0 0 0 0

$5,000 - $5,999

2

0 0 0 0 0 0 0

$6,000 - $6,999

1

1 0 0 0 0 0 0

$7,000 - $7,999

0

0 0 0 0 0 0

Over $8,000

2

Total Increase Portions

5,374

25.83%

Average $252 Median $147

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 13

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1020

2405 4154 5809 7458 8849 10035 10947

-($50 - $99)

1385

3404 4695 5138 4723 4201 3651 3054

-($100 - $149)

1749

3040 2835 2103 1692 1125 672 454

-($150 - $199)

1655

2098 1366 951 441 280 159 119

-($200 - $249)

1649

1234 823 313 158 94 86 58

-($250 - $299)

1391

869 302 141 77 63 37 39

-($300 - $349)

1186

636 183 62 54 28 35 29

-($350 - $399)

912

315 97 57 29 31 25 10

-($400 - $449)

737

174 51 38 23 24 10 7

-($450 - $499)

497

139 43 20 27 11 6 3

-($500 - $599)

869

141 63 39 24 11 4 5

-($600 - $699)

636

62 28 29 10 3 5 2

-($700 - $799)

315

57 31 10 4 5 2 9

-($800 - $899)

174

38 24 7 2 1 8 11

-($900 - $999)

139

20 11 3 4 4 10 2

-($1,000 - $1,999)

318

88 24 29 26 22 10 6

-($2,000 - $2,999)

74

10 21 3 3 3 0 0

-($3,000 - $3,999)

14

19 1 3 0 0 0 1

-($4,000 - $4,999)

6

3 3 0 0 1 1 1

-($5,000 - $5,999)

4

0 0 0 1 1 2 1

-($6,000 - $6,999)

15

3 0 0 0 1 0 1

-($7,000 - $7,999)

4

0 0 1 1 0 1 0

Over -$8,000

12

6 6 5 4 3 2 2
Total Decrease Portions

14,761

67.06%

Average -$365 Median -$248

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

965

1772 2612 3343 3941 4429 4777 5088

$50 - $99

807

1571 1817 1745 1612 1444 1369 1233

$100 - $149

840

1086 905 785 690 594 546 514

$150 - $199

731

659 539 448 409 368 277 232

$200 - $249

598

465 370 331 217 197 131 85

$250 - $299

488

320 224 183 163 82 69 49

$300 - $349

348

273 225 134 68 55 36 20

$350 - $399

311

175 143 98 52 32 16 9

$400 - $449

246

146 105 47 39 17 9 7

$450 - $499

219

185 92 38 19 10 6 4

$500 - $599

320

183 82 49 18 9 5 0

$600 - $699

273

134 55 20 8 4 1 5

$700 - $799

175

98 32 9 5 0 4 1

$800 - $899

146

47 17 7 0 5 1 1

$900 - $999

185

38 10 4 1 0 1 1

$1,000 - $1,999

500

89 18 8 7 4 2 1

$2,000 - $2,999

76

5 3 1 1 0 0 0

$3,000 - $3,999

13

3 1 0 0 0 0 0

$4,000 - $4,999

1

0 0 0 0 0 0 0

$5,000 - $5,999

4

1 0 0 0 0 0 0

$6,000 - $6,999

2

0 0 0 0 0 0 0

$7,000 - $7,999

1

0 0 0 0 0 0 0

Over $8,000

2

1 1 1 1 1 1 1
Total Increase Portions

7,251

32.94%

Average $440 Median $220

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 14

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

857

2028 3292 4798 6150 7276 8202 9000

-($50 - $99)

1171

2770 3984 4202 3998 3756 3446 3127

-($100 - $149)

1264

2478 2363 2032 1760 1403 1003 587

-($150 - $199)

1506

1724 1393 1095 697 279 94 100

-($200 - $249)

1352

1148 876 478 120 38 154 100

-($250 - $299)

1126

884 527 109 27 150 19 4

-($300 - $349)

926

616 216 31 147 16 0 0

-($350 - $399)

798

479 63 69 15 0 0 1

-($400 - $449)

639

308 27 88 4 0 1 1

-($450 - $499)

509

170 11 12 0 0 1 0

-($500 - $599)

884

109 150 4 0 2 1 1

-($600 - $699)

616

31 16 0 2 1 0 1

-($700 - $799)

479

69 0 1 0 0 1 0

-($800 - $899)

308

88 0 1 1 1 0 0

-($900 - $999)

170

12 0 0 0 0 0 0

-($1,000 - $1,999)

309

6 4 2 2 2 2 2

-($2,000 - $2,999)

4

2 0 2 1 1 1 1

-($3,000 - $3,999)

2

0 2 0 1 0 0 0

-($4,000 - $4,999)

1

1 0 1 0 0 0 0

-($5,000 - $5,999)

1

1 1 0 0 0 0 0

-($6,000 - $6,999)

-($7,000 - $7,999)
Over -$8,000

4

2 1 1 1 1 1 1
Total Decrease Portions

12,926

87.05%

Average -$349 Median -$261

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

586

1069 1617 1753 1789 1819 1841 1857

$50 - $99

483

684 202 104 84 73 58 46

$100 - $149

548

66 48 35 29 14 12 13

$150 - $199

136

38 25 11 7 10 7 3

$200 - $249

36

16 10 6 8 3 1 0

$250 - $299

30

19 4 7 2 0 0 0

$300 - $349

22

7 5 2 0 0 0 2

$350 - $399

16

4 5 1 0 0 2 0

$400 - $449

10

3 1 0 0 2 0 0

$450 - $499

6

3 2 0 0 0 0 0

$500 - $599

19

7 0 0 2 0 0 1

$600 - $699

7

2 0 2 0 0 1 0

$700 - $799

4

1 0 0 0 1 0 0

$800 - $899

3

0 2 0 1 0 0 0

$900 - $999

3

0 0 0 0 0 0 0

$1,000 - $1,999

10

2 1 1 0 0 0 0

$2,000 - $2,999

2

1 0 0 0 0 0 0

$3,000 - $3,999

0

0 0 0 0 0 0

$4,000 - $4,999

1

$5,000 - $5,999

$6,000 - $6,999
$7,000 - $7,999
Over $8,000

1

1 1 1 1 1 1 1
Total Increase Portions

1,923

12.95%

Average $201 Median $78

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 15

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1098

2745 5356 8810 12021 14923 17220 18634

-($50 - $99)

1647

6065 9567 9824 8359 6547 4721 3538

-($100 - $149)

2611

6113 4666 2836 1697 870 529 405

-($150 - $199)

3454

3711 1881 702 361 237 146 73

-($200 - $249)

3211

1746 607 266 155 61 49 30

-($250 - $299)

2902

1090 263 139 45 28 28 23

-($300 - $349)

2297

471 130 39 27 27 12 11

-($350 - $399)

1414

231 107 34 15 10 9 3

-($400 - $449)

955

168 33 16 19 8 3 3

-($450 - $499)

791

98 28 14 7 5 3 1

-($500 - $599)

1090

139 28 23 10 4 1 7

-($600 - $699)

471

39 27 11 4 1 7 3

-($700 - $799)

231

34 10 3 1 7 3 4

-($800 - $899)

168

16 8 3 1 3 3 4

-($900 - $999)

98

14 5 1 6 3 5 1

-($1,000 - $1,999)

242

41 18 19 14 9 4 3

-($2,000 - $2,999)

36

13 7 3 1 0 0 0

-($3,000 - $3,999)

5

6 2 0 0 0 0 2

-($4,000 - $4,999)

7

2 0 0 0 1 3 1

-($5,000 - $5,999)

6

1 0 0 1 2 0 0

-($6,000 - $6,999)

5

0 0 0 2 0 1 1

-($7,000 - $7,999)

1

0 0 2 0 0 0 1

Over -$8,000

10

7 7 5 4 4 3 2
Total Decrease Portions

22,750

93.64%

Average -$312 Median -$239

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

490

789 1001 1113 1268 1366 1412 1436

$50 - $99

299

324 365 323 195 120 98 87

$100 - $149

212

253 84 50 55 42 23 12

$150 - $199

112

70 36 37 14 7 5 4

$200 - $249

155

27 32 9 4 3 1 1

$250 - $299

98

23 10 3 2 1 1 0

$300 - $349

46

24 5 3 1 1 0 0

$350 - $399

24

13 2 1 1 0 0 0

$400 - $449

14

5 3 0 0 0 0 0

$450 - $499

13

4 0 1 0 0 0 0

$500 - $599

23

3 1 0 0 0 0 0

$600 - $699

24

3 1 0 0 0 0 0

$700 - $799

13

1 0 0 0 0 0 0

$800 - $899

5

0 0 0 0 0 0 1

$900 - $999

4

1 0 0 0 0 1 0

$1,000 - $1,999

8

0 0 1 1 1 0 0

$2,000 - $2,999

0

0 1 0 0 0 0 0

$3,000 - $3,999

0

1 0 0 0 0 0 0

$4,000 - $4,999

0

0 0 0 0 0 1 1

$5,000 - $5,999

0

0 0 0 0 1 0 0

$6,000 - $6,999

$7,000 - $7,999

1

0 0 0 1 0 0 0

Over $8,000

3

3 3 3 2 2 2 2
Total Increase Portions

1,544

6.36%

Average $264 Median $97

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 16

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

425

928 1807 3315 4852 6733 8671 10099

-($50 - $99)

503

2387 4926 6784 7522 7504 7243 6977

-($100 - $149)

879

3418 4596 4138 4181 3626 2903 2263

-($150 - $199)

1508

3366 2908 2839 1970 1476 1001 755

-($200 - $249)

1537

2275 2318 1449 969 673 352 133

-($250 - $299)

1881

1863 1308 814 518 180 71 28

-($300 - $349)

1938

1677 954 479 158 49 15 15

-($350 - $399)

1428

1162 522 276 57 14 14 3

-($400 - $449)

1230

787 393 98 22 11 3 3

-($450 - $499)

1045

662 280 35 11 6 3 0

-($500 - $599)

1863

814 180 28 12 4 1 1

-($600 - $699)

1677

479 49 15 4 1 0 0

-($700 - $799)

1162

276 14 3 0 0 0 0

-($800 - $899)

787

98 11 3 1 0 0 1

-($900 - $999)

662

35 6 0 0 0 1 1

-($1,000 - $1,999)

1702

49 5 3 3 3 4 3

-($2,000 - $2,999)

45

1 3 1 2 2 0 0

-($3,000 - $3,999)

4

2 0 2 0 0 0 1

-($4,000 - $4,999)

1

1 2 0 0 1 2 1

-($5,000 - $5,999)

0

0 0 0 1 1 0 3

-($6,000 - $6,999)

1

2 0 0 1 0 3 0

-($7,000 - $7,999)

1

0 0 1 0 3 0 0

Over -$8,000

8

5 5 4 3 0 0 0
Total Decrease Portions

20,287

90.35%

Average -$505 Median -$402

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

392

600 785 934 1039 1127 1206 1309

$50 - $99

208

334 342 375 447 525 631 633

$100 - $149

185

193 304 343 392 367 242 156

$150 - $199

149

182 221 290 193 79 47 38

$200 - $249

105

177 226 129 38 33 14 8

$250 - $299

88

166 141 27 22 9 5 4

$300 - $349

79

185 60 28 9 5 3 1

$350 - $399

103

105 19 10 4 3 1 0

$400 - $449

122

77 23 4 1 1 0 1

$450 - $499

55

52 10 4 3 0 1 0

$500 - $599

166

27 9 4 1 1 1 1

$600 - $699

185

28 5 1 1 1 0 0

$700 - $799

105

10 3 0 0 0 0 1

$800 - $899

77

4 1 1 1 0 1 2

$900 - $999

52

4 0 0 0 0 2 0

$1,000 - $1,999

73

6 2 4 6 7 6 7

$2,000 - $2,999

5

1 4 4 3 3 1 0

$3,000 - $3,999

1

3 3 3 1 0 1 1

$4,000 - $4,999

1

3 2 0 0 1 0 0

$5,000 - $5,999

0

1 1 0 1 0 1 1

$6,000 - $6,999

3

2 0 1 0 1 0 0

$7,000 - $7,999

0

1 0 0 0 0 0 0

Over $8,000

12

5 5 4 4 3 3 3
Total Increase Portions

2,166

9.65%

Average $619 Median $275

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 17

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

600

1547 2706 4584 6335 7594 8570 9729

-($50 - $99)

947

3037 4888 5145 5561 6590 7477 7647

-($100 - $149)

1159

3010 3125 4455 4860 3941 2682 1546

-($150 - $199)

1878

2135 3465 3192 1800 797 259 93

-($200 - $249)

1751

2167 2572 1180 395 82 31 6

-($250 - $299)

1259

2288 1369 366 53 15 3 11

-($300 - $349)

976

1863 604 66 15 3 11 3

-($350 - $399)

1159

1329 193 27 2 10 2 1

-($400 - $449)

990

749 55 4 1 3 1 1

-($450 - $499)

1177

431 27 2 12 1 1 0

-($500 - $599)

2288

366 15 11 2 1 0 0

-($600 - $699)

1863

66 3 3 1 0 0 0

-($700 - $799)

1329

27 10 1 0 0 0 0

-($800 - $899)

749

4 3 1 0 0 0 0

-($900 - $999)

431

2 1 0 0 0 0 0

-($1,000 - $1,999)

465

16 1 0 0 0 0 0

-($2,000 - $2,999)

15

0 0 0 0 0 0 0

-($3,000 - $3,999)

1

0 0 0 0 0 0 0

-($4,000 - $4,999)

0

0 0 0 0 0 0 1

-($5,000 - $5,999)

0

0 0 0 0 0 1 1

-($6,000 - $6,999)

0

0 0 0 0 1 1 0

-($7,000 - $7,999)

3

3 3 3 3 2 1 1

Over -$8,000

450

225 164 137 118 102 89 72
Total Decrease Portions

19,040

88.07%

Average -$437 Median -$396

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

605

1138 1541 1814 1966 2109 2234 2336

$50 - $99

533

676 568 522 468 370 267 172

$100 - $149

403

295 283 143 71 34 19 18

$150 - $199

273

227 87 29 10 13 16 21

$200 - $249

152

98 26 7 14 17 16 11

$250 - $299

143

45 8 11 14 10 8 5

$300 - $349

125

22 7 10 9 7 5 5

$350 - $399

102

7 6 11 6 3 3 3

$400 - $449

56

5 9 6 3 5 2 0

$450 - $499

42

2 8 5 6 2 1 1

$500 - $599

45

11 10 5 3 1 1 0

$600 - $699

22

10 7 5 1 1 0 0

$700 - $799

7

11 3 3 1 0 0 0

$800 - $899

5

6 5 0 0 0 0 0

$900 - $999

2

5 2 1 0 0 0 0

$1,000 - $1,999

43

14 2 0 0 2 4 4

$2,000 - $2,999

12

0 0 2 4 2 0 0

$3,000 - $3,999

2

0 2 2 0 0 1 1

$4,000 - $4,999

0

0 2 0 0 1 0 0

$5,000 - $5,999

0

2 0 0 1 0 0 1

$6,000 - $6,999

0

2 0 1 0 0 1 0

$7,000 - $7,999

0

0 0 0 0 1 0 0

Over $8,000

7

3 3 2 2 1 1 1
Total Increase Portions

2,579

11.93%

Average $265 Median $121

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 18

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

148

341 688 1101 1783 3222 4755 7256

-($50 - $99)

193

760 2534 6155 10437 13015 15014 14622

-($100 - $149)

347

2121 6635 8981 8802 6656 3816 2327

-($150 - $199)

413

4034 6380 5641 2349 1312 841 339

-($200 - $249)

682

4964 4785 1493 914 313 177 127

-($250 - $299)

1439

4017 1871 834 233 101 181 178

-($300 - $349)

1533

3532 692 221 85 165 72 189

-($350 - $399)

2501

2109 620 118 68 65 182 11

-($400 - $449)

2601

1015 174 75 174 161 11 2

-($450 - $499)

2363

478 139 52 11 39 2 1

-($500 - $599)

4017

834 101 178 193 2 1 1

-($600 - $699)

3532

221 165 189 2 1 3 4

-($700 - $799)

2109

118 65 11 1 1 2 2

-($800 - $899)

1015

75 161 2 1 4 2 1

-($900 - $999)

478

52 39 1 2 0 1 2

-($1,000 - $1,999)

1300

381 8 10 7 6 3 4

-($2,000 - $2,999)

378

5 5 1 3 4 5 2

-($3,000 - $3,999)

3

5 1 3 3 1 1 2

-($4,000 - $4,999)

3

0 2 2 0 2 2 1

-($5,000 - $5,999)

2

1 2 0 2 1 0 0

-($6,000 - $6,999)

3

0 1 1 1 0 0 2

-($7,000 - $7,999)

2

3 0 1 0 0 2 0

Over -$8,000

14

10 8 6 5 5 3 3
Total Decrease Portions

25,076

97.55%

Average -$594 Median -$508

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

87

145 200 236 267 307 349 392

$50 - $99

58

91 107 156 180 165 138 107

$100 - $149

55

71 116 80 46 45 59 58

$150 - $199

36

85 49 27 33 40 17 12

$200 - $249

31

55 21 27 32 7 10 9

$250 - $299

40

25 24 31 6 9 7 7

$300 - $349

42

15 29 6 9 7 5 2

$350 - $399

43

12 11 6 5 5 2 2

$400 - $449

31

18 5 4 6 1 2 5

$450 - $499

24

9 2 5 2 3 5 2

$500 - $599

25

31 9 7 3 5 3 2

$600 - $699

15

6 7 2 5 3 1 5

$700 - $799

12

6 5 2 2 1 5 1

$800 - $899

18

4 1 5 2 3 1 1

$900 - $999

9

5 3 2 1 2 1 3

$1,000 - $1,999

52

18 14 12 12 8 9 8

$2,000 - $2,999

11

7 8 3 3 5 3 3

$3,000 - $3,999

7

5 0 5 2 3 3 4

$4,000 - $4,999

3

3 3 0 3 2 3 2

$5,000 - $5,999

4

0 2 3 2 3 2 0

$6,000 - $6,999

2

3 1 1 2 1 1 2

$7,000 - $7,999

3

2 2 3 2 0 1 0

Over $8,000

22

14 11 7 5 5 3 3
Total Increase Portions

630

2.45%

Average $2,638 Median $312

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 19

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

546

1144 1631 1944 2272 2489 2669 2847

-($50 - $99)

598

800 858 903 888 959 1066 1093

-($100 - $149)

487

545 523 601 672 662 598 571

-($150 - $199)

313

358 436 492 435 401 458 425

-($200 - $249)

328

313 384 327 300 357 213 165

-($250 - $299)

217

288 278 244 301 156 121 71

-($300 - $349)

180

287 223 280 136 101 56 64

-($350 - $399)

178

205 178 145 97 47 55 43

-($400 - $449)

165

170 212 88 49 55 36 21

-($450 - $499)

148

157 145 77 40 31 26 20

-($500 - $599)

288

244 156 71 68 42 26 24

-($600 - $699)

287

280 101 64 40 24 21 15

-($700 - $799)

205

145 47 43 22 20 14 6

-($800 - $899)

170

88 55 21 15 11 4 10

-($900 - $999)

157

77 31 20 12 7 9 2

-($1,000 - $1,999)

834

219 104 57 39 28 22 17

-($2,000 - $2,999)

157

42 18 13 8 6 2 2

-($3,000 - $3,999)

62

15 10 4 2 0 1 2

-($4,000 - $4,999)

27

9 4 2 1 2 1 1

-($5,000 - $5,999)

15

4 2 0 1 0 1 0

-($6,000 - $6,999)

10

4 0 1 0 1 0 0

-($7,000 - $7,999)

5

0 0 1 1 0 0 0

Over -$8,000

23

6 4 2 1 1 1 1
Total Decrease Portions

5,400

31.92%

Average -$701 Median -$357

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

550

1192 1973 2888 3635 4476 5175 5790

$50 - $99

642

1696 2503 2902 3305 3452 3626 3716

$100 - $149

781

1588 1885 2138 2227 2103 1763 1374

$150 - $199

915

1314 1567 1578 1253 849 579 396

$200 - $249

747

1150 1239 914 552 348 185 117

$250 - $299

841

988 864 460 256 120 81 55

$300 - $349

699

873 533 263 100 61 46 33

$350 - $399

615

705 316 133 65 39 26 14

$400 - $449

571

525 225 72 39 31 12 3

$450 - $499

579

389 123 45 28 7 4 4

$500 - $599

988

460 120 55 26 12 8 7

$600 - $699

873

263 61 33 11 7 4 0

$700 - $799

705

133 39 14 5 4 0 0

$800 - $899

525

72 31 3 5 0 0 0

$900 - $999

389

45 7 4 2 0 0 1

$1,000 - $1,999

973

109 23 8 2 3 5 4

$2,000 - $2,999

93

7 2 2 3 2 1 1

$3,000 - $3,999

16

1 1 2 1 1 0 0

$4,000 - $4,999

7

1 2 1 0 0 0 0

$5,000 - $5,999

0

1 0 0 0 0 0 0

$6,000 - $6,999

0

2 1 0 0 0 0 0

$7,000 - $7,999

1

0 0 0 0 0 0 0

Over $8,000

6

2 1 1 1 1 1 1
Total Increase Portions

11,516

68.08%

Average $508 Median $398

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 20

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

404

697 1015 1291 1648 1847 2058 2210

-($50 - $99)

293

594 832 919 963 1041 1025 983

-($100 - $149)

318

556 587 678 530 404 359 324

-($150 - $199)

276

363 454 305 233 225 167 150

-($200 - $249)

357

401 253 181 167 115 100 107

-($250 - $299)

199

277 151 143 91 86 84 64

-($300 - $349)

211

195 150 92 77 75 53 47

-($350 - $399)

152

110 75 58 65 45 39 47

-($400 - $449)

224

99 66 51 43 39 45 21

-($450 - $499)

177

82 49 56 33 31 18 3

-($500 - $599)

277

143 86 64 58 45 9 10

-($600 - $699)

195

92 75 47 40 4 9 5

-($700 - $799)

110

58 45 47 8 9 5 2

-($800 - $899)

99

51 39 21 4 4 0 6

-($900 - $999)

82

56 31 3 6 1 5 0

-($1,000 - $1,999)

400

182 63 23 17 12 7 5

-($2,000 - $2,999)

134

15 11 4 0 2 3 2

-($3,000 - $3,999)

48

8 1 1 2 1 0 0

-($4,000 - $4,999)

10

4 0 1 1 0 0 0

-($5,000 - $5,999)

5

0 2 1 0 0 0 0

-($6,000 - $6,999)

5

0 1 0 0 0 0 0

-($7,000 - $7,999)

3

1 0 0 0 0 0 0

Over -$8,000

7

2 0 0 0 0 0 0
Total Decrease Portions

3,986

26.41%

Average -$585 Median -$331

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

361

734 1137 1562 1988 2484 3010 3562

$50 - $99

373

828 1347 2000 2781 3507 4207 4719

$100 - $149

403

922 1684 2429 2983 3187 2797 2263

$150 - $199

425

1078 1823 2290 2046 1366 865 474

$200 - $249

426

1207 1761 1517 848 419 178 67

$250 - $299

496

1222 1426 746 317 102 36 14

$300 - $349

526

1226 836 335 94 28 6 6

$350 - $399

552

1064 530 139 28 6 6 2

$400 - $449

606

897 268 47 13 5 2 0

$450 - $499

601

620 151 20 2 3 0 0

$500 - $599

1222

746 102 14 7 0 0 0

$600 - $699

1226

335 28 6 0 0 0 0

$700 - $799

1064

139 6 2 0 0 0 0

$800 - $899

897

47 5 0 0 0 0 1

$900 - $999

620

20 3 0 0 0 1 0

$1,000 - $1,999

1287

22 0 1 1 1 0 0

$2,000 - $2,999

22

0 1 0 0 0 0 1

$3,000 - $3,999

0

1 0 0 0 1 1 0

$4,000 - $4,999

0

0 0 0 1 0 0 0

$5,000 - $5,999

0

0 0 1 0 0 0 0

$6,000 - $6,999

1

0 0 0 0 0 0 0

$7,000 - $7,999

0

0 1 0 0 0 0 0

Over $8,000

1

1 0 0 0 0 0 0
Total Increase Portions

11,109

73.59%

Average $593 Median $565

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 21

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

1068

2001 2797 3455 3938 4295 4611 4867

-($50 - $99)

933

1454 1498 1412 1430 1438 1423 1412

-($100 - $149)

796

840 844 866 791 749 651 555

-($150 - $199)

658

572 594 546 463 352 279 242

-($200 - $249)

483

501 426 343 247 196 149 97

-($250 - $299)

357

365 323 212 161 94 81 73

-($300 - $349)

316

301 203 130 83 70 57 43

-($350 - $399)

256

245 149 112 60 52 38 19

-($400 - $449)

272

203 102 48 49 37 17 22

-($450 - $499)

229

140 94 49 33 20 18 10

-($500 - $599)

365

212 94 73 48 27 23 15

-($600 - $699)

301

130 70 43 21 17 9 7

-($700 - $799)

245

112 52 19 16 8 6 6

-($800 - $899)

203

48 37 22 12 5 5 3

-($900 - $999)

140

49 20 10 4 3 4 1

-($1,000 - $1,999)

551

167 60 32 20 13 5 6

-($2,000 - $2,999)

130

23 11 4 1 2 2 3

-($3,000 - $3,999)

37

9 2 2 1 3 3 0

-($4,000 - $4,999)

16

4 1 0 3 0 0 0

-($5,000 - $5,999)

7

0 1 3 0 0 0 0

-($6,000 - $6,999)

8

0 0 0 0 0 0 1

-($7,000 - $7,999)

1

2 3 0 0 0 1 1

Over -$8,000

12

6 3 3 3 3 2 1
Total Decrease Portions

7,384

39.29%

Average -$476 Median -$222

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1232

2414 3521 4536 5484 6333 7100 7737

$50 - $99

1182

2122 2812 3201 3369 3308 3131 2881

$100 - $149

1107

1797 1969 1904 1594 1228 840 669

$150 - $199

1015

1404 1339 977 563 418 280 96

$200 - $249

948

1116 806 392 311 82 37 10

$250 - $299

849

788 422 277 48 21 11 9

$300 - $349

767

590 202 64 19 9 4 1

$350 - $399

637

387 216 32 5 3 0 2

$400 - $449

565

251 59 7 8 1 2 1

$450 - $499

551

141 23 3 2 2 1 0

$500 - $599

788

277 21 9 2 1 0 0

$600 - $699

590

64 9 1 1 0 0 0

$700 - $799

387

32 3 2 0 0 0 0

$800 - $899

251

7 1 1 0 0 0 0

$900 - $999

141

3 2 0 0 0 0 0

$1,000 - $1,999

383

13 1 0 0 0 0 0

$2,000 - $2,999

12

0 0 0 0 0 0 1

$3,000 - $3,999

1

0 0 0 0 1 1 0

$4,000 - $4,999

0

0 0 0 1 0 0 0

$5,000 - $5,999

0

0 0 1 0 0 0 1

$6,000 - $6,999

0

0 0 0 0 0 1 0

$7,000 - $7,999

0

0 1 0 0 1 0 0

Over $8,000

2

2 1 1 1 0 0 0
Total Increase Portions

11,408

60.71%

Average $339 Median $263

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 22

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

79

189 320 417 510 560 607 657

-($50 - $99)

110

228 240 240 255 292 301 299

-($100 - $149)

131

143 149 195 170 151 150 158

-($150 - $199)

97

97 143 104 106 111 122 104

-($200 - $249)

93

108 83 85 96 85 64 58

-($250 - $299)

50

87 68 73 62 53 48 69

-($300 - $349)

47

56 55 66 45 40 60 45

-($350 - $399)

50

48 56 38 32 53 38 48

-($400 - $449)

52

47 57 34 40 36 35 50

-($450 - $499)

56

38 28 24 41 31 55 46

-($500 - $599)

87

73 53 69 55 76 73 53

-($600 - $699)

56

66 40 45 68 65 39 14

-($700 - $799)

48

38 53 48 54 34 9 10

-($800 - $899)

47

34 36 50 33 9 9 1

-($900 - $999)

38

24 31 46 26 7 2 3

-($1,000 - $1,999)

235

258 191 81 24 14 6 3

-($2,000 - $2,999)

136

69 14 2 1 1 0 0

-($3,000 - $3,999)

122

12 0 1 0 0 1 1

-($4,000 - $4,999)

59

2 1 0 0 1 0 0

-($5,000 - $5,999)

10

0 0 0 1 0 0 0

-($6,000 - $6,999)

9

1 0 1 0 0 0 0

-($7,000 - $7,999)

3

0 0 0 0 0 0 2

Over -$8,000

8

5 5 4 4 4 4 2
Total Decrease Portions

1,623

8.40%

Average -$1,415 Median -$556

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

112

256 399 613 776 976 1239 1502

$50 - $99

144

357 577 889 1329 1841 2516 3488

$100 - $149

143

363 822 1315 2216 3630 5078 5930

$150 - $199

214

526 1019 2173 3743 4473 4111 3479

$200 - $249

163

603 1504 3074 3415 2818 2179 1537

$250 - $299

200

712 2126 2856 2259 1589 1036 766

$300 - $349

263

938 2386 2024 1385 832 619 445

$350 - $399

263

1235 2087 1455 813 543 369 255

$400 - $449

296

1457 1572 928 521 358 233 121

$450 - $499

307

1617 1246 609 375 233 123 80

$500 - $599

712

2856 1589 766 461 230 119 53

$600 - $699

938

2024 832 445 210 99 37 23

$700 - $799

1235

1455 543 255 100 34 20 9

$800 - $899

1457

928 358 121 42 19 8 5

$900 - $999

1617

609 233 80 18 10 5 1

$1,000 - $1,999

7872

1667 392 91 34 14 10 8

$2,000 - $2,999

1357

82 11 5 5 4 1 2

$3,000 - $3,999

310

9 3 3 1 1 1 0

$4,000 - $4,999

60

3 3 1 1 0 0 0

$5,000 - $5,999

22

2 1 1 0 0 0 1

$6,000 - $6,999

7

3 0 0 0 0 1 0

$7,000 - $7,999

2

0 1 0 0 1 0 0

Over $8,000

12

4 2 2 2 1 1 1
Total Increase Portions

17,706

91.60%

Average $1,183 Median $1,051

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 23

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

256

596 923 1222 1561 1725 1852 1989

-($50 - $99)

340

626 802 767 642 703 747 729

-($100 - $149)

327

503 379 439 456 400 362 339

-($150 - $199)

299

264 324 290 249 229 227 223

-($200 - $249)

339

214 231 190 184 183 129 95

-($250 - $299)

164

225 169 149 148 89 87 87

-($300 - $349)

127

171 133 131 77 75 64 45

-($350 - $399)

137

119 96 92 58 58 39 41

-($400 - $449)

115

110 103 49 64 40 39 24

-($450 - $499)

99

80 80 46 36 35 23 17

-($500 - $599)

225

149 89 87 62 35 34 38

-($600 - $699)

171

131 75 45 32 31 25 20

-($700 - $799)

119

92 58 41 20 24 19 13

-($800 - $899)

110

49 40 24 29 17 13 10

-($900 - $999)

80

46 35 17 15 12 6 4

-($1,000 - $1,999)

467

214 119 85 46 24 14 6

-($2,000 - $2,999)

162

67 20 6 1 1 1 3

-($3,000 - $3,999)

52

18 4 0 1 2 3 2

-($4,000 - $4,999)

44

5 0 1 2 1 1 0

-($5,000 - $5,999)

23

1 1 2 1 1 0 0

-($6,000 - $6,999)

10

0 0 1 1 0 0 0

-($7,000 - $7,999)

8

0 2 1 0 0 0 1

Over -$8,000

21

15 12 10 10 10 10 9
Total Decrease Portions

3,595

20.49%

Average -$1,074 Median -$347

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

255

561 795 1060 1367 1713 2073 2471

$50 - $99

306

499 918 1411 1888 2361 2758 2963

$100 - $149

234

653 1147 1603 1879 1888 1915 2100

$150 - $199

265

758 1214 1360 1304 1572 1660 1688

$200 - $249

307

784 1060 1004 1300 1284 1422 1472

$250 - $299

346

819 828 1096 1080 1201 1152 1042

$300 - $349

360

757 784 872 1010 961 858 719

$350 - $399

398

603 788 816 866 756 617 461

$400 - $449

389

528 668 797 705 544 403 321

$450 - $499

395

476 616 675 537 425 319 226

$500 - $599

819

1096 1201 1042 769 532 372 297

$600 - $699

757

872 961 719 472 312 239 179

$700 - $799

603

816 756 461 286 211 151 81

$800 - $899

528

797 544 321 217 147 74 67

$900 - $999

476

675 425 226 129 75 63 59

$1,000 - $1,999

4256

2769 1277 683 422 283 207 144

$2,000 - $2,999

2011

519 209 119 55 40 37 37

$3,000 - $3,999

758

164 74 25 28 22 12 7

$4,000 - $4,999

346

85 21 24 16 7 3 3

$5,000 - $5,999

173

34 19 13 4 2 3 1

$6,000 - $6,999

94

18 15 5 1 2 0 0

$7,000 - $7,999

70

7 7 2 2 0 0 1

Over $8,000

196

52 15 8 5 4 4 3
Total Increase Portions

14,342

79.51%

Average $1,625 Median $1,130

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 24

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

859

1751 2827 4062 5341 6276 7050 8223

-($50 - $99)

892

2311 3449 4161 4023 4195 4071 3379

-($100 - $149)

1076

2214 2561 2248 2037 1616 1383 1146

-($150 - $199)

1235

1947 1634 1131 946 661 439 349

-($200 - $249)

1279

1141 930 745 447 271 249 273

-($250 - $299)

935

1107 686 401 225 207 243 298

-($300 - $349)

774

650 417 195 173 209 259 438

-($350 - $399)

1173

481 244 154 178 233 412 181

-($400 - $449)

614

485 134 129 180 382 169 62

-($450 - $499)

527

260 137 144 232 156 55 19

-($500 - $599)

1107

401 207 298 424 143 46 30

-($600 - $699)

650

195 209 438 124 27 28 16

-($700 - $799)

481

154 233 181 38 22 10 4

-($800 - $899)

485

129 382 62 22 14 3 10

-($900 - $999)

260

144 156 19 15 3 8 7

-($1,000 - $1,999)

1023

998 209 67 38 35 30 23

-($2,000 - $2,999)

836

47 25 15 13 11 11 15

-($3,000 - $3,999)

162

20 10 8 8 12 9 5

-($4,000 - $4,999)

37

8 6 6 9 5 3 4

-($5,000 - $5,999)

10

7 5 9 5 1 6 3

-($6,000 - $6,999)

10

5 5 2 0 5 3 5

-($7,000 - $7,999)

10

3 7 3 4 1 3 3

Over -$8,000

77

54 39 34 30 27 22 19
Total Decrease Portions

14,512

70.61%

Average -$923 Median -$356

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

927

1448 2016 2482 2810 2975 3158 3369

$50 - $99

521

1034 959 887 880 1034 1154 1183

$100 - $149

568

493 565 640 741 796 851 865

$150 - $199

466

394 469 543 615 612 491 377

$200 - $249

328

321 422 494 442 311 219 158

$250 - $299

165

319 374 371 240 164 88 32

$300 - $349

183

303 358 237 145 69 24 17

$350 - $399

211

240 254 140 79 23 16 9

$400 - $449

171

253 191 98 21 14 9 5

$450 - $499

150

241 120 60 15 10 3 0

$500 - $599

319

371 164 32 20 7 2 3

$600 - $699

303

237 69 17 5 0 3 2

$700 - $799

240

140 23 9 2 3 2 4

$800 - $899

253

98 14 5 2 1 4 2

$900 - $999

241

60 10 0 1 3 1 0

$1,000 - $1,999

906

63 14 11 10 8 6 6

$2,000 - $2,999

56

7 5 4 4 4 3 2

$3,000 - $3,999

7

4 3 2 2 0 1 2

$4,000 - $4,999

3

2 2 2 0 1 2 1

$5,000 - $5,999

4

2 2 0 1 2 0 0

$6,000 - $6,999

3

1 0 1 2 0 0 0

$7,000 - $7,999

1

1 0 1 0 0 0 0

Over $8,000

13

7 5 3 2 2 2 2
Total Increase Portions

6,039

29.39%

Average $555 Median $308

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 25

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

415

852 1145 1398 1618 1802 1987 2117

-($50 - $99)

437

546 657 719 716 700 634 633

-($100 - $149)

293

404 419 385 358 348 325 272

-($150 - $199)

253

315 281 248 234 172 166 146

-($200 - $249)

220

217 190 176 117 119 90 63

-($250 - $299)

184

168 158 96 98 67 36 34

-($300 - $349)

185

119 96 90 61 30 30 24

-($350 - $399)

130

129 76 56 29 27 21 20

-($400 - $449)

104

100 69 40 21 18 17 18

-($450 - $499)

113

76 50 23 22 18 20 6

-($500 - $599)

168

96 67 34 27 26 10 8

-($600 - $699)

119

90 30 24 25 9 8 8

-($700 - $799)

129

56 27 20 7 5 5 3

-($800 - $899)

100

40 18 18 8 7 3 4

-($900 - $999)

76

23 18 6 3 4 3 1

-($1,000 - $1,999)

305

102 51 24 17 10 11 10

-($2,000 - $2,999)

70

19 8 5 5 7 4 4

-($3,000 - $3,999)

32

5 2 5 4 2 1 0

-($4,000 - $4,999)

11

4 4 3 1 0 0 0

-($5,000 - $5,999)

8

1 3 1 0 0 0 1

-($6,000 - $6,999)

3

4 1 0 0 0 1 0

-($7,000 - $7,999)

2

1 1 0 0 1 0 0

Over -$8,000

17

7 3 3 3 2 2 2
Total Decrease Portions

3,374

22.64%

Average -$722 Median -$267

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

426

887 1330 1909 2401 2949 3483 4013

$50 - $99

461

1022 1619 2104 2659 3059 3449 3757

$100 - $149

443

1040 1589 1995 2276 2535 2568 2426

$150 - $199

579

1064 1470 1762 1895 1653 1243 900

$200 - $249

492

1047 1328 1461 1115 736 535 312

$250 - $299

548

948 1207 965 586 384 150 58

$300 - $349

534

924 957 547 346 112 47 22

$350 - $399

530

838 696 353 130 38 13 3

$400 - $449

525

773 433 220 44 20 2 4

$450 - $499

522

688 303 92 25 3 5 3

$500 - $599

948

965 384 58 12 6 5 8

$600 - $699

924

547 112 22 6 5 6 3

$700 - $799

838

353 38 3 3 6 3 2

$800 - $899

773

220 20 4 6 3 1 2

$900 - $999

688

92 3 3 3 0 2 5

$1,000 - $1,999

2177

90 20 20 11 12 10 4

$2,000 - $2,999

81

11 9 3 4 1 0 0

$3,000 - $3,999

9

9 3 1 0 0 1 2

$4,000 - $4,999

9

0 1 0 0 1 1 2

$5,000 - $5,999

2

3 0 0 1 2 2 0

$6,000 - $6,999

3

1 0 1 1 1 0 0

$7,000 - $7,999

6

0 0 1 2 0 0 0

Over $8,000

8

4 4 2 0 0 0 0
Total Increase Portions

11,526

77.36%

Average $669 Median $573

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 26

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

970

1863 2609 3244 3744 4161 4518 4783

-($50 - $99)

893

1381 1552 1539 1449 1339 1222 1134

-($100 - $149)

746

917 821 717 642 557 460 369

-($150 - $199)

635

622 518 417 330 229 194 195

-($200 - $249)

500

410 335 248 150 148 139 105

-($250 - $299)

417

307 222 121 119 112 70 67

-($300 - $349)

357

240 143 108 99 57 53 18

-($350 - $399)

265

177 86 87 53 50 15 14

-($400 - $449)

199

140 62 65 42 16 14 14

-($450 - $499)

211

108 86 40 34 10 14 6

-($500 - $599)

307

121 112 67 17 20 10 11

-($600 - $699)

240

108 57 18 20 10 7 2

-($700 - $799)

177

87 50 14 6 7 2 2

-($800 - $899)

140

65 16 14 9 2 2 0

-($900 - $999)

108

40 10 6 3 1 0 2

-($1,000 - $1,999)

421

119 40 17 8 6 7 5

-($2,000 - $2,999)

93

14 4 3 2 4 3 4

-($3,000 - $3,999)

26

3 2 2 2 2 1 0

-($4,000 - $4,999)

12

3 2 2 2 0 1 2

-($5,000 - $5,999)

2

0 2 2 0 1 1 0

-($6,000 - $6,999)

1

2 1 0 1 1 0 0

-($7,000 - $7,999)

2

0 1 0 1 0 0 0

Over -$8,000

14

9 5 5 3 3 3 3
Total Decrease Portions

6,736

29.14%

Average -$462 Median -$214

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

1084

2173 3095 4081 5164 6131 7051 7823

$50 - $99

1089

1908 3036 3742 4094 4274 4355 4368

$100 - $149

922

2050 2461 2582 2554 2476 2262 2054

$150 - $199

986

1692 1813 1786 1612 1364 1175 1141

$200 - $249

1083

1435 1407 1233 992 944 796 513

$250 - $299

967

1147 1069 821 773 517 343 274

$300 - $349

920

1001 787 598 450 276 203 88

$350 - $399

772

785 577 543 260 191 76 41

$400 - $449

769

690 449 320 205 71 37 16

$450 - $499

666

543 495 193 92 37 17 19

$500 - $599

1147

821 517 274 85 37 31 14

$600 - $699

1001

598 276 88 34 28 6 6

$700 - $799

785

543 191 41 22 5 5 2

$800 - $899

690

320 71 16 10 6 2 4

$900 - $999

543

193 37 19 5 2 4 6

$1,000 - $1,999

2475

438 78 32 20 16 13 7

$2,000 - $2,999

382

22 13 6 4 2 3 3

$3,000 - $3,999

56

10 3 1 2 2 0 0

$4,000 - $4,999

15

3 1 2 1 0 1 1

$5,000 - $5,999

7

3 1 1 0 1 0 1

$6,000 - $6,999

4

1 2 0 1 0 1 0

$7,000 - $7,999

6

0 0 0 0 1 0 0

Over $8,000

13

6 3 3 2 1 1 1
Total Increase Portions

16,382

70.86%

Average $625 Median $424

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 27

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

842

1631 2476 3588 4808 5689 6434 7737

-($50 - $99)

789

1957 3213 4149 4517 4409 4109 3134

-($100 - $149)

845

2101 2914 2361 1399 987 770 580

-($150 - $199)

1112

2048 1495 773 523 366 240 194

-($200 - $249)

1220

1588 626 376 233 153 138 94

-($250 - $299)

881

773 361 204 124 100 61 82

-($300 - $349)

745

445 228 102 87 48 84 116

-($350 - $399)

1303

328 138 92 48 69 101 84

-($400 - $449)

866

214 78 59 52 84 74 38

-($450 - $499)

722

162 75 35 60 75 37 32

-($500 - $599)

773

204 100 82 129 79 52 31

-($600 - $699)

445

102 48 116 68 41 23 13

-($700 - $799)

328

92 69 84 43 22 12 17

-($800 - $899)

214

59 84 38 24 9 13 15

-($900 - $999)

162

35 75 32 9 12 16 5

-($1,000 - $1,999)

492

352 163 81 68 51 32 24

-($2,000 - $2,999)

241

52 40 22 4 2 1 2

-($3,000 - $3,999)

111

29 11 2 1 2 1 1

-($4,000 - $4,999)

33

20 2 1 1 0 1 0

-($5,000 - $5,999)

19

2 0 1 0 1 0 1

-($6,000 - $6,999)

21

2 1 0 1 0 1 0

-($7,000 - $7,999)

8

0 1 1 0 1 0 1

Over -$8,000

31

7 5 4 4 3 3 2
Total Decrease Portions

12,203

67.85%

Average -$512 Median -$330

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

851

1651 2339 2886 3339 3749 4064 4325

$50 - $99

800

1235 1410 1439 1385 1235 1105 984

$100 - $149

688

863 806 659 514 430 384 330

$150 - $199

547

576 429 325 260 225 128 80

$200 - $249

453

399 254 189 159 66 49 29

$250 - $299

410

260 176 141 48 28 19 12

$300 - $349

315

185 139 42 25 16 13 9

$350 - $399

261

140 86 38 18 11 7 4

$400 - $449

230

105 35 14 5 7 4 3

$450 - $499

169

84 31 15 10 6 1 2

$500 - $599

260

141 28 12 10 3 4 0

$600 - $699

185

42 16 9 1 2 0 0

$700 - $799

140

38 11 4 4 0 0 0

$800 - $899

105

14 7 3 0 0 0 1

$900 - $999

84

15 6 2 0 0 1 1

$1,000 - $1,999

250

30 5 2 2 2 1 0

$2,000 - $2,999

25

0 2 0 0 0 0 0

$3,000 - $3,999

5

2 0 0 0 0 0 0

$4,000 - $4,999

0

0 0 0 0 0 0 1

$5,000 - $5,999

0

0 0 0 0 0 1 0

$6,000 - $6,999

1

0 0 0 0 1 0 0

$7,000 - $7,999

1

0 0 0 1 0 0 0

Over $8,000

2

2 2 2 1 1 1 1
Total Increase Portions

5,782

32.15%

Average $388 Median $201

Appendix 10 (continued)

Phase-in Distribution of Residential/Farm Property Class -

For Ward 28

Assessment Portions with Tax Decreases - By Phase-in Years

Amount Decrease

0

2

3

4

5

6

7

8

-($0 - $49)

814

1654 2578 3497 4350 5128 5646 6165

-($50 - $99)

840

1843 2550 2668 2650 2565 2357 2154

-($100 - $149)

924

1631 1440 1528 1194 810 646 460

-($150 - $199)

919

1037 1125 626 413 276 245 182

-($200 - $249)

853

835 501 288 200 146 110 86

-($250 - $299)

778

693 309 172 118 86 70 80

-($300 - $349)

518

310 146 115 79 63 61 98

-($350 - $399)

519

316 130 67 43 53 90 140

-($400 - $449)

403

184 96 50 52 71 132 103

-($450 - $499)

432

104 50 36 48 73 93 69

-($500 - $599)

693

172 86 80 124 197 100 35

-($600 - $699)

310

115 63 98 179 82 25 16

-($700 - $799)

316

67 53 140 87 22 13 25

-($800 - $899)

184

50 71 103 28 11 23 14

-($900 - $999)

104

36 73 69 12 27 14 7

-($1,000 - $1,999)

440

490 339 97 66 33 18 9

-($2,000 - $2,999)

224

73 31 9 0 0 1 1

-($3,000 - $3,999)

266

24 2 0 1 1 2 2

-($4,000 - $4,999)

40

9 0 1 1 2 1 1

-($5,000 - $5,999)

33

0 0 0 1 1 0 0

-($6,000 - $6,999)

15

0 1 2 1 0 0 0

-($7,000 - $7,999)

9

0 0 0 0 0 0 0

Over -$8,000

14

5 4 2 1 1 1 1
Total Decrease Portions

9,648

68.66%

Average -$562 Median -$277

Assessment Portions with Tax Increases - By Phase-in Years

Amount Increase

0

2

3

4

5

6

7

8

$0 - $49

713

1323 1841 2317 2709 3025 3250 3441

$50 - $99

610

994 1184 1124 975 847 738 646

$100 - $149

518

708 557 431 354 293 242 192

$150 - $199

476

416 290 215 173 114 95 72

$200 - $249

392

243 166 124 88 56 35 20

$250 - $299

316

188 127 68 36 29 16 13

$300 - $349

225

116 65 46 25 12 9 5

$350 - $399

191

99 49 26 11 8 4 6

$400 - $449

141

78 37 13 9 5 5 2

$450 - $499

102

46 19 7 7 3 2 1

$500 - $599

188

68 29 13 5 5 2 2

$600 - $699

116

46 12 5 4 1 3 2

$700 - $799

99

26 8 6 2 2 1 1

$800 - $899

78

13 5 2 1 1 1 .

$900 - $999

46

7 3 1 2 2 0 .

$1,000 - $1,999

160

27 11 5 2 0 0 1

$2,000 - $2,999

21

5 0 0 0 1 1 .

$3,000 - $3,999

6

0 0 1 1 0 0 .

$4,000 - $4,999

3

0 0 0 0 0 0 .

$5,000 - $5,999

2

0 1 0 0 0 0 .

$6,000 - $6,999

0

1 0 0 0 0 0 .

$7,000 - $7,999

1

0 0 0 0 0 0 .

Over $8,000

Total Increase Portions

4,404

31.34%

Average $299 Median $187



he Strategic Policies and Priorities Committee also had before it the following which were circulated to all Members of Council with the Agenda of the Strategic Policies and Priorities Committee Meeting held on July 14, 1998, and copies thereof are on file in the office of the City Clerk:

-report (May 4, 1998) from the Assessment and Tax Policy Task Force, addressed to the Strategic Policies and Priorities respecting the Residential Property Class; and

-communication (July 13, 1998) from Gordon Crann.

(City Council at its Special Meeting on July 21 and 23, 1998, had before it, during consideration of the foregoing Clause, the following report (undated) from Mayor Mel Lastman:

Purpose:

To present a compromise proposal for the phase-in of assessment-related changes in the residential property class.

Financial Implications:

The compromise proposal will implement the new Provincial current value assessment system for 80percent of all taxpayers within three years and provide an additional two years of phase-in for those with very large increases and decreases.

Recommendation:

It is recommended that in order to allow individuals time to adjust their financial affairs, the increases and decreases related to property tax reform with respect to residential property tax reform be phased in over a five year period in combination with an annual minimum payment of $300.00 for tax increases and an annual minimum payment of $200.00 for tax decreases.

Discussion:

At its meeting of July 13, 1998, the Strategic Policies and Priorities Committee referred the following motions to me for a report directly to City Council on July 21, 1998:

" in order to allow individuals time to adjust their financial affairs, the increases and decreases related to property tax reform with respect to residential property tax reform be phased-in over a seven and a half year period, "

For over 40 years, the assessment system in the Province of Ontario has been broken. The Province is implementing a new system - Current Value Assessment - that the City is required to use. The numbers show that 56 percent of taxpayers will see assessment decreases averaging $491.00 and 44percent of taxpayers will see assessment increases averaging $692.00.

Over the past four months, the Assessment and Tax Policy Task Force has worked hard to develop its recommendations and has heard hundreds of deputations from the public on what is fair and equitable for all citizens of this new City.

I have heard taxpayers on both sides - those with increases and decreases - and we need a compromise position that recognizes the needs of all our citizens. I have worked hard to present this compromise proposal which takes care of 80 percent of all assessment changes within three years while allowing an additional two years for those with very large changes.

My proposal is simple:

(i)adopt a five year phase-in plan for assessment increases and decreases;

(ii)adopt a minimum payment amount for assessment increases of $300.00 during each year of the phase-in period;

(iii)adopt a minimum payment amount for assessment decreases of $200.00 during each year of the phase-in period.

Appendix A illustrates how the proposal would work.

With this plan, those taxpayers with assessment decreases will effectively see the following with the minimum payment of $200.00 annually:

(i)31.2 percent will get their full decrease in 1998 - an average of $155.00;

(ii)another 30.0 percent will get their full decrease by 1999;

(iii)another 18.4 percent will get their full decrease by 2000; and

(iv)a total of 79.6 percent of taxpayers will get their full decreases within 3 years.

With this plan, those taxpayers with assessment increases will be affected as follows:

(i)41.1 percent will pay up to $300.00 and receive their full increase in 1998 - an average of $136.00;

(ii)another 23.2 percent will see their full increase in 1999;

(iii)another 13.8 percent will see their full increase in 2000; and

(iv)a total of 78.2 percent of taxpayers will get their full increases within 3 years.

Appendix B highlights by ward how the decreases work with the minimum $200.00 payment over the first three years, while Appendix C highlights the increases by ward with the $300.00 minimum payment.

Conclusion:

The implementation of Current Value Assessment in our new City is one of our biggest challenges. We have much work ahead of us on many more issues. We need a compromise on how to balance the interests of all citizens affected by the new Current Value Assessment system. A five year phase-in with annual minimum payments of $200.00 for decreases and $300.00 for increases is the best compromise. It is a compromise that we can all work with.

(Appendix A)

The Compromise Proposal

ËPhase in assessment related increases and decreases over 5 years

<Apply a minimum decrease of $200.00 for those with decreases

<Apply a minimum payment of $300.00 for those with increases

ËGives 80 percent of all taxpayers their full decreases within 3 years

ËGives 80 percent of all taxpayers their full decreases within 3 years

Ë80 percent of taxpayers with increases would fully pay within 3 years

Ë80 percent of taxpayers with increases would fully pay within 3 years

Here is how it works:

(1)For taxpayers with assessment related decreases:

-The minimum payment applies if the total assessment related decrease is <$1000.00.

For example:

If your total assessment related decrease is:

(a)<$200-In 1998, the entire decrease would be paid.

(b)$200.00-$1000.00-The minimum payment of $200.00 would be paid each year until the total amount is paid. This means that the total decrease will be paid before the five year phase-in period - more than one year but slightly less than 5 years.

(c)=$1000.00-$200.00 per year would be paid for each of the five years.

(d)>$1000.00-The total decrease would be paid over five years by taking the total amount divided by 5.

Here are some examples:

Assessment Phase in Period
Decrease

1998

1999 2000 2001 2002
(a)$200 $200
(b)$500 $200 $200 $100
$700 $200 $200 $200 $100
$900 $200 $200 $200 $200 $100
(c)$1000 $200 $200 $200 $200 $200
(d)$2000 $400 $400 $400 $400 $400

(2)For taxpayers with assessment related increases:

If your total assessment related increase is:

(e)<$300.00-In 1998, the entire increase would be paid.

(f)$300.00-$1500.00-The minimum payment of $300.00 would be paid for each year until the total amount is paid. This means that the total increase will be paid before the five year phase-in period - more than one year but slightly less than 5 years.

(g)=$1500.00 -$300.00 per year would be paid for each of the five years.

(h)>$1500.00-The total increase would be paid over five years by taking the total amount divided by 5.

Here are some examples:

Assessment Phase in Period
Increase

1998

1999 2000 2001 2002
(e)$200 $200
(f)$700 $300 $300 $100
$1000 $300 $300 $300 $100
$1100 $300 $300 $300 $200
(g)$1500 $300 $300 $300 $300 $300
(h)$2000 $400 $400 $400 $400 $400

insert Appendix B

Analysis of Decreases - $200.00 continuing

threshold over phase in period

insert Appendix C

Analysis of increases - $300 continuing

threshold over phase in period

(A copy of each of the following charts, appended to the foregoing report, is on file in the office of the City Clerk:

(i)"Decreases - First three Years - $200.00 Threshold each year"; and

(ii)"Increases - First Three Years - $300.00 Threshold each year".)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July22, 1998) from the Chief Financial Officer and Treasurer:

Attached for your information are additional threshold scenarios, as well as a table summarizing the City-wide impact of each threshold.

This inforatmon replaces the tables circulated with my report dated July 21, 1998.)

(Summary of Threshold Options - City Totals)

Tble A-1

Table A-2

Table B-1

Table B-2

Table C-1

Table C-2

Table D-1

Table D-2

Table E-1

Table E-2

Table F-1

Table F-2

(City Council also had before it, during consideration of the foregoing Clause, the following report (July 23, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

To obtain Council's authority for the adoption of by-laws for the levying and collection of taxes for the 1998 taxation year, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and for the levying of a special charge for 1998 for certain Business Improvement Areas. Also attached for Council's information are draft by-laws concerning the residential property class phase-in program with or without a threshold and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes.

Recommendations:

It is recommended that:

(1)Council authorize the levy and collection of taxes for the 1998 taxation year, the imposition of a penalty charge for non-payment of 1998 taxes, the provision of interest to be added to tax arrears and to establish tax ratios for the year 1998;

(2)Council approve the levy of a special charge for 1998 for the following Business Improvement Areas and to provide for its collection: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St.Lawrence Neighbourhood; Upper Village and Weston;

(3)authority be granted for the introduction of the necessary bills in Council to levy taxes for the year 1998 and to provide for the collection of taxes for 1998 other than those levied under By-law No. 10-1998, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and to levy a special charge for 1998 for certain Business Improvement Areas and provide for its collection, in the form or substantially in the form of the draft by-laws attached hereto; and

(4)subject to Council adopting a residential property class phase-in program with or without a threshold; and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes, that leave be granted for the introduction of the necessary bills in Council to give effect thereto in the form or substantially in the form of the draft by-laws attached hereto.

Comments:

The draft by-laws are: (1) to levy and collect taxes for the year 1998, to impose a penalty charge for non-payment of 1998 taxes, to provide for interest to be added to tax arrears and to establish tax ratios for the year 1998; (2) to levy a special charge in 1998 for certain Business Improvement Areas and to provide for its collection; (3) to phase-in tax changes in the residential property class with or without a threshold; and (4) to cap increases and decreases of property taxes on the commercial, industrial and multi-residential classes for the taxation years 1998, 1999 and 2000.

The levying by-law sets the final tax rates for all property classes, which are set out in Sections 6 and 7 of the attached draft by-law. The tax rate for the residential property class of 1.259702 percent includes a non-phaseable portion of .0217 percent relating to the finalization of various provincial components of the bill -- provincial tax ratios and full use of the provincial education tax room. The by-law imposes a penalty rate of 1.25 percent per month for the non-payment of taxes in the 1998 taxation year and provides for the payment of interest at 1.25 percent per month to be added to tax arrears. The by-law also establishes tax ratios.

Budgets for the following Business Improvement Areas have already been adopted by Council: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St. Lawrence Neighbourhood; Upper Village and Weston. It is now necessary to levy and collect a special charge for the Boards of Management of each respective Business Improvement Area.

The attached draft by-laws, which have been prepared by the City Solicitor, give effect to the recommendations in my reports respecting a residential property class phase-in program with or without a threshold (dated July 2, 1998); and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential (dated June 29, 1998) and commercial and industrial property classes (dated June 26, 1998).

Contact Name:

Paul Wealleans, Phone: 397-4208)

(A copy of each of the by-laws, referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July 23, 1998) from the Chief Financial Officer and Treasurer:

On July 21, 1998, Councillor Kinahan moved a motion to amend Mayor Lastman's motion to provide, among other recommendations, that:

" (a) the phase-in for decreases in effect be three years and the phase-in for increases be five years with the thresholds recommended in the report from Mayor Lastman;"

If enabled through Provincial legislative amendments, this would impact the City's cash flow beginning in 1999 and would require higher levels of temporary borrowing and/or lower levels of interest income. It is understood that tax billing in 1998 would proceed as per Mayor Lastman's proposal and that, when Provincial legislation was enabled, a "catch-up" would occur in 1999 and 2000 for those taxpayers with large decreases that would have carried on to 2001 and 2002.

Due to the accelerated phase-in of tax decreases (over three years, compared with increases phased-in over five years), the City would, in effect, have to borrow funds to cover the offset for those taxpayers with accelerated decreases which were not covered in the first two years by those receiving increases. In aggregate, the City would have to borrow $16.6 million in 1999 (including that for education purposes) as shown below and that same $16.6 million would have to be borrowed again in 2000. In addition, the City would have to borrow an additional $12.7 million in 2000 for that year's accelerated decreases. By the third year, 2001, tax gains from those with increases would start to offset the cumulative borrowing required for accelerated decreases from 1999 and 2000. Similarly, in 2002, the remainder of the increases would accrue to the City to offset the balance of the accelerated decreases.

However, the interest expense is not the only component to be considered as the cost of this motion. The amount of taxes raised in the years 1999 through 2001 would not fully meet the required amount for the respective budgets. Displayed below are the additional taxes that would have to be written-off or recovered from other sources such as debt (if permitted by legislative changes - special legislation would have to permit the borrowing for operating purposes), including the School Board share:

$Million

1999200020012002

Taxes Required to be Billed:2.5312.5312.5312.531

Less: Accelerated Decreases Paid:

1999(16.6)(16.6)(16.7)(16.7)

2000(12.7)(12.7)(12.7)

Add Increases Paid

200118.418.4

2002 11.0

Budget Shortfall/Tax Writeoff(16.6)(29.3)(10.9)0.0

- or -

Accumulated Debt16.645.956.856.8

Interest Costs560k2.858k3.736k1.248k

Cumulative Interest Costs560k3.418k7.154k8.402k

Notes:

(1)If the cost of each year's shortfall is incorporated into each year's budget, $56.8 million would be the cost over the three years.

(2)If the budget shortfall were debentured each year, the total cost of borrowing and repaying $56.8 million would be $84 million (i.e., including annual interest charges).

(3)The above costs include 100 percent of total costs (City and School Board).)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (undated) from the Chief Financial Officer and Treasurer:

Attached please find the legal opinion on Councillor Walker's motion as requested.

As per the legal opinion, the City of Toronto cannot lawfully refuse to implement Current Value Assessment or to assume the costs it is statutorily required to bear under the Ontario Property Assessment Corporation Act.

(Communication dated July 20, 1998,

addressed to the Chief Financial Officer and Treasurer

from the City Solicitor)

I am writing in response to your request for a legal opinion to be included in your report to Council, as requested by the Assessment and Tax Policy Task Force, on the following motion made by Councillor Walker:

"..... Therefore Be It Resolved that:

(1)the City of Toronto refuse to assume any costs related to the implementation or operation of the Current Value Assessment system until the Province has carried out a study which verifies the accuracy of their assessment data; and

(2)the City of Toronto refuse to assume any costs related to the implementation or operation of the Current Value Assessment system until the assessment roll has been finalized and all appeals and re-assessments related to this year's assessments have been processed and settled by the Provincial Government."

It would be unlawful for the City of Toronto to refuse to assume any of its statutory obligations with respect to the implementation of Current Value Assessment or the costs associated therewith.

Pursuant to the Municipal Act and the Education Act as amended, the City is required to levy and collect taxes for municipal and school board purposes on the assessment roll as prepared and returned by the Province. Consequently, Council must implement Current Value Assessment by levying 1998 tax rates on the 1998 Current Value Assessments reflected in the 1998 assessment roll returned by the Province.

Furthermore, the City has an obligation to assume a portion of the costs associated with the provision of assessment services under the Ontario Property Assessment Corporation Act, 1997 (Schedule G of Bill 164).

While the Act received Royal Assent on December 18, 1997 (the "Act"), sections 9, 10, and 15 to 24 have not yet been proclaimed into force. Thus, the Province will continue to pay all costs associated with the provision of assessment services until subsection 9(1) comes into force (subsection 13(1)). However, the Ontario Property Assessment Corporation (the "Corporation") is required to reimburse the Province for all such costs.

The Corporation shall require each municipality to pay an amount in each taxation year, in accordance with section 12, beginning with the 1998 taxation year (subsection 12(1)), and the Corporation may charge interest and penalties on late payments (subsection 12(8)). The date that these payment obligations are to commence, however, has not yet been finalized.

Consequently, the City of Toronto cannot lawfully refuse to implement Current Value Assessment or to assume the costs it is statutorily required to bear under the Ontario Property Assessment Corporation Act, 1997. If Council refused to fulfill these obligations, it could be compelled to do so by way of court order.

If you have any further questions, please contact Christina Hueniken at 392-8429.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July23, 1998) from Councillor Raymond Cho, Scarborough-Malvern:

I am proposing three motions today regarding the implementation of CVA.

Please pay special attention to Motion No. (1). I feel this motion is a win-win proposal and it will work. It shows residents of Toronto that our Mayor, and we, as Councillors, have compassion and understanding for both sides of the issue and we sincerely want to do what is best for all of Toronto.

I appreciate your support and thank you for your interest.

(A copy of each of the motions, referred to in the foregoing communication, was circulated to all Members of Council at the meeting of City Council on July 21 and 23, 1998, and a copy thereof is on file in the office of the City Clerk)

(City Council also had before it, during consideration of the foregoing Clause, a communication (March 12, 1998) submitted by Councillor John Adams, Midtown, addressed to The Honourable Ernie Eves, Minister of Finance, from the City Clerk, advising that the Council of the City of Toronto at its meeting held on March 4, 5 and 6, 1998, in adopting, as amended, Clause No. 3 contained in Report No. 3 of The Strategic Policies and Priorities Committee, headed "Reassessment and Tax Policy Information and Communications Plan", in part, requested the Property Assessment Division of the Ministry of Finance to:

(a)(i)make public and provide to the City of Toronto the valuation models used, neighbourhood by neighbourhood, to value residential properties in the City of Toronto, including any statistical regression equations that were used, the boundaries of the homogeneous neighbourhood areas within which it applies regression analysis and the database upon which its regression analysis and other calculations are based;

(ii)make public and provide to the City of Toronto the quality control studies that were used to evaluate the accuracy of these valuation models, including assessment-to-sale ratios, coefficients of variation and dispersion, and full listing of property characteristics for properties in the ratio studies (including addresses and roll number);

(iii)make public and provide to the City of Toronto, in as much detail as possible, information on the valuation models used to assess properties in the other property classes (multi-residential, commercial and industrial) along with results of accuracy tests used for these classes, specifically including the comparability and interchangeability of the differing assessment methodologies used to determine the value of commercial buildings (e.g.,the income method used to assess office towers versus the arm's-length sales/regression analysis method used for strip retail);

(iv)because many businesses and homeowners have found their tax assessment was based on faulty data; and because many businesses have found that their tax assessments were based on most lucrative use, rather than current use; and because even where the errors are obvious, there is no guarantee that the appeal will be completed before taxes are charged; and, because, some of the erroneous assessments would lead to taxes high enough to destroy the business in question, and force the homeowner to sell their home, Council request the Province of Ontario to undertake an arm's-length review of the quality and accuracy of the current reassessment in the City of Toronto;

and that the information be readable under Microsoft Access; include Property Class Code and Postal Codes, and each Member of Council receive a copy of the CD-ROM version of the final assessment roll; and

(b)provide available assessment information necessary to determine assessments based on current value in current use.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (April 6, 1998) submitted by Councillor John Adams, Midtown, addressed to the Assistant Deputy Minister, Office of the Budget and Taxation, Ministry of Finance, and to the Acting Assistant Deputy Minister, Municipal Policy Development, Ministry of Municipal Affairs and Housing, from the Chief Financial Officer and Treasurer, requesting, on behalf of the Council of the City of Toronto, necessary assessment information to determine assessments based on current value in current use, and further clarification on and the criteria that would be used in designating which property or properties that would be eligible for current use provisions; and attaching a copy of an extract of Bill 106, Part I, of the Fair Municipal Finance Act.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July21, 1998) from Councillor Elizabeth Brown, Rexdale-Thistletown:

Please find attached a copy of a letter and petition I have received from my constituents. These were sent to me by residents residing in multi-residential as well as single-family dwellings. I feel that these will be of interest to my colleagues.

As you will note, a number of residents reside outside of my Ward, however, the majority reside inside my Ward. There are over 690 signatures on the petition (the entire list has been submitted to the clerk for the record).

Thank you for taking the above-noted into account.)

(A copy of the letter and petitions, referred to in the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July21, 1998) from Councillor Sherene Shaw, Scarborough-Agincourt:

Please find attached a petition signed by over 1,600 constituents of Ward 17, Scarborough - Agincourt. These are signatures from taxpayers that have been scraping their pennies together for many years to cover their unrealistically high property taxes. Ward 17 constituents have been paying for the tax holiday for others. Finally, there is a change to achieve tax equality for our taxpayers.

Statistically speaking in 1997 the residential property taxes in Ward 17 added up to over $60.0 million. In 1998, the total is $53.0 million with the implementation of CVA. That is a $7.0 million difference that my constituents have been paying for many years. Or, in another sense, over 88percent of my constituents should be receiving an average decrease of $437.00 dollars.

The hardships of Scarborough - Agincourt taxpayers need to come to an end. The implementation of immediate CVA for residential/farm property class is the only solution that will undo years of discriminatory taxing that has been wrongfully inflicted on Scarborough - Agincourt taxpayers.

I look forward to your support in undoing what has been unjust.)

(A copy of the letter and petitions, referred to in the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (July23, 1998) from Councillor David Miller, High Park-Parkdale, submitting samples of letters he has received from constituents relating to Current Value Assessment; and advising that the originals of the letters are on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, communications from the following individuals regarding residential property class:

(i)(May 11, 1998) from Ms. Joanne Olsen, Etobicoke;

(ii)(July 14, 1998) from Mr. Ken B. McLeod, Etobicoke;

(iii)(July 14, 1998) from Mr. Peter Storey;

(iv)(July 15, 1998) from Mr. Paul Fantauzzi;

(v)(July 17, 1998) from Mr. Ernie Ashford, Etobicoke;

(vi)(July 20, 1998) from Mr. Jarvis K. Postnikoff, Barrister and Solicitor, on behalf of owners of properties within Toronto;

(vii)(July 20, 1998) from Mr. Gary M. Kuchar, Barrister and Solicitor, on behalf of owners of properties within Toronto; and

(viii)(July 21, 1998) from Mr. Helmut Boek, Toronto.)

(Councillor Adams at the Special Meeting of City Council on July 21 and 23, 1998, declared his interest in those potions of the foregoing Clause respecting those instances where building permits are issued for changes to existing residential buildings in that he and his wife are in the process of applying for a building permit to construct a new home.)

2

Multi-Residential Property Class -

Tax Policy Options

(City Council at its Special Meeting on July 21 and 23, 1998, amended this Clause by:

(1)striking out Recommendation No. (2) embodied in the transmittal letter dated July 12, 1998, from the Assessment and Tax Policy Task Force, and inserting in lieu thereof the following new Recommendation No. (2):

"(2)the Chief Financial Officer and Treasurer be requested to report on other ways to encourage construction of rental buildings;"; and

(2)deleting from Recommendation No. (3) embodied in the transmittal letter dated July 12, 1998, from the Assessment and Tax Policy Task Force, the words "be requested to", and inserting prior to the words "the Province", the words "Council demand that", so that such recommendation shall now read as follows:

"(3)Council demand that the Province amend the legislation to provide that the landlords be required to pass on any decreases in taxation to tenants, with detailed deadlines for passing on any decreases and providing for mandatory fines or penalties should the deadlines not be met;".)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 12, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on July, 6, 7, 11, and 13, 1998, recommended to the Strategic Policies and Priorities Committee and City Council that:

(1)property tax increases due to reassessment for all multi-residential properties be capped at 2.5 percent in each of the tax years 1998, 1999 and 2000 and be funded by proportionately reducing tax decreases within the multi-residential property class;

(2)Council pass a by-law to create a property class for newly constructed rental buildings at the residential/farm tax rate and that the Province be requested to make this a permanent tax policy tool;

(3)the Province be requested to amend the legislation to provide that the landlords be required to pass on any decreases in taxation to tenants, with detailed deadlines for passing on any decreases and providing for mandatory fines or penalties should the deadlines not be met;

(4)all tenants be informed of any tax increases and decreases due to reassessment or tax policy changes by the City and that a plan for such notification be developed by the Chief Financial Office and Treasurer and that a budget for this undertaking be produced and submitted to Council through the Budget Committee and the Strategic Policies and Priorities Committee, following consultations with the Federation of Metro Tenants Associations;

(5)given that consultations have not provided a guaranteed strategy for ensuring that tax reductions will go to tenants:

(a)the City continue to lobby the Provincial Government to achieve legislative and regulatory reform which will guarantee that tenants receive the benefit of tax reductions over the long term, including the removal of loopholes that now exist;

(b)City staff develop detailed proposals to achieve these objectives; and

(c)there be no equalization tax shifts of the municipal share of property taxes between the multi-residential class and the residential class until there are guarantees that the tenants will receive the benefits;

(6)because, under the current legislation, tax increases will be absorbed by tenants while tax decreases will largely go to landlords, and because tenants are the most unfairly taxed group of residents in the City, Council should adopt a strategy which minimizes the tax changes effecting tenants;

(7)a workplan be developed to formulate comprehensive tax policies, including development of a permanent solution to ensure property tax equity between homeowners and tenants and a mechanism that would ensure tenants receive the full benefit of any reduction in tax burden for the multi-residential class, including reports on the following:

(i)a "de-linking" process which separates the tax bill from the rent bill and that City staff develop a programme which will allow this "de-linking" to take place and a complete set of provincial and/or municipal legislative, regulatory and administrative initiatives which will achieve this objective;

(ii)the creation of subclasses or graduated tax rates in the multi-residential class for the purpose of creating progressive tax rates for multi-residential buildings;

(iii)treating owner-occupied units in multi-residential class properties as residential/farm property in the same way the Federal and Provincial Governments treat such units as a principal residence;

(iv)the number of multi-residential buildings with only seven or eight units and what options owners of such buildings have in converting units to uses other than housing and what powers the City has in protecting rental units from being converted to non-residential uses;

(v)commencing in 1999, on how to better inform the taxpayers of the nature and type of services being paid for in the property tax bill, including education, services on property, services relating to people, i.e., "income redistribution"; and

(vi)the appropriateness of clawing back the education equalization imposed by the Province, even recognizing the inability of the City to ensure that the tax reductions will benefit the tenants.

The Task Force reports having received for information, a report (June 23, 1998) from the City Clerk advising that approximately 1,500 form letters had been received from citizens living in multi-residential apartments requesting that their property taxes be equalized.

Background:

The Assessment and Tax Policy Task Force had before it a report (June 29, 1998) from the Chief Financial Officer and Treasurer outlining the tax policy options available to Council with respect to the multi-residential property class.

The Task Force also had before it the following communications respecting the Current Value Assessment and the multi-residential property class:

(a)(July 3, 1998) from Mr. Gary Griesdorf, Executive Director, Greater Toronto Apartment Association;

(b)(Undated) from Mrs. Rosen;

(c)(July 6, 1998) from Mr. Sam Lewkowicz;

(d)(Undated) from Mr. Julian Smit;

(e)(July 6, 1998) from Mr. Howard Tessler, Federation of Metro Tenants' Association; and

(f)(July 7, 1998) from Councillor McConnell, Chair, Multi-Residential Work Group.

(Copies of the communications referred to in the transmittal letter of the Assessment and Tax Policy Task Force have previously been circulated to all Members of Council with the Assessment and Tax Policy Task Force agenda and copies thereof are on file in the office of the City Clerk.)

--------

(Report dated June 29, 1998, addressed to

the Assessment and Tax Policy Task Force from

the Chief Financial Officer and Treasurer)

Purpose:

This report outlines the tax policy options available to Council with respect to the multi-residential property class.

Funding Sources, Financial Implications and Impact Statement:

The recommended capping of multi-residential properties will protect tenants from significant CVA-related tax increases. However, if the cap is adopted by Council, budgetary tax increases, if any, in 1999 and 2000 would have to be funded from uncapped properties. For every one-percent increase in the City's levy during the next two years, there would be a 2.8 percent increase in the City's municipal portion of the residential/farm tax rate or a 1.8 percent increase in the total residential/farm tax rate.

Recommendations:

It is recommended that:

(1)property tax increases due to reassessment for all multi-residential properties be capped at 2.5 percent in each of the tax years 1998, 1999 and 2000 and be funded by proportionately reducing tax decreases within the multi-residential property class;

(2)the Province be requested to rescind any provisions in Bill 16 which prevent a municipal council from funding a budgetary tax increase from all property classes, should the capping provisions be adopted;

(3)a workplan be developed to formulate comprehensive tax policies, including development of a permanent solution to ensure property tax equity between homeowners and tenants and a mechanism that would ensure tenants receive the full benefit of any reduction in tax burden for the multi-residential class.

Background:

The report is set in the following sections:

Background:

Housing Stock and Households

History of Assessment of Residential Properties

Determination of Rental Income

Average Rents and Property Taxes

Comments:

Current Value Assessment - 1998

Implementation of CVA

Option 1 - Capping Tax Increases

Option 2 - Phase-in Program

Tenant Protection Act - Automatic Rent Reductions

Impact of Capping or Phase-in on Automatic Rent Reductions

Permanent Rent Reductions

Impact of Increased Profitability on Assessments

Options for Reducing Tax Burden on Multi-Residential Properties

Establish Uniform Municipal Tax Rate

Reduce Tax Ratio for Multi-Residential Class

Shift Taxes over Residential Phase-in Period - "The Kinahan Concept"

New Apartment Class

Conclusion:

Background:

Housing Stock and Households:

Ward profiles show that 51.5 percent of all residential dwellings in Toronto are occupied by tenants. Appendix 1 shows the total number of occupied dwellings by tenure for each ward. However, in order to compare the number of owners and tenants in the residential versus multi-residential property classes, the data should be separated by structure type, so as to distinguish between tenants occupying single family homes in the residential class versus tenanted apartments in the multi-residential class.

Appendix 2 shows the impact of current value assessment on all residential properties in the City, categorized by structure type. Separate data is shown for single family homes (including attached and detached), condominiums and co-ops, duplexes, multiplexes, residential above retail and apartments. As can be seen, the number of apartment units in the multi-residential property class represents 32percent of all residential dwelling units.

History of Assessment of Residential Properties:

Prior to 1998, all properties were assessed based on market values. However, across Ontario, assessments were based on values that were out of date, with assessments ranging from the 1940s to the early 1990s. The Province initiated reassessment due to the fact that most municipalities were on different assessment base years.

Assessors use three basic methodologies to determine the assessed value of a property: comparative sales, income capitalization and replacement cost. For residential homes, market values are determined based on comparative sales data. Multi-residential properties are considered business properties and as a result, market values are determined based on the rental income produced by the property.

Prior to the reassessment for 1998, once the market value of a property was calculated, the assessment was determined by factoring that value back to the base assessment year for that particular municipality. However, different property classes were assessed at different levels respective to their market values based on the ratio of existing (or frozen) assessment to market value. Residential properties were generally assessed at a lower percentage (ratio) of market value than commercial properties. Multi-residential properties were usually assessed at a higher percentage of market value than other classes. Historical class tax burdens were preserved at levels which existed prior to the provincial takeover of assessment in 1970, and continued through the policies and practices hidden within the assessment system.

Assessment to market value ratios in Metro Toronto prior to the current reassessment ranged from a low of 1.97 percent for the residential class to a high of 10.74 percent for the multi-residential class. Set out below are the average assessment to market value ratios in Metro Toronto prior to the 1998 reassessment.

Table 1

Assessment to Market Value Ratios - Former Area Municipalities

Old

Property Class

New

Property Class

Toronto

North York

Scarborough

Etobicoke

York

East York

Class 0 (1-2 Units) Residential

1.970%

2.627%

2.841%

2.715%

2.414%

2.278%

Class 1 ( 3-6 Units) Residential

2.910%

5.408%

3.654%

4.507%

3.956%

4.145%

Class 2 (7+ Units) Multi-Residential

9.791%

9.923%

9.414%

10.738%

10.154%

10.292%

Source: 1993 Equalization Factors.

Residential properties with 3-6 units have historically been assessed at levels slightly higher than single-family homes, which resulted in slightly higher tax burdens. However, the methodology used to assess these types of properties was the comparative sales method (the same method as single family residential), as opposed to the income method used for high-rise apartment buildings. Assessment reform introduced by the Province has moved these 3-6 unit properties into the residential property class, so that properties with less than seven units which have historically been assessed in a similar manner as single-family home, will be taxed at the same rate as single family homes.

Appendix 3 shows the tax impact of current value assessment for properties (assessment portions) with 3 to 6 residential units. Of the 8,706 properties in the residential property class with 3-6 units, 6,309 or 72.5 percent would experience tax decreases and 2,397 or 27.5 percent would experience tax increases as result of reassessment. Since the properties with 3 to 6 units are now included in the residential class, and therefore taxed at the lower residential rate, there has effectively already been a shift in taxes relating to these properties. The total reduction in taxes for these properties amounts to $11.7 million, which has now been redistributed among other residential properties.

The method for determining the assessed values of multi-residential properties resulted in high-rise apartments being assessed at four to five times the rate of single family homes. Since a common mill rate was applied to the assessed value of all residential properties, tenants paid taxes at higher effective tax rates than homeowners. However, the difference in tax burden was hidden in the assessed value of the property and most tenants were not aware of how much property tax they actually paid through their rent. With the 1998 reassessment, the difference in tax burdens between tenants and homeowners has become transparent by having different tax rates for the residential and multi-residential property classes. The updated preliminary transition ratio transition ratio for the multi-residential class in Toronto, as determined by the Province, is 5.2355, which results in the updated preliminary tax rate for municipal purposes being five times that of the residential class.

Determination of Rental Income:

Owners of rental income properties can claim deductions against income under the provisions of the Income Tax Act (Revenue Canada). Expenses that can be deducted fall under the categories of current expenses or capital expenses. Generally, current (or operating) expenses are recurring expenses that provide short term benefit such as repairs to ensure the rental property is maintained. These would include expenses incurred for painting the exterior walls of a building. Capital expenses provide a long term benefit and could include the purchase priced of the property, installation of vinyl siding or other permanent improvement, or the replacement of major appliances.

Types of expenses that owners of rental properties can deduct from income include:

(i)property taxes;

(ii)advertising for available apartments;

(iii)insurance premiums;

(iv)interest on money borrowed to improve the property which could include certain fees such as mortgage application fees, appraisals, etc.;

(v)management and administration fees;

(vi)motor vehicle expenses;

(vii)office expenses;

(viii)legal, administration and professional expenses;

(ix)salaries, wages and benefits;

(x)travel;

(xi)utilities; and

(xii)miscellaneous (i.e., landscaping)

These expenses allow the owner to reduce costs against income and is a key reason that multi-residential properties are assessed as income-producing properties and are taxed at a higher rate.

Average Rents and Property Taxes:

According to CMHC's rental market survey, the average monthly rental costs in Toronto in 1997 for a bachelor apartment were $555, for a one bedroom apartment $683, for a two-bedroom apartment $821 and for a three-bedroom apartment $1,002. The average rent for all units was $756.

Prior to 1998, the assessment of every occupied unit was set out separately on the assessment roll. Property taxes for an individual apartment unit could be estimated by multiplying the assessment by the mill rate. However, several factors made it difficult to determine the actual property taxes paid by each tenant. Firstly, landlords may have included in their rents an amount of tax for common areas (i.e., recreational facilities, parking garages) that may have been assessed separately. Further, the method of apportionment could vary based on the number of units in the building, the size of the units or the amount of rent paid by individual tenants.

Total property taxes as a proportion of rent for any particular unit may also vary based on the length of the lease. For example, similar sized units may pay different rents if rented in different years or leased for different time periods. Rental rates also vary depending on residential vacancy rates. As well, a lease can require a tenant to pay a set amount of monthly rent for several years, while municipal taxes may change in the interim. For that time period, the tenant's rent may fall behind other tenants in the building but could exceed other rents in a subsequent lease renewal. In addition, total property taxes as a proportion of rent for social housing units with rent geared to income will vary based on the income of each individual tenant.

Using the average monthly rental costs from the CMHC market rental survey and 20 percent as the average proportion of property taxes to total rent as determined by the Ministry of Municipal Affairs and Housing, average property taxes for apartments in Toronto are set out below. However, actual property taxes paid for similar units may vary widely within the same apartment building for the reasons outlined above.

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Table 2

Average Toronto Rents and Property Taxes - By Apartment Type

Apartment Type

Average Rent

Average Property Taxes

Per Year

Per Month

Bachelor

$555

$1,332

$111

1-Bedroom

$683

$1,639

$137

2-Bedroom

$821

$1,970

$164

3-Bedroom

$1,002

$2,405

$200

Appendix 4 compares the estimated average taxes per dwelling unit and per capita for each of the residential and multi-residential classes. The table shows the average taxes per unit and per capita in 1997, as well the average taxes based on the final CVA data. On a per unit basis, in 1997 residential taxpayers paid $2,363 a year per unit, or 18.95 percent more than tenants. The final CVA data shows that average taxes per residential unit are $2,388 a year, or 21.2 percent higher than the average multi-residential unit.

Comments:

Current Value Assessment - 1998:

The final tax impact study shows that 2,579, or 64 percent, of multi-residential properties would experience tax increases, while 1,463 properties, or 36 percent would see their taxes decrease due to reassessment. The average tax increase is 19.7 percent, while the average tax decrease is 12.7 percent Of the number of properties increasing, 257 properties would experience increases of greater than 100 percent, and 408 properties will receive tax increases of greater than $20,000. The average tax increase for the 408 properties with tax increases of greater than $20,000 is $67,528 or 28.03 percent or $512 per apartment unit. Appendix 5 shows the ranges of tax increases and decreases (percentage and dollar) for the multi-residential property class.

The Fair Municipal Finance Act (Nos. 1 and 2) and Small Business and Charities Assistance Act (Bill 16), which received Royal Assent on June 11, 1998, contain assistance measures that municipalities can use to offset or minimize the impact of reassessment. The options available to Council are set out below.

Implementation of CVA:

Option 1 - Capping Tax Increases:

The Small Business and Charities Assistance Act (Bill 16) allows municipalities to limit property tax increases on business properties, including multi-residential, to 2.5 per cent per year of 1997 taxes for 1998, 1999 and 2000. The Bill specifies that the 2.5 per cent cap must apply for all three years.

Council may wish to cap tax increases for multi-residential properties. However, it should be noted that capping is a short-term solution and, if used, cannot address the tax burden issue facing the multi-residential class in 1999 and 2000 -- Council's only opportunity is this year before applying the cap.

The final tax impact study showed that almost 60 percent of the properties in the multi-residential class would receive tax increases but the taxes paid by these properties represent only 30 percent of the total taxes paid by this class. As a result, capping tax increases at 2.5 percent significantly reduces the amount of decreases that can be provided over the three years.

Capping increases at 2.5 percent would limit the increases being paid in Year 1 to $4.9 million. Since capping must be funded within each property class, only $4.9 million in decreases would be allowed. However, the total decreases that would have been received without capping total $46.9 million. As a result, in Year 1, decreases would be limited to 10.5 percent ($4.9 million ) $46.9 million) of the decreases that would have been received without capping.

In order to finance the capped tax increases within the multi-residential class, tax decreases in Year 1 of a three-year capping program would be limited to 10.5 percent of the tax decrease that would have been received if there was no capping. In Years 2 and 3, tax decreases would be limited to 18.9 percent and 26.0 percent respectively of the tax decrease that would have been received without capping. For example, a property that would have received a 10 percent tax decrease without capping, would only receive 1.05 percent (10 percent V 10.5 percent) in the first year, 1.89 percent in the second year and 2.6 percent in the third year that capping is in place.

Option 2 - Phase-in Program:

The Fair Municipal Finance Act provides for the phasing-in of tax increases and decreases due to reassessment. The maximum phase-in period is 8 years. Any phase-in must be financed within each property class, so that tax decreases are phased-in to offset the phasing-in of tax increases within that class.

The phase-in options as they relate to the multi-residential property class have been reviewed. Annual tax increases that would result under different phase-in scenarios were calculated for each property. The eight scenarios analyzed cover no phase-in, as well as phase-in periods of 2 years through 8 years. Appendix 6 shows the number of assessment portions and ranges of annual tax increases and tax decreases (dollar and percentage changes) that would occur under these scenarios.

As shown in Appendix 6, 64 percent or 2,579 multi-residential properties would receive tax increases due to reassessment. The number of apartment units that would be affected by a tax increase is 121,987. The average tax increase is 19.7 percent, or $16,403 per property or $346 per unit. Of the properties receiving tax increases, 408 multi-residential properties, or 10 percent, would receive tax increases of greater than $20,000 with the average increase for these properties being $67,528 or 28.03 percent or $512 per apartment unit. For these properties, the 8-year maximum phase-in period would result in an average annual tax increase of 3.5 percent for the 53,801 apartment units affected.

Tenant Protection Act - Proposed Regulations for Automatic Rent Reductions:

The Tenant Protection Act came into force on June 17, 1998. Under this legislation, residential rents are automatically reduced if the municipal taxes for the rental properties are decreased by a prescribed percentage. The Act requires municipalities to inform landlords and tenants of the rent reductions through a notice that will specify:

(i)the fact that the lawful rents will be reduced;

(ii)the amount of the rent reduction as a percentage;

(iii)the date the reduction will take effect; and

(iv)the rights of the landlords and tenants to apply to the Ontario Rental Housing Tribunal if they disagree with the amount of the reduction.

The Ministry of Municipal Affairs and Housing has prepared a discussion paper proposing the regulations which would establish the conditions for automatic reductions in rents and municipalities were invited to provide their input on the proposed regulations.

Highlights of the proposed regulations are as follows:

(i)all rental properties would be affected by automatic rent reductions, including apartment buildings, rented townhouses, mobile home parks, boarding and lodging homes, rented condominiums, care homes, and "for-profit" cooperatives. Social housing and certain types of care homes are exempt from these rules;

(ii)the types of tax decreases that would result in automatic rent reductions include: reassessment changes, amalgamation of municipalities, the education portion of the municipal tax bill, and any phasing-in portion of the tax decrease up to 8 years;

(iii)the percentage of rent reduction would be calculated by multiplying the percentage of tax decrease between two previous consecutive years by 20 percent, which is a Ministry estimate of the proportion of rent for municipal taxes;

(iv)tenants would be eligible for automatic rent reductions only when the reduction is at least 1 percent, which means when the tax decrease must be 5 percent or more. When the rent reduction is less than 1 percent, tenants may apply to obtain the reduction to the Ontario Rental Housing Tribunal;

(v)municipalities would only be required to send the notice to landlords and tenants of residential properties with at least 7 units. However, municipalities may choose to send notices to those buildings with less than 7 units;

(vi)the effective date for automatic rent reductions resulting from a tax decrease would be January1, 1999;

(vii)The first notice for the rent reductions would be required to be given to tenants and landlords on or before November 30, 1998. For subsequent years, the notice would be required no later than August 31;

(viii)Municipalities would be allowed to select the most appropriate method of delivering the notice from a number of prescribed options including regular mail, hand delivery, leaving the notices where mail is ordinarily left for tenants, or courier delivery.

At its meeting on May 28, 1998, the Task Force adopted recommendations for changes to the Tenant Protection Act and the proposed regulations. The major changes requested included:

(i)authorization for the City to send notices to tenants in apartments with less than seven units;

(ii)reduction of the threshold for tax decreases which would cause an automatic rent reduction, from the proposed 5 percent to 2.5 percent;

(iii)legislation limiting the City's liability in the case of errors;

(iv)authorization for the City to rescind or amend notices;

(v)legal requirement for the landlord to post notice of all tax decreases and increases for a minimum of 120 days;

(vi)Provincial notification of both current and former tenants where there are successful assessment appeals and retroactive rent adjustments;

(vii)City consultation prior to finalizing the notice for automatic rent reductions.

The Task Force also adopted motions requesting the Province to declare the current lawful rent to be the rent at the time of the last legal increase and requested the Province to exempt Toronto from vacancy decontrol. The recommendations of the Task Force were adopted by Council at its meeting on June 3, 1998.

In the past, the assessment roll contained detailed information for each residential unit including name, mailing address and the assessed value for each unit. The final assessment roll for 1998 only includes individual tenants' names and the specific apartment unit within the building but individual assessments for each unit are no longer apportioned. It is anticipated that the City will be able to use the assessment roll as the source of data for the notices.

Assessment appeals will also impact the process of rent reductions as they are not considered as automatic rent reductions unless finalized in the same tax year as the appeal. Tenants will have to apply to the Tribunal for a rent reduction for appeals that are delayed. With the new provincial tax assessment system for 1998, it is expected that many residential property owners will file assessment appeals. There are issues regarding the administrative resources required as well as timing of the tax appeal decisions and notifying tenants of the individual tax decreases resulting from the appeals. It is very likely that appeals will not be heard this year or perhaps even in 1999 due to volume which could result in delays in legal rent reductions for 2 or more years (or until the appeal is finalized). The proposed regulations allow for tenants to apply for an adjustment in rent for the period covered by an appeal decision and will have one year from the date of the decision to make the application. However, the proposed regulations limit the retroactivity of rent reductions to the two preceding years. This is not an automatic reduction but rather a process where application must be made.

There is an equity issue in the decision as to which type of rental buildings should receive the notice for automatic rent reductions. While municipalities are not required by the proposed regulations to inform tenants of rental buildings with fewer than 7 units, the City may choose to include these buildings for automatic notification in order to ensure equity for all tenants. There are approximately 8,700 properties that contain 3-6 units which the City may wish to consider including in the notification program.

Since August 1, 1985 and up until June 17, 1998 when the Act cames into force, rent setting legislation related to the maximum rent which could be charged for a unit, not the amount of rent that the tenant in the unit actually paid. The amounts can be different. Maximum rent is the amount of rent a landlord could have charged for a unit had all the rent increase guidelines, as determined by the Province, been applied. The lawful rent is what the tenant pays (subject to certain rules). The landlord can charge the tenant an amount equal to the maximum rent, or a lower amount.

There are also tenant situations where a rent reduction resulting from a tax decrease in one year could translate into higher rents the following year. These would occur in buildings where the rents are below the legal "maximum" rent and would only apply to tenants who already reside in the building ("sitting" tenants). Under this scenario, landlords could increase rents to the "maximum" because a hearing before a tribunal is only needed for above "maximum" rents. The result would be that in one year a rent reduction would be obtained by the tenant due to a tax decrease but in the following year, the rent could be increased above the original rent level to bring it to the "maximum" allowable. This would mean the tenant would face a higher rent in the second year than originally.

Ministry staff estimate that approximately 50 percent of all tenanted units in Toronto are below "maximum" rent. If one assumes a turnover rate of 25 percent for all rental units as estimated by Ministry staff, then 12.5 percent (50 percent of total units x 25 percent turnover rate) of units below "maximum" rent would see new tenants and the remaining 37.5 percent sitting tenants could experience increases to the "maximum" rent and therefore not benefit from the rent reduction. Based on 168,341 rental apartment units in the multi-residential property class receiving tax decreases, there could be 63,128 units (168,341 x 37.5 percent) that could see increased rents to the "maximum" and not benefit from rent reductions in the long term. This is based on the assumption that all units below "maximum" would see tax decreases but even if they do not, increases to "maximum" rent are possible.

Automatic rent reductions due to tax decreases must take into account any tax relief provisions that municipalities implement due to reassessment. Consequently, any expected tax decrease that is reduced by capping or a phase-in must be taken into consideration in the automatic rent reduction.

Impact of Capping or Phase-in on Automatic Rent Reductions:

Appendix 7 shows the number of properties that would qualify for an automatic rent reduction under the Tenant Protection Act due to a decrease in municipal taxes under various phase-in scenarios. If there was immediate implementation of CVA, approximately 1,102 properties would qualify for automatic rent reductions. The average tax decrease is 12.7 percent, resulting in an average rent reduction of 2.5 percent. However, under an 8-year phase-in scenario, only 30 properties would qualify for automatic rent reductions.

Ministry of Housing staff have indicated that approximately 50 percent of the tenants in the City of Toronto are not currently paying maximum rents. Where tenants are not paying maximum rents, in one year a rent reduction would be obtained by the tenant due to a tax decrease but in the following year, the rent could be increased above the original rent level to bring it to the "maximum" allowable. Therefore, Appendix 7 also shows the estimated number of properties where tenants that would benefit from automatic rent reductions given the impact of vacancy decontrol and the fact that not all tenants pay maximum rent.

Analysis also shows that capping tax increases would significantly reduce the number of properties that would qualify for an automatic rent reduction. Due to the disproportionate share of 1997 taxes for properties that would experience tax decreases compared to properties that would experience tax increases, in Year 1 capping tax increases would result in limiting tax decreases to 10.5 percent of the tax decrease that would have been received if capping had not been chosen.

In order to qualify for an automatic rent reduction under the Tenant Protection Act, the proposed regulations specify that the property must experience at least a 5 percent decrease in municipal taxes on an annual basis. Using the 20 percent proportion of property taxes to total rent, this threshold would result in an automatic rent reduction of 1 percent. With only 10.5 percent of the percentage tax decrease being allowed in Year 1 under a capping scenario, only properties with tax decreases of more than 48 percent (i.e., 48 percent V 10.5 percent = 5.04 percent) would qualify for automatic rent reductions in 1998. The final tax impact study shows there are 18 such properties.

The impact of not having a threshold of 5 percent for tax decreases, or having a lower threshold as recommended by the Task Force, on the number of properties that would receive automatic reductions is shown below:

Table 3

Impact of Capping on Automatic Rent Reductions

Tax Decrease Threshold

Automatic Rent Reductions - Number of Buildings

Immediate CVA Implementation

Capping

5.0%

1,102

18

2.5%

1,277

156

0.0%

1,463

1,463

* Although all buildings would receive notices, the percentage rent reduction for many would be extremely small.

Permanent Rent Reductions:

The Tenant Protection Act, 1997 provides for reduction of the lawful rent which may be charged by the landlord by the reduction of municipal property taxes in certain prescribed circumstances. While the landlord is prohibited from charging rent in an amount greater than the lawful rent permitted under the Act by subsection 121(1), the lawful rent for the first rental period for a new tenant is set as the rent first charged to that new tenant (section 124). Thus, the landlord is free to initially charge new tenants whatever rent the market will bear.

A reduction in municipal property taxes does not result in a permanent reduction in the lawful rent which may be charged for a particular unit. The lawful rent is only reduced, in the prescribed circumstances, with respect to the existing tenant. Once that tenant leaves and a new tenant agrees to rent the premises, the lawful rent is reset to the amount first charged to that new tenant. Thereafter, the lawful rent can only be increased in accordance with the provisions of the Act.

It is important to note that the provisions of the Tenant Protection Act regarding automatic rent reductions resulting from reductions in municipal property taxes will not result in permanent rent reductions. The lawful rent is only reduced with respect to the existing tenant.

In addition, once that tenant leaves, and a new tenant agrees to rent the premises, the landlord is free to charge whatever rent the market will bear. Subsequent lease renewals with the new tenant are subject to the conditions set out in the Tenant Protection Act, until such time as that tenant vacates and the cycle begins again.

In order to equalize the tax rates between tenants and homeowners, Council may wish to shift some of the tax burden from the multi-residential class onto the residential class. While reducing the tax burden on the multi-residential class may benefit some tenants in the short term, the change in tax burden will not result in reduced rents across the City in the long term and any financial benefit may only accrue to the owners of multi-residential properties.

Tenant populations tend to be highly transient with an average annual turnover rate of approximately 25 percent. As rental apartments turn over from one tenant to the next, the landlord may charge whatever rent can be negotiated with the new tenant.

The vacancy rate for rental housing in Toronto was extremely low in 1997 at 0.8 percent. As a result, landlords with vacant apartments may be able to attract higher rents when leasing to new tenants than the rents that could otherwise be attained during times when residential vacancies are high. Pressure on the residential rental market will continue through 1998 due to a number of factors. The CMHC attributes the low vacancy rate to three factors: Toronto leads the rest of Ontario in employment growth; a stronger job market has increased in-migration to the Toronto area; and an improved job market has lead to income growth which has allowed households to uncouple. Considering these factors, the CMHC expects that the vacancy rate in Toronto will continue to decline in 1998.

Impact of Increased Profitability on Assessments:

The method of valuing multi-residential properties is based on the income generated. If rental properties experience increased rents because maximum rents can be increased upon unit vacancy, an increase in value would follow. However, to estimate the level of vacancies, the expected increase in rental income generated from new tenants and the resulting impact on value without such data is speculative and difficult to determine.

In general, increased rents will increase values and affect tax rates. If municipal budget expenditures remain constant until the year 2001 (the year of the next reassessment), an increased value of the multi-residential class with no change in the budget would result in a lower tax rate.

Preferred Option - Implementation of CVA:

To implement CVA, Council can phase-in or cap tax increases and decreases. As noted above, where tax relief is provided -- either through a phase-in program or a cap -- the immediate benefit to tenants and landlords of a tax decrease will be significantly diminished.

Council can opt for a phase-in program of up to eight years. The shorter the period for the phase-in program, the greater the number of tenants that will receive automatic rent reductions under the Tenant Protection Act. However, automatic rent reductions under the Act will likely only benefit tenants in the short term and will not result in reduced rents over the long term. Owners or landlords will be the taxpayers benefitting most from a tax decrease.

Council can opt for a capping program, but a capping program will virtually eliminate automatic rent reductions except for 18 properties, or 288 units. The final CVA data indicates that 10 percent of the properties in the multi-residential class will receive tax increases of greater than $20,000. These increases, with no cap, will result in 53,801 apartment units receiving increases in rent of more than 5.6 percent.

The preferred option for implementing CVA in Toronto is therefore a capping program. A phase-in program may benefit more tenants in the very short term but will only benefit landlords in the long term. A capping program will protect tenants occupying 121,987 apartment units from permanent rent increases resulting from property tax increases.

Options for Reducing Tax Burden on Multi-Residential Properties:

A.Establish a Uniform Municipal Tax Rate for Residential and Multi-Residential Property Classes:

The Education Quality Improvement Act (Bill 160) provides for a uniform tax rate for education purposes for all residential and multi-residential property owners across the Province. However, this uniformity in rates does not apply to the municipal share of taxes. The transition ratios, which determine the municipal tax rate for each property class, were established by the Province to maintain 1997 total tax burdens by class.

Council can, under the Fair Municipal Finance Act, establish a uniform tax rate for municipal purposes for both the residential and multi-residential class by adopting a tax ratio of 1.00 for the multi-residential class. The updated preliminary tax ratio for multi-residential as received from the Province was 5.2355.

A uniform municipal tax rate would result in a shift of $376.7 million in municipal taxes from the multi-residential property class to the residential property class. The decrease in total tax burden for multi-residential properties would be 65.9 percent, while the increase in total tax burden for the residential property class would be 25.6 percent, or an average of $610 per residential unit. The tax rate for the residential class would increase from 1.25 percent to 1.57 percent, while the tax rate for the multi-residential class would decrease from 4.60 percent to 1.57 percent. For individual property owners in these classes, the percentage increase or decrease would be over and above any tax change resulting from the implementation of current value assessment and would be an immediate, non-phaseable increase.

Appendix 8 shows the impact on both the residential and multi-residential classes, if Council were to phase-in a uniform municipal residential tax rate from two through eight years. The table shows that if a uniform tax rate were phased-in over two years, the impact would increase total taxes for the residential property class by $188.35 million annually, or 12.8 percent per year. The average tax increase per residential unit would be $305 per year. However, if the phase-in period for a uniform tax rate was extended to eight years, the annual tax shift to the residential class would be reduced to $47.09 million or 3.2 percent per year. The average tax increase per residential unit would be $76.00 per year.

B.Reduce the Tax Ratio for Multi-Residential Class:

The transition ratios, which determine the municipal tax rate for each property class, were established by the Province to maintain 1997 total tax burdens by class. Council can reduce tax burdens for certain property classes, by adopting tax ratios that are closer to the fairness ranges set by the Province.

The updated preliminary transition ratio calculated by the Province for the multi-residential property class is 5.2355. The fairness range established by the Province for the multi-residential class is 0.6 to 1.1. Appendix 9 illustrates the impact on the residential property class if Council wishes to reduce the tax burden for the multi-residential property class, by adopting lower tax ratios of either 2.0, 3.0, or 4.0. In each case, the calculation assumes that the tax ratios for the commercial and industrial classes would also be adjusted so that there would be no tax shift onto these classes.

As can be seen, in each case a shift in municipal taxes, from the multi-residential class to residential class, would occur. For individual property owners in these classes, the percentage increase or decrease would be over and above any tax change resulting from the implementation of current value assessment. However, if Council wishes to move towards equalizing the tax burdens paid by tenants and homeowners but limit the impact on the residential class, it could phase-in any change to the multi-residential tax ratio over a period of years, similar to that outlined in Appendix 8.

C.Reduce the Tax Ratio to Implement Uniform Education Tax Rate:

A transition ratio of 3.7530 has also been included in Appendix 9. This ratio is based on the preliminary method for calculating transition ratios released by the Province in the summer of 1997.

The revised preliminary calculations show deliberate tax shifts between property classes resulting in an increase of approximately $15.3 million onto the residential property class, based on the Province's transition ratios. The creation of a uniform Provincial residential education tax rate would have shifted $119.7 million from multi-residential taxpayers to residential taxpayers. The Province, in setting the transition ratios, has shifted back $85 million -- almost but not all of the $119.7 million and has left $15.3 million of new tax burden on the residential class.

The updated preliminary transition ratio of 5.2355 prescribed by the Province tries to negate the effect of the uniform education tax rate. Except for a $15.3 million shift onto the residential property class and a decrease of $4.6 million from the multi-residential class, the prescribed updated preliminary transition ratio almost nullifies the effect of a uniform residential education tax rate by filling the tax room created by the uniform residential education tax rate with municipal taxes.

Council can reduce the tax ratio for the multi-residential property class to reflect the impact of a uniform education tax rate. The tax ratio of 3.7530 reflects an additional shift of $104.3 million in education taxes that would have occurred due to the Province establishing a uniform education tax rate and results in a tax rate for the multi-residential class of 3.76 percent. However, the tax shift would increase total taxes for the residential property class by 7.08 percent, or an average of $169 per residential unit.

For individual property owners in the residential class, this increase would be over and above any tax change resulting from the implementation of current value assessment, and would result in some homeowners who would have received a tax decrease, now receiving a tax increase. In order to minimize the impact on the residential class, Council could also opt to phase-in this change over a period of years by explicitly changing the tax ratio each year.

D.Shift Taxes over Residential Phase-in Period - "The Kinahan Concept":

Another option to be considered in order to achieve the total equalization of the multi-residential tax rate to the residential, would be to calculate the dollar change from the residential phase-in options and use that value to be the tax shift from multi-residential to residential.

The following table is an example of this concept, based on immediate implementation as well as phase-in periods of 3 and 8 years for the residential property class:

Table 4

Shift Taxes over Residential Phase-in Period - "The Kinahan Concept"

No Phase-in

3 Year Phase-in

8 Year Phase-in

Tax Shift Required to Achieve Uniform Residential and Multi-Residential Tax Rate

$376.7 Million

$376.7 Million

$376.7 Million

Annual Tax Shift within Residential Class -

Increases/Decreases

$162.8 Million

$54.3 Million

$20.4 Million

Number of Years to Achieve Equity

2

7

18

Annual % Tax Change
Residential

11.04%

3.68% 1.38%
Multi-Residential

-28.47%

-9.49% -3.57%

The total tax shift required to achieve a uniform residential and multi-residential rate is $376.7 million. If CVA were implemented immediately, $162.8 million would shift between taxpayers with tax increases and taxpayers with tax decreases in the residential class. Using this concept, and shifting an equivalent amount of taxes from the multi-residential class, the theory is that residential decreases would be eliminated and tax increases would be doubled, and equity would be achieved in 2 years. This concept would require an annual allocation of tax shift to achieve the tax changes noted above.

It should be noted that legislation does not allow Council to phase-in tax increases resulting from a shift in tax burden from other classes. Also, if Council wishes to reduce the tax burden of the multi-residential class, and also opts for capping tax increases due to the reassessment, it can only shift taxes in 1998 prior to applying the cap. Once the cap is in place, Council cannot shift tax burdens and would have to wait until the next reassessment, and the end of the capping period, to reduce the tax burden of the multi-residential class.

None of the options for reducing the tax burden for the multi-residential property class are recommended at this time. Additional work is required to define and develop tax policies that would ensure property tax equity for both homeowners and tenants. The definition of 'fairness' as it relates to the tax burden for the multi-residential class must be considered within the context of other tax structures, and must balance the needs of tenants in both the residential and multi-residential property classes. Additional work is also required so that any reduction in tax burden for the multi-residential class will provide the benefit intended (i.e., permanent rent reductions and increased rental housing affordability).

New Multi-Residential Class:

The Fair Municipal Finance Act allows municipalities to request a separate class for new rental apartment buildings with seven or more units. The legislation permits municipalities to request the new multi-residential class at any time. Municipalities can tax these new buildings at a lower rate than the multi-residential class. Properties would remain in the new apartment class for up to eight years, after which they would be moved to the multi-residential property class.

The intent of the legislation is to encourage investment in new rental housing, thus helping to create jobs and growth in the construction sector. By encouraging rental building construction, it will increase the supply of rent housing.

It is not recommended that Council request the creation of a separate class for new constructed multi-residential buildings until such time that Council adopts a policy respecting tax burdens between the residential and multi-residential property classes. If a new apartment class was created, and there was no change in existing tax burdens between these classes, these properties would face significant tax increases once they were moved from the new class to the multi-residential class.

Conclusion:

It is recommended that Council cap tax increases for multi-residential properties at 2.5 percent per year for 1998, 1999 and 2000. To fund the capping program within the multi-residential class, it will be necessary to proportionately limit tax decreases. Although Council could opt for a phase-in program to mitigate the impact of reassessment, a phase-in program would not provide the extent of relief as capping would. A capping program will protect tenants occupying 121,987 apartment units from large rent increases resulting from property tax increases.

Unless Council opts for immediate implementation of CVA for the multi-residential property class, few tenants will see significant reductions in their rents due to a reduction in municipal taxes. Sitting tenants that are currently not paying maximum rents could see increased rents to the "maximum" and not benefit from rent reductions in the long term. A phase-in program may benefit more tenants in the very short term but will only benefit landlords in the long term.

No other tax policy options, including shifting taxes from the multi-residential property class, are recommended at this time. Additional work is required and should be continued to develop a permanent solution to ensure property tax equity between homeowners and tenants, including defining 'fairness' as it relates to tax burdens for all classes. The definition of 'fairness' must be considered within the context of other tax structures, and must balance the needs of all taxpayers, including tenants in both the residential and multi-residential property classes. Additional work is also required so that any reduction in tax burden for the multi-residential class will provide the benefit intended (i.e., permanent rent reductions and increased rental housing affordability).

Contact Names:

Lynne Ashton392-7828

Paul Wealleans392-6955

Bill Wong392-9148

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List of Appendices

Appendix 1Occupied Dwellings by Tenure - Ward Totals

Appendix 2Current Value Assessment and Total Taxes by Structure Type

Appendix 3Current Value Assessment and Total Taxes - Residential Properties (3-6 Units)

Appendix 4Average Taxes per Unit - Residential vs. Multi-Residential

Appendix 5Ranges of Tax Decreases and Increases - Multi-Residential Property Class

% Tax Change

$ Tax Change

Appendix 6Phase-in Distribution for Multi-Residential Property Class

Range of Dollar Increases and Decreases

Range of Percentage Increases and Decreases

Appendix 7Automatic Rent Reductions - Impact of Phase-in Program

Appendix 8Phased-in Reduction of Multi-Residential Tax Burden - Impact on Residential/Multi-Residential Property Classes

Appendix 9Impact of Reduction to Multi-Residential Tax Ratio

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Appendix 1

Occupied Dwellings by Tenure - Ward Totals

Ward

Owned

Rented

Total

Number of Units

% of Ward

% of

City

Number of Units

% of Ward

% of

City

Number of Units

% of City

1

East York

20,363

46.2%

4.8%

23,683

53.8%

5.3%

44,046

5.1%

2

Lakeshore-Queensway

17,385

51.7%

4.1%

16,247

48.3%

3.6%

33,632

3.9%

3

Kingsway-Humber

16,647

55.3%

3.9%

13,461

44.7%

3.0%

30,108

3.5%

4

Markland-Centennial

17,049

63.9%

4.0%

9,633

36.1%

2.1%

26,682

3.1%

5

Rexdale-Thistletown

13,906

53.7%

3.3%

12,013

46.3%

2.7%

25,919

3.0%

6

North York Humber

13,315

46.6%

3.2%

15,234

53.4%

3.4%

28,549

3.3%

7

Black Creek

11,369

38.3%

2.7%

18,331

61.7%

4.1%

29,700

3.4%

8

North York Spadina

13,985

46.7%

3.3%

15,958

53.3%

3.6%

29,943

3.4%

9

North York Centre South

14,679

61.0%

3.5%

9,400

39.0%

2.1%

24,079

2.8%

10

North York Centre

16,199

60.8%

3.8%

10,464

39.2%

2.3%

26,663

3.1%

11

Don Parkway

13,743

37.5%

3.3%

22,901

62.5%

5.1%

36,644

4.2%

12

Seneca Heights

17,631

59.5%

4.2%

12,005

40.5%

2.7%

29,636

3.4%

13

Scarborough Bluffs

18,664

53.8%

4.4%

16,025

46.2%

3.6%

34,689

4.0%

14

Scarborough Wexford

12,498

53.9%

3.0%

10,711

46.2%

2.4%

23,209

2.7%

15

Scarborough City Centre

18,769

51.6%

4.4%

17,597

48.4%

3.9%

36,366

4.2%

16

Scarborough Highland Creek

18,193

58.3%

4.3%

13,004

41.7%

2.9%

31,197

3.6%

17

Scarborough Agincourt

17,024

68.9%

4.0%

7,686

31.1%

1.7%

24,710

2.8%

18

Scarborough Malvern

19,341

65.2%

4.6%

10,320

34.8%

2.3%

29,661

3.4%

19

High Park

13,080

36.3%

3.1%

22,921

63.7%

5.1%

36,001

4.1%

20

Trinity Niagara

10,835

45.8%

2.6%

12,843

54.2%

2.9%

23,678

2.7%

21

Davenport

14,318

50.2%

3.4%

14,201

49.8%

3.2%

28,519

3.3%

22

North Toronto

15,668

38.5%

3.7%

25,032

61.5%

5.6%

40,700

4.7%

23

Midtown

13,599

37.6%

3.2%

22,566

62.4%

5.0%

36,165

4.2%

24

Downtown

9,540

25.3%

2.3%

28,203

74.7%

6.3%

37,743

4.3%

25

Don River

10,934

31.9%

2.6%

23,338

68.1%

5.2%

34,272

3.9%

26

East Toronto

17,834

56.3%

4.2%

13,823

43.7%

3.1%

31,657

3.6%

27

York Humber

14,567

47.2%

3.5%

16,281

52.8%

3.6%

30,848

3.5%

28

York Eglinton

10,959

43.1%

2.6%

14,489

56.9%

3.2%

25,448

2.9%

Total - All Wards

422,094

48.5%

100.0%

448,370

51.5%

100.0%

870,464

100.0%

Source: Ministry of Finance, Assessment Information, 1996.

Insert Table/Map No. 1

revised appendix 2 - multi-residential property class

Insert Table/Map No. 2

appendix 3 - multi-residential property class

Insert Table/Map No. 3

appendix 4 - multi-residential property class

Insert Table/Map No. 4

appendix 5 - multi-residential property class

Insert Table/Map No. 5

appendix 5 cont'd - multi-residential property class

Insert Table/Map No. 6

appendix 6 - multi-residential property class

Insert Table/Map No. 7

appendix 6 cont'd - multi-residential property class

Insert Table/Map No. 8

appendix 7 - multi-residential property class

Insert Table/Map No. 9

appendix 8 - multi-residential property class

Insert Table/Map No. 10

appendix 9 - multi-residential property class

The Strategic Policies and Priorities Committee also submits the following report (July 7, 1998) from the Multi-Residential Working Group, addressed to the Assessment and Tax Policy Task Force:

Purpose:

To provide information to Council on the potential to ensure that multi-residential tax decreases have a positive impact on tenant rents.

Funding Source, financial Implications and Impact Statement:

None to report

Recommendations:

The Working Group recommends that Council adopt the following:

(1)That, given that consultations have not provided a guaranteed strategy for ensuring that tax reductions will go to tenants:

(a)the City continue to lobby the Provincial Government to achieve legislative and regulatory reform which will guarantee that tenants receive the benefit of tax reductions over the long term, including the removal of loopholes that now exist

(b)City staff develop detailed proposals to achieve these objectives; and

(c)there be no equalization tax shifts between and the multi-residential class and the residential class until there are guarantees that the tenants will receive the benefits.

(2)That the City advocate a "De-Linking" process which separates the tax bill from the rent bill and that City staff develop a programme which will allow this "de-linking" to take place and a complete set of provincial and/or municipal legislative, regulatory and administrative initiatives which will achieve this objective.

(3)Because, under the current legislation, tax increases will be absorbed by tenants while tax decreases will largely go to landlords, and because tenants are the most unfairly taxed group of residents in the city, Council should adopt a strategy which minimizes the tax changes effecting tenants. Options considered by the Committee included:

(i)that a 2.5 percent cap be implemented on rent increases and decreases for multi-residential properties, or;

(ii)that tax changes be phased in over a number of years for multi-residential properties.

(4)That, in accordance with the preference expressed by landlord representatives, the Province be requested to amend the legislation to provide that the landlords be required to pass on any decreases in taxation to tenants.

(5)That all tenants be informed of any tax decreases by the City and that a plan for such notification be developed and that a budget for this undertaking be produced and submitted to the Budget Review Committee following consultations with the Federation of Metro Tenants Associations.

(6)That, for new rental multi-residential buildings, a the City establish a process to achieve equalized taxation between multi-residential and residential properties. This would be accomplished by creating a separate class of property for new rental multi-residential buildings and conversions from office/industrial buildings to rental multi-residential.

(7)That the Task Force investigate the appropriateness of clawing back the education equalization imposed by the Province, even recognizing the inability of the City to ensure that the tax reductions will benefit the tenants.

Background:

The Multi-Residential working group was established by Council on May 13th to "initiate discussion with landlords in order to obtain their support for regulatory changes that would insure that reductions in multi-unit residential taxes result in benefit to tenants".

The Working Group met four times including meetings with representatives from landlord and tenant organizations on two occasions. Landlords were represented by:

Phil Dewan, of the Fair Rental Policy Organizations (FRPO)

Gary Griesdorf, of the Greater Toronto Apartment Association (GTAA)

Tina Schickedanz, of the Tenant Landlord Coalition

Heather Waese, of Spar Property

Mary MacDonald, of the Multiple Dwelling Standards Association (MDSA)

Samuel Lewkowicz of the Multiple Dwelling Standards Association also contacted the Working Group by fax. Several tenants also participated in the consultation meetings to provide their views.

The working group attempted to find points of consensus with landlord organizations, tenant organizations and the City regarding changes to the Tenant Protection Act that could provide some certainty that tax cuts would benefit tenants now and in the long term.

City staff made a detailed report to the Assessment and Tax Policy Task Force on May 28, 1998. The report reviewed proposed regulations under the Tenant Protection Act, 1997(TPA) and their impact on the City, and on tenants. The Task Force made several recommendations regarding changes to the TPA. These recommendations were subsequently adopted by Council. These recommendations formed the basis for discussion with landlords at the Working Group meetings.

Issues dealt with by the Working Group are discussed below under the following headings:

(1)Administrative Issues

(2)Threshold for Automatic Rent Decreases

(3)Notification about Tax Decreases

(4)Municipal Property Tax Appeals

(5)Vacancy Decontrol and Maximum Rent

Comments:

(1)Administrative Issues:

The May 28, 1998 report outlined a number of regulatory amendments relating to administrative issues for the City. Landlord and Tenant representatives supported the requests. In particular, there was support for having clarity in the regulations about municipal ability to rescind and amend incorrect notices.

(2)Threshold for Automatic Rent Decreases:

The proposed regulations set out that tenants would be entitled to an automatic rent decrease where the municipal property tax decrease is 5 percent or greater. The May 28, 1998, recommendation was that the threshold be reduced to 2.5 percent. Landlord representatives agreed with the reduction and, in fact, suggested that it be reduced to 0 percent.

(3)Notification about Tax Decreases:

The City has sought methods of ensuring that new tenants are made aware of mandatory rent reductions resulting from tax reductions. Landlord representatives supported the concept of posting the notices in general, but were concerned about having posting as a legislated requirement. They did not believe that they could guarantee that the notice would remain posted. They suggested that landlords could serve a copy of the notice on any new tenant along with their lease. Although landlords were willing to entertain several notification options, landlords could not reach a clear agreement on including any notification option in the regulations as a requirement.

(4)Municipal Property Tax Appeals:

On May 28, 1998 the Task Force made recommendations about changes to the regulations to ensure that tenants receive, retroactively, the benefit of any tax savings resulting from appeals. Landlords did not agree to support those recommendations citing administrative burden and complexity. There was some discussion on the part of the landlords about retroactively raising rents to cover the cost of filing tax appeals or the cost of tax increases resulting from appeals. Landlords raised doubts about whether tenants who left the unit owing back rents or damages should have the right to make a claim on retroactive rent reductions. No landlord groups were prepared to formally support any program that facilitated access to retroactive rent reductions even where appeals resulted in retroactive tax reductions.

(5)Vacancy Decontrol and Maximum Rent:

The most complex issue was that of maximum rent and vacancy decontrol.

Tenant Protection Act, 1997 (TPA) requires landlords to reduce rents whenever a tax reduction above 5 percent occurs. However, the TPA also allows landlords to raise the rents of sitting tenants if the current "lawful rent" is below the "maximum rent". (The maximum rent is fixed by the province in accordance with their rent increase formula.) A rent reduction resulting from a tax reduction would automatically take the rent below the "maximum". The landlord would be entitled to raise the rent by that amount within one year, effectively eliminating the mandatory rent reduction.

Vacancy decontrol allows landlords to set rents at any level once a unit is vacant. Again, rent reductions resulting from tax reductions do not limit the power of landlords to raise the rents to any level and recoup some or all of the mandatory rent reduction.

There was no agreement from the landlords to support the City in lobbying the province to remove maximum rent and vacancy de-control provisions from TPA. Some landlords expressed the belief that the maximum rent provisions no longer apply to many of units, however, subsequent discussions with the Province confirm that these provisions apply even when maximum rent has been reached. (See Appendix "A")

FRPO expressed a strong belief that rents would fall and stay low once a tax reduction occurred. FRPO believed that market forces provided an adequate guarantee of long term lowered rents, and that the market was the only appropriate mechanism for protecting tenants. They stated flatly that FRPO was unwilling to support any efforts to reverse this tendency in the legislation.

Other representatives express more varied views. A number of alternate ideas and proposals about maximum rent and vacancy decontrol were put forward as follows:

(1)One-time Change to Maximum Rent:

It was proposed that maximum rent on units be allowed to decrease or increase on a one time basis to reflect tax changes. Some questions were raised about whether a one-time only adjustment would be sufficient. Landlords indicated flexibility about whether future changes could also be contemplated.

However, landlords were not prepared to eliminate the power to raise rents using maximum rent ceilings other than those created by a tax cut. Since the most recent studies indicate that roughly 50 percent of all units are below maximum rent, a significant number of units would still be subject to the re-raising of rents following a tax based rent reduction.

In addition, this proposal fails to provide any mechanism for ensuring that rents stay reduced when a new tenant moves in. FRPO's argument that rents would stay low because tax decreases would drive down the market raises many questions. Market rents are dependant on several variables, however, it is difficult to imagine that the market will push down rent levels for new tenants while Toronto's vacancy rate is just .8 percent. Vacancy rates are forecasted to go lower, and remain well below the healthy vacancy rate, in the range of 2.5 percent to 5 percent.

(2)Voluntary Lowered Maximum Rent:

Mary MacDonald of the MDSA proposed a system of voluntary compliance, whereby individual landlords would agree to lower their maximum rent to the current lawful rent, in exchange for which, the City would classify them at a lower tax rate.

Ms. MacDonald's support for the elimination of maximum rent provisions did not receive any clear support from other landlords. Ms. MacDonald's proposal also violates the City's statutory obligation to set a single rate for multi-residential tax class, and would prove difficult to enforce.

(3)"De-Linking":

A tenant representative suggested that the City separate property taxes from rents. The landlords would act as tax collectors, issuing a bill for rent and a second bill for taxes. This "de-links" property taxes from rents and ensures savings are passed on to tenants.

There are precedents for this model in the treatment of land-lease communities and mobile home parks. Tenants own their units and rent the land and services. While this provides some advantages, problems arise when taxes not paid or liens attached (i.e. one could not attach a lien against the trailer or an apartment for unpaid taxes).

Under this model the tenants would directly receive benefit of tax decreases, however, this would require several legislative amendments and significant shift in treatment of property taxes. It would create an administrative burden in terms of tax collection for the landlord and for the municipality and would result in very limited options for the municipality when taxes were not paid. There was no clear support for this model form the landlords' representatives.

None of the models proposed met the objectives of the City and had broad support among the landlords' and tenants' representatives. Only a "market forces" approach received strong support from landlords.

The Tenant/Landlord Coalition agreed with the position of the landlords. The Federation of Metro Tenants Associations, by far the largest tenant body, strongly opposed the positions taken by the landlords. FMTA felt that there was no way to ensure that tenants benefited from any tax cuts over the long term under the current law and indicated its opposition to tax cuts under the current circumstances. (see appendix "B")

While there are several proposals now circulating, including proposals for legislative and regulatory changes adopted by Council, there is no consensus at this time on any of the major points considered critical to ensuring tenants benefit from multi-unit residential tax reductions. It may be possible to develop a broader consensus over the 1998-2001 period that caps would apply to multi-unit residential properties.

Conclusion:

The Multi-Residential Working Group was established to "initiate discussion with landlords in order to obtain their support for regulatory changes that would ensure that reductions in multi-unit residential taxes result in benefit to tenants".

After meetings with landlord and tenant representatives, we were unable to reach agreement on anything but minor administrative issues. Landlords' representatives are unwilling to support legislative changes that would address the concerns raised by the City.

(Copies of Appendices A and B referred to above were previously circulated to all Members of Council with the agenda of the Assessment and Tax Policy Task Force, and copies thereof are on file in the office of the City Clerk.)

(City Council at its Special Meeting on July 21 and 23, 1998, had before it, during consideration of the foregoing Clause, the following report (July 23, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

To obtain Council's authority for the adoption of by-laws for the levying and collection of taxes for the 1998 taxation year, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and for the levying of a special charge for 1998 for certain Business Improvement Areas. Also attached for Council's information are draft by-laws concerning the residential property class phase-in program with or without a threshold and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes.

Recommendations:

It is recommended that:

(1)Council authorize the levy and collection of taxes for the 1998 taxation year, the imposition of a penalty charge for non-payment of 1998 taxes, the provision of interest to be added to tax arrears and to establish tax ratios for the year 1998;

(2)Council approve the levy of a special charge for 1998 for the following Business Improvement Areas and to provide for its collection: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St.Lawrence Neighbourhood; Upper Village and Weston;

(3)authority be granted for the introduction of the necessary bills in Council to levy taxes for the year 1998 and to provide for the collection of taxes for 1998 other than those levied under By-law No. 10-1998, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and to levy a special charge for 1998 for certain Business Improvement Areas and provide for its collection, in the form or substantially in the form of the draft by-laws attached hereto; and

(4)subject to Council adopting a residential property class phase-in program with or without a threshold; and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes, that leave be granted for the introduction of the necessary bills in Council to give effect thereto in the form or substantially in the form of the draft by-laws attached hereto.

Comments:

The draft by-laws are: (1) to levy and collect taxes for the year 1998, to impose a penalty charge for non-payment of 1998 taxes, to provide for interest to be added to tax arrears and to establish tax ratios for the year 1998; (2) to levy a special charge in 1998 for certain Business Improvement Areas and to provide for its collection; (3) to phase-in tax changes in the residential property class with or without a threshold; and (4) to cap increases and decreases of property taxes on the commercial, industrial and multi-residential classes for the taxation years 1998, 1999 and 2000.

The levying by-law sets the final tax rates for all property classes, which are set out in Sections 6 and 7 of the attached draft by-law. The tax rate for the residential property class of 1.259702 percent includes a non-phaseable portion of .0217 percent relating to the finalization of various provincial components of the bill -- provincial tax ratios and full use of the provincial education tax room. The by-law imposes a penalty rate of 1.25 percent per month for the non-payment of taxes in the 1998 taxation year and provides for the payment of interest at 1.25 percent per month to be added to tax arrears. The by-law also establishes tax ratios.

Budgets for the following Business Improvement Areas have already been adopted by Council: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St. Lawrence Neighbourhood; Upper Village and Weston. It is now necessary to levy and collect a special charge for the Boards of Management of each respective Business Improvement Area.

The attached draft by-laws, which have been prepared by the City Solicitor, give effect to the recommendations in my reports respecting a residential property class phase-in program with or without a threshold (dated July 2, 1998); and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential (dated June 29, 1998) and commercial and industrial property classes (dated June 26, 1998).

Contact Name:

Paul Wealleans, Phone: 397-4208)

(A copy of each of the by-laws, referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July21, 1998) from Councillor Elizabeth Brown, Rexdale-Thistletown:

Please find attached a copy of a letter and petition I have received from my constituents. These were sent to me by residents residing in multi-residential as well as single-family dwellings. I feel that these will be of interest to my colleagues.

As you will note, a number of residents reside outside of my Ward, however, the majority reside inside my Ward. There are over 690 signatures on the petition (the entire list has been submitted to the clerk for the record).

Thank you for taking the above-noted into account.)

(A copy of the letter and petitions, referred to in the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (July14, 1998) from Mr. Julian Smit, Tenant Landlord Coalition for Equal Taxation, submitting a petition signed by approximately 348 individuals demanding that the multi-residential class pay the same property tax rate as the residential class, a copy of which is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (May1, 1998) from Ms. A. Colletti-Ferrari, Toronto, Ontario, regarding the multi-residential property class.)

3

Property Tax Relief for Low-Income Seniors

and Disabled Persons

(City Council at its Special Meeting on July 21 and 23, 1998, amended this Clause by:

(1)amending the recommendations embodied in the transmittal letter dated July 12, 1998, from the Assessment and Tax Policy Task Force as follows:

(a)by adding the words "or a person by reason of age or infirmity who is in receipt of a pension" at the end of Recommendation No. (2)(i), so that Recommendation No.(2) shall now read as follows:

"(2)the following eligibility criteria for low-income seniors be adopted:

To be eligible as a low-income senior, a person:

(i)must be 65 years of age or older, or in the case of a widowed person receiving the Spouse's Allowance, between the age of 60 and 64, or a person by reason of age or infirmity who is in receipt of a pension;

(ii)must have owned and occupied the residential property for one year; and

(iii)must be receiving the Guaranteed Income Supplement (GIS) under the Old Age Security Act, and in the case of widowed person between the age of 60 and 64, receiving a Spouse's Allowance under the Old Age Security Act;";

(b)by adding to Recommendation No. (2) the following:

"and further, that the Chief Financial Officer and Treasurer and the Commissioner of Community and Neighbourhood Services strike a working group that includes staff and representatives from community senior citizens' organizations to develop criteria for an enhanced residential property tax relief program, other than tax deferrals in respect of all or part of assessment-related increases for low-income seniors and report back to the Assessment and Tax Policy Task Force by September, 1998"; and

(c)by adding to Recommendation No. (3)(b) the words "other than tax deferrals" after the words "property tax relief program", so that such recommendation shall now read as follows:

"(3)(b)the Chief Financial Officer and Treasurer and the Commissioner of Community and Neighbourhood Services strike a working group that includes staff and representatives from community organizations including ARCH to develop criteria for an enhanced residential property tax relief program, other than tax deferrals, in respect of all or part of assessment-related tax increases for low-income disabled persons and report back to the Task Force by September, 1998;";

(2)to provide that for assessment-related increases, the amount eligible for deferral shall be dependent on income as follows:

Amount of assessment-related

Combined House Incomeincrease eligible for deferral (percentage)

GIS approx. $20,000.00

or less100%

more than $20,000.00 and less

than or equal to $25,000.0075%

more than $25,000.00 and less

than or equal to $30,000.00 50%

more than $30,000.00 and less

than or equal to $35,000.00 25%

(3)to provide that all seniors, as defined by Council, be eligible for relief from an assessment related tax increase as follows:

(a)the first group to be eligible as per the low-income criteria being established, with the deferral being at a zero percent interest rate; and

(b)the second group to include any other senior property owner, with the deferral being at an interest rate equal to the rate being paid by the City (thus being at no expense to the City);

and the Province of Ontario be requested to enact enabling legislation in this regard; and

(4)by adding thereto the following:

"It is further recommended that:

(a)an amount of $250,000.00 be provided in the 1998 Operating Budget to fund the first year of the tax deferral program for low-income seniors and low-income disabled persons, and that such funds be provided from the Corporate Contingency Account;

(b)the Province of Ontario be requested to extend the tax deferral program to allow municipalities the option to provide tax deferrals to all low-income residents who own residential property; and

(c)the Chief Financial Officer and Treasurer be requested to submit a report to the appropriate Committee on the details of the mechanism for establishing the tax deferral program.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 12, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on July, 6, 7, 11, and 13, 1998, recommended to the Strategic Policies and Priorities Committee and City Council that:

(1)a tax deferral program be approved to provide relief from assessment-related tax increases for eligible low-income seniors and low-income disabled persons, pursuant to the Fair Municipal Finance Act;

(2)the following eligibility criteria for low-income seniors be adopted:

To be eligible as a low-income senior, a person:

(i)must be 65 years of age or older, or in the case of a widowed person receiving the Spouse's Allowance, between the age of 60 and 64; and

(ii)must have owned and occupied the residential property for one year; and

(iii)must be receiving the Guaranteed Income Supplement (GIS) under the Old Age Security Act, and in the case of widowed person between the age of 60 and 64, receiving a Spouse's Allowance under the Old Age Security Act;

(3)(a)the following eligibility criteria for low-income disabled be adopted:

To be eligible as a low-income disabled person, a person:

(i)must have owned and occupied the residential property for one year; and

(ii)must be receiving disability benefits under: (a) the Ontario Disability Support Program (ODSP); or (b) the Family Benefits Act (FBA); or (c) the Guaranteed Annual Income System (GAINS);

(b)the Chief Financial Officer and Treasurer and the Commissioner of Community and Neighbourhood Services strike a working group that includes staff and representatives from community organizations including ARCH to develop criteria for an enhanced residential property tax relief program in respect of all or part of assessment-related tax increases for low-income disabled persons and report back to the Task Force by September, 1998;

(4)the Province be requested to enact special legislation with an effective date of January 1, 1998, to authorize the City to pass by-laws providing for residential tax deferrals whether or not a residential property's assessment increases as a result of the implementation of Current Value Assessment, and that such legislation provide for the amount of taxes paid by the City to the school board to be reduced accordingly;

(5)eligible low-income seniors and low-income disabled persons be also permitted to apply for a deferral of up to $600.00 per year of the owner's residential tax bill in the program described in Recommendation 4 above;

(6)(i)the interest rate provided for the assessment-related deferral program in recommendation (1) be set at 0.0 percent;

(ii)the interest rate provided for the non-assessment related $600.00 tax deferral program in recommendations (4) and (5) be set at 0.0 percent;

(7)the administrative terms and conditions set out in the report (June 30, 1998) from the Chief Financial Officer and Treasurer, as amended by the recommendations above be adopted;

(8)authority be granted for the introduction of the necessary Bills in Council to give effect to the tax deferral program; and

(9)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

The Task Force reports having requested the Chief Financial Officer and Treasurer to report directly to City Council on July 21, 1998, providing an analysis of the cost implications to the City leading up to maturity of the tax relief programs noted above.

Background:

The Assessment and Tax Policy Task Force had before it a report (June 30, 1998) from the Chief Financial Officer and Treasurer providing a policy respecting property tax relief for low-income seniors and low-income disabled persons, pursuant to the Fair Municipal Finance Act.

The Task Force also had before it the following communications respecting the Current Value Assessment and property tax relief for low-income seniors and disabled persons:

(a)(July 3, 1998) from Councillor Anne Johnston, Chair, The Seniors' Task Force;

(b)(July 6, 1998) from Mr. Harry Beatty, A Legal Resource Centre for Persons with Disabilities;

(c)(July 1, 1998) from Mrs. Verna M. Averill; and

(d)(July 3, 1998) from Mr. George Thull.

(Copies of the communications referred to in the transmittal letter of the Assessment and Tax Policy Task Force have previously been circulated to all Members of Council with the agenda of the Assessment and Tax Policy Task Force and copies thereof are on file in the office of the City Clerk.)

--------

(Report dated June 30, 1998, addressed to

the Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

To provide a policy respecting property tax relief for low-income seniors and low-income disabled persons, pursuant to the Fair Municipal Finance Act.

Funding Source, Financial Implication and Impact Statement:

The recommended property tax deferral program for low-income seniors and low-income disabled persons, with interest being charged on deferred amounts, has no direct funding implications.

There are funding impacts associated with other tax relief schemes. The amount of the impact is contingent on the type of the program, the eligibility criteria, actual participation rates, and whether or not any phase-in policy is adopted for the residential property class. These other schemes may result in an annual impact ranging from several thousand dollars for a deferment program in which an interest subsidy is provided, to tens of millions of dollars for cancellation programs, to be funded from the operating budget.

Recommendations:

It is recommended that:

(1)a tax deferral program be approved to provide relief from assessment-related tax increases for eligible low-income seniors and low-income disabled persons, pursuant to the Fair Municipal Finance Act;

(2)the following eligibility criteria for low-income seniors be adopted:

To be eligible as a low-income senior, a person:

(i)must be 65 years of age or older, or in the case of a widowed person receiving the Spouse's Allowance, between the age of 60 and 64;

(ii)must have owned and occupied the residential property for the past three years; and

(iii)must be receiving the Guaranteed Income Supplement (GIS) under the Old Age Security Act, and in the case of widowed person between the age of 60 and 64, receiving a Spouse's Allowance under the Old Age Security Act;

(3)the following eligibility criteria for low-income disabled be adopted:

To be eligible as a low-income disabled person, a person:

(i)must have owned and occupied the residential property for the past three years; and

(ii)must be receiving disability benefits under: (a) the Ontario Disability Support Program (ODSP); or (b) the Family Benefits Act (FBA); or (c) the Guaranteed Annual Income System (GAINS);

(4)the Province be requested to enact special legislation to authorize the City to pass by-laws providing for residential tax deferrals whether or not a residential property's assessment increases as a result of the implementation of Current Value Assessment, and that such legislation provide for the amount of taxes paid by the City to the school board to be reduced accordingly;

(5)subject to the special legislation referred to in recommendation (4) being enacted, eligible low-income seniors and low-income disabled persons be permitted to apply for a deferral of up to $600.00 per year of the owner's residential tax bill;

(6)the amounts deferred be subject to simple interest at a rate not to exceed the market rate as determined by the City as authorized by the Fair Municipal Finance Act;

(7)the interest rate provided for in recommendation (6) be set at 6.0 percent for 1998;

(8)authority be granted for the introduction of the necessary Bills in Council to give effect to the tax deferral program; and

(9)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background:

Pursuant to the Fair Municipal Finance Act, 1997 (No.1 and No. 2 - the Act), Council must pass a by-law providing for deferrals or cancellation of, or other relief in respect of all or part of assessment-related tax increases on property in the residential/farm property class for owners who are, or whose spouses are, low-income seniors or low-income persons with disabilities as defined in the by-law. The Act provides Council some discretion respecting the adoption of a criteria for "low-income", "senior", and "disabled person", as well as in defining the form of tax relief, provided it is in respect of assessment-related tax increases.

"Assessment-related" tax increases means tax increases beginning in 1998. If a tax increase is reduced as a result of a by-law to phase-in increases and decreases, then the relief can only be given on the portion of the assessment-related increase phased-in in any given year. For example, an $800.00 increase in conjunction with an eight-year phase-in would result in a first-year tax increase of $100.00 which would qualify for a tax relief program. In the second year, the qualifying amount would be $200.00. A municipality is not required to give relief in respect of the full amount of an assessment-related tax increase, but may instead choose to give relief in respect of only part of such an increase.

The Act further provides for, where there is a deferral, the Treasurer to issue a tax certificate in respect of the property for which taxes have been deferred, and to show the amount of the deferred taxes and any accrued interest on the certificate. Interest may be charged on taxes deferred at a rate not exceeding the market rate as determined by the municipality.

As part of a deferral or cancellation of tax increases, or any other relief in respect of tax increases, the amount of taxes paid by the municipality to the school board shall be reduced accordingly. When any deferred taxes and interest are paid back to the municipality, the municipality must pay the school board its share thereof. The tax relief program can also be provided as part of future reassessments.

Overview:

This report, after consideration of the options provided for by Act, as well as numerous other options requested by the Assessment and Tax Policy Task Force, recommends a program providing for the deferment of assessment-related tax increases for eligible persons, with interest being charged on amounts deferred. In this way, the City will be effectively providing funds to the homeowner in the amount of the assessment-related increase, the amount of which will be registered against title to the property and recouped with interest when the property is sold or from the estate. This would result in no funding impact to the City.

Such a program achieves the goal of striking a balance between providing those seniors and disabled persons deemed to be in the most need of financial assistance while avoiding any burden on current taxpayers, and is within the available legislative framework. The tax deferment program is also supported by the Municipal Finance Officers Association of Ontario (MFOA), whose perspective is to help achieve consistency of application of the provisions of the Act across Ontario's municipalities.

The key difference between a tax deferral program and a tax cancellation program is that, under a deferral, the City will ultimately recoup the amounts deferred when the property is sold or from the estate, whereas with a cancellation, the amount cancelled is not recoverable and must be funded entirely from the operating budget. From a financial accounting perspective, deferred amounts would be accrued as a receivable. All else being the same, an eligible person will be equally well off since he or she would not be paying that portion of the tax in either case. It does, however, affect the estate. Under a deferral, the accumulated deferred amounts would be a debt obligation of the estate, while under a cancellation, there would be no such debt obligation.

Based on a review of other public sector programs, the most common definition of "low-income senior" was found to mean a person 65 years of age or older who is receiving the Guaranteed Income Supplement (GIS) under the Old Age Security Act (the GIS is described in greater detail starting on page 16). The advantage of this definition is that the determination of eligibility is administered by Human Resources Development Canada, thereby eliminating the need for the City to establish and administer its own income means test, and would be the least intrusive for seniors seeking financial assistance. Applicants need only demonstrate proof of GIS benefits to be eligible for tax relief. This definition is supported by the MFOA, which found these criteria defining low-income seniors as the most commonly used throughout Ontario. This report recommends the above criteria of "low-income senior" based on the foregoing reasons.

The MFOA also suggested a definition of "disabled" as "a person with substantial physical or mental impairment that is continuous or recurrent and expected to last one year or more, effects the person's ability to attend to his or her personal care and his or her function in the community and workplace, and that the impairment and its likely duration and the restriction in the person's activities of daily living have been verified by a physician". A low-income disabled person would be receiving disability benefits under the Ontario Disability Support Program (ODSP) or the Family Benefits Act (FBA) or the Guaranteed Annual Income System (GAINS). This report also recommends the foregoing criteria for "low-income disabled person".

Discussion:

The Act provides Council with flexibility in developing a mandatory tax relief program, provided that any such relief is in respect of assessment-related tax increases. A definition of "low-income", "senior" and "disabled", and the type of the program (i.e., deferral, cancellation, or other) are required to be adopted by Council.

Various eligibility criteria and various tax relief programs can be considered. Variables include the eligibility age and income, the type of program (i.e., deferral, cancellation, or other), and in the case of deferment, whether or not interest is to be charged and at what rate. Various combinations of eligibility criteria and programs, along with estimates of the financial impact of each combination are shown in the Appendices:

Appendix 1 - Analysis of assessment-related tax deferral and tax cancellation options

Appendix 2 - Analysis of general tax relief options

Appendix 3 - Analysis of uniform tax credit options

Appendix 1 describes options available to Council, pursuant to the Act. This includes tax deferral, tax cancellation, or a combination thereof, provided that such relief is in respect of assessment-related increases. The Act provides for the cost of such programs to be shared with school board in proportion to their share of tax revenue that would otherwise be levied (on a preliminary basis, the City's share amounts to approximately 63 percent of the taxes levied on the residential property class).

Appendix 2 describes those options that provide for tax relief whether or not an assessment increases. This includes tax deferral (such as the $600.00 annual tax deferral program previously available in the cities of Etobicoke and York), tax cancellation, or a combination thereof, irrespective assessment-related tax changes. Since the Act does not provide any authority to effect such programs, the City would need to seek legislative changes or the enactment of special legislation if any such program is recommended. It should be noted that in these cases, it is likely the City would have to bear the entire cost of the program unless a cost sharing provision respecting the school board is provided for in the legislative changes or special legislation.

Appendix 3 describes those options that provide for a uniform tax credit against property taxes for eligible low-income seniors, pursuant to the existing Municipal Elderly Assistance Act. This option would be similar to the program previously in place in the former City of Toronto, whereby eligible low-income seniors could apply for an annual $100.00 rebate against their property taxes. Council could choose another amount for the uniform tax credit. No additional legislation is required to effect such a program. It should be noted that the school board is not required to share in the cost of this program.

(A)Analysis of Potential Applicants (Low-Income Seniors):

This section provides an overview of population demographics in the City of Toronto respecting low-income seniors, based on age and income, as part of developing a tax relief program.

Table 1 provides an estimate of the number of senior owner-occupied households by income distribution in Toronto. Two age criteria defining seniors is shown: 65 years of age and over, and 60 years of age or older. Column 1 provides an estimate of the total number of owner-occupied senior households by income range. Column 2 provides an estimate of the number of these households projected to experience a tax increase. Column 3 provides an estimate of the total amount of the tax increase due to reassessment. Appendices 4 and 5 provide additional information respecting the 65 and 60-year old age groups, respectively, showing estimates of eligible households, participating households and amount of assessment-related tax increases, which has been tabulated by income range. The information was compiled by cross-referencing Revenue Canada's Income Tax Filer data with Statistics Canada demographic data at the ward level. This information was further referenced with assessment data, also at the ward level. Income information is not available, and would be confidential, at the individual property level.

Insert Table/Map No. 1

table 1 - 65 years of age or older

If "senior" is defined as 65 years of age or older, it is estimated that there may be in the range of 32,000 to 50,700 households (column 1) whose household income is less than $20,000.00 per year (the income figure represents a typical upper limit for household income in order to qualify for the GIS). Of these households, it was projected that 12,700 to 20,100 households may experience tax increases due to reassessment (column 2). The total amount of the tax increase due to reassessment (column 3) is estimated to be in the range of $6.5 million to $10.4 million, of which the City's portion would be $4.1 million to $6.6 million. The average senior-household assessment-related tax increase was estimated to be in the order of $570.00 per household.

If "senior" is defined as 60 years of age or older, it is estimated that there may be in the range of 37,800 to 59,900 households where the household income is less than $20,000.00, of which 15,000 to 23,800 households are projected to experience tax increases due to reassessment. The total amount of the tax increase due to reassessment was estimated to be in the range of $7.9 million to $12.4 million, of which the City's portion would be $5.0 million to $7.8 million. Since the GIS is payable to pensioners aged 65 and older, adopting an age criteria of 60 would necessitate that the City implement its own income means test if income is to be a criteria.

(B)Analysis of Potential Applicants (Low-Income Disabled Persons):

Information has been received from the Ministry of Community and Social Services respecting caseload statistics for the disabled, which indicates approximately 1,120 disabled persons in receipt of the Family Benefit Allowance (FBA) and owning their own home. Projections, as shown in Table2, suggest approximately 400 low-income disabled households may experience an assessment-related tax increases, with the total amount of the tax increase estimated to be in the order of $0.2 million, of which the City's portion would be $0.15 million. As with the seniors, the average assessment-related increase was estimated to be $570.00 per household.

Table 2 - Estimated Number of Low-Income Disabled Persons

Column 1

Column 2

Column 3

Estimated Income of

Low-Income

Disabled Persons

Estimated Total Owner-Occupied Disabled Households (from MCSS)

Estimated Total Owner-Occupied Disabled Households Projected to Experience Tax Increases

Estimated Total Amount of Tax

Increase**

($ Millions)

Less than $20,000

1,120

400

$0.2

** Average assessment-related tax increase estimated to be $570.00 per senior household; City portion would be 63% of Column 3

(C)Analysis of Options to Provide Relief from Assessment-Related Tax Increases:

Part I - Options Providing Relief from Assessment-Related Tax Increases

The options available to Council within the existing legislative framework include: (i) deferring all or any portion of the assessment-related increase for eligible seniors or disabled persons; (ii) cancelling all or any portion of the assessment-related increase for eligible seniors and disabled persons; or (iii) other relief from assessment-related increases, which may include a combination of cancellation and deferral.

(i)Deferral of Assessment-Related Increases (Options Labeled "A" in Appendix 1):

Options A.1 to A.10 in Appendix 1 provide estimates of the projected number of participants and the financial impact of a deferral program respecting assessment-related tax increases, using various age, income and interest rate criteria. A participation rate of 5.0 percent was used to derive estimates for low-income seniors, and a 50.0 percent participation rate was used to derive estimates for low-income disabled persons since this latter group tend, generally, to be in a greater need of financial assistance. The 5.0 percent participation for seniors would appear to be reasonable given that in the B.C.'s seniors' assistance program, which provides a subsidized interest rate without an income test, results in a 3.0 percent participation rate. The former cities of Etobicoke and York tax deferral program experienced similar participation rates, estimated to be in the range of 2.0 to 3.0 percent.

The deferral options analyzed in this section considered various combinations of the following conditions:

(i)age criteria of 65 years of age and older, and 60 years of age and older;

(ii)qualifying household income criteria of less than $20.0 thousand (approximate income to qualify for the GIS), $25.0 thousand, $30.0 thousand, $35.0 thousand, and no income test;

(iii)interest charged on deferred amounts at 8.0 percent, 6.0 percent, 4.0 percent, 2.0 percent and 0.0 percent (no interest charged); and

(iv)deferrals apply only to assessment-related tax increases.

If a deferral program is instituted, it would be anticipated that after an initial outflow of funds over the first several years, some sales of these properties would occur and the deferred taxes plus interest would be paid back to the City so that at some point, the outflows and inflows could match and the program could be self-sustaining if new deferrals approximated the funds being received from sold properties. While there is no actual experience for the City of Toronto, the experience with the Province of British Columbia's tax deferral program (discussed latter in the report) suggests an average term of six years in the program.

With tax deferrals, the amounts deferred may be funded through a variety of cash management techniques with minimal or no impact on the current budget. One technique would involve the use of working capital to fund deferred amounts, in a manner similar to the treatment of other tax receivables. Working capital arises naturally during the course of business during periods when current assets exceed current liabilities, providing a source of temporary funds. Alternatively, a reserve fund could be also established to finance the program with initial funding being borrowed or transferred from another appropriate reserve and paid back at a later date.

The Act further provides for interest to be charged on amounts deferred at a rate not exceeding the market rate as determined by the municipality. The Municipal Act permits only simple interest to be applied against tax arrears. The City's short-term earnings rate over the past several months has been in the range of 4.6 to 4.8 percent, while the rate of return on the longer-term reserve and reserve fund investments has been around 6.65 percent. To the extent that deferred amounts may be funding by a combination of working capital and/or reserves, then a blended rate of approximately 6.0 percent may be reflective of the opportunity cost associated with funding this program. Alternatively, one could use the prime rate as a measure of the cost of funds, and the 6.0 percent figure would represent prime less one-half percent. The City of Kingston uses prime less one-quarter percent as the interest charge for its deferral program. If interest is charged on the deferred amounts at the City's imputed rate of return (i.e., 6.0 percent), then there would be no funding impact to current taxpayers. If the interest rate charged on deferred amounts was less than the City's imputed rate, then the difference would be effectively an interest subsidy to the deferees, which would have a negative impact on investment earnings and thus the operating budget.

Based on projections, it is estimated that approximately 854 to 1,225 households of an eligible 13,078 to 20,494 households may participate in such a program where the age criterion is 65 years and the income criterion is receiving the GIS (Option A.1.a). Participation rates would be higher should the eligibility criteria be made less restrictive. Depending on whether or not interest is charged and at what rate, the funding impact may range from $0.0 to $115.0 thousand in the first year, for a 6.0 percent and 0.0 percent interest rate, respectively, escalating to $689.0 thousand per annum by the sixth year. At that time, the cumulative amount deferred could be as much as $11.5 million, depending on the chosen criteria.

The estimates in Appendix 1 are exclusive of the phase-in of assessment-related tax increases, if any. Any phase-in policy would reduce the first-year impact proportionately to the phase-in period, but in latter years, the impact would be the same. Chart 1 below shows the accumulated deferred taxes over a 15-year period under a no phase-in, a 3-year phase-in, and an 8-year phase-in scenario. This example is based on an age criterion of 65 years, an income criterion of receiving the GIS, and assumes that interest equivalent to the City's imputed rate of return is charged on deferred amounts.

From Appendix 1, it can be observed that deferral programs are of the least costly of options available to the City.

Insert Table/Map No. 1

chart 1

(ii)Tax Cancellation Options (Options Labeled "B" in Appendix 1):

Under the tax cancellation options, the amounts cancelled would need to be funded from current property tax revenues annually. Tax cancellation options have the greatest impact on current funding requirements.

It should be noted that the recently enacted Small Businesses and Charities Act, 1998 (Bill16), will have an affect on the current funding requirements of tax cancellation options. This Act introduces the option for Council to cap property tax increases in the commercial, industrial and/or multi-residential property classes at 2.5 percent per year for the years 1998, 1999 and 2000. The adoption of the capping option would limit the City's ability to raise general tax increases from the capped property classes. Should Council wish to cancel taxes, then the entire amount of taxes cancelled would have to borne by the uncapped property classes. If the capping option is not adopted, the cancellation would be a general tax levy increase incorporated in the annual budget and borne by all property classes in proportion to their respective tax ratio.

Options B.1 to B.2 in Appendix 1 provides an estimate of the projected number of participants and the financial impact of a cancellation program respecting assessment-related tax increases, using similar combinations of age and criteria as used for tax deferrals on page8. For estimation purposes, a 100 percent participation rate was assumed for these options.

Depending on the chosen criteria, the cancellation of assessment-related tax increases for eligible persons would have an estimated current funding impact to the City of $4.2 million to $38.3 million per annum. For example, if an age criteria of 65 years of age or older, and an income criteria of being in receipt of the GIS (approximately $20.0 thousand) is used (option B.1.a), then it is estimated that a total of $6.5 million to $10.4 million in assessment-related tax increases would be cancelled for approximately 13,078 to 20,494 eligible persons (City share $4.1 million to $6.5 million). These funds are not provided for in the 1998 Operating Budget, and would result in a 0.4 to 0.7 percent increase in the residential tax rate if the burden is maintained within that class (i.e., if capping is adopted for the commercial, industrial and multi-residential property classes).

The above estimates are exclusive of the phase-in of assessment-related tax increases, if any.

A tax cancellation program would be the one of the most expensive of the options available to the City.

(iii)Other Options Providing for Relief from Assessment-Related Increases (Options Labeled "C" in Appendix 1):

Other options can be considered that includes combinations of deferrals and cancellations, such as providing for the cancellation of assessment-related tax increases for eligible low-income seniors, where low-income is defined as receiving the GIS, and providing tax deferrals for eligible seniors whose income is above the GIS level. The options labeled "C" in Appendix 1 describe these options under various eligibility criteria, along with the financial impacts.

The financial impacts are essentially the cumulative effect of the impact of a cancellation and a deferral. The cancellation component would result in a direct current funding impact as previously described in (ii) above. Depending on whether or not interest is charged in the deferral component, there could be a funding impact as a result of lost interest earnings as previously described in (I) above.

Such a program may result in a funding impact to the City from $4.3 million to $7.9 million in the first year of the program, to $4.3 million to $8.9 million by the sixth year of the program. Appendix 1 indicates that combination programs of this nature would also be one of the more costly of options available to the City.

Part II - Analysis of Other Tax Relief Schemes (Legislative Changes or Special Legislation Required):

This section covers other tax relief schemes that would apply whether or not an individual's assessment increased. These options are labeled as options "D", "E" and "F" in Appendix 2. There is no existing legislative authority for the City to provide property tax relief other than that for providing relief from assessment-related tax increases. Such programs may include one where a tax deferral is provided for the entire property tax bill (similar to the British Columbia scheme), or one where a fixed amount of taxes is deferred (similar to the programs previously in place in the former cities of Etobicoke and York), or one where 50 percent of the tax bill is deferred (similar to the City of Kingston scheme), or some combination thereof. The variables considered include the same as those outlined earlier under the tax deferral program.

(i)$600.00 Tax Deferral Program (Options Labeled "D" in Appendix 2):

The former Cities of Etobicoke and York provided a $600.00 tax deferral programs for low- income seniors. The eligibility criteria was that, in order to qualify for the program, seniors must be 65 years of age or over, have owned and occupied a home in the City for the past 3 years, and must receive a monthly Guaranteed Income Supplement under the Old Age Security Act. The amount deferred was treated as a lien against the property, to be repaid without interest when the property changed title. As of 1997, there were 159 liens in Etobicoke, with a total amount receivable of $285,800.00, and 43 liens in registered in York, with the receivable being $25,800.00. These figures suggest a 2 to 3 percent participation rate of potentially eligible seniors.

Authority for the City to provide for such a tax deferral program requires special legislation. For example, the City of York applied for and was granted special legislation to enable it to establish the aforementioned tax deferral program for senior citizens (Bill Pr44, "An Act Respecting the City of York, 1995").

The options labeled "D" in Appendix 2 describe the $600.00 tax deferral program using various eligibility criteria along with the financial impacts. It is estimated that this program may result in a first year funding impact of up to $454.0 thousand (age 60 and no income test), which may be expected to escalate to up to $2.7 million per annum by the sixth year. The total amount of deferred taxes at this time may be in the order of $7.8 to $11.1 million (age 65 receiving GIS) to $28.6 to $45.4 million (age 60 and no income test). Chart 2 on the following page shows an example the accumulation of deferred amounts, as well as the affects of a three-year and an eight year phase-in, should a phase-policy be adopted for the residential property class. The example uses the criteria of 65 years, receiving the GIS, and that interest is charged on deferred amounts at the City's imputed rate of return (Option D.1.a).

As previously noted, special legislation would be required to authorize the City to provide for such a program since it goes beyond the scope of assessment-related increases. It should be noted that the school board would not be required to participate in the financing of such a deferral program.

Insert Table/Map No. 1

chart 2

(ii)Deferral of Total Tax Bill (Options Labeled "E" in Appendix 2):

This is a program similar to that offered by the Province of British Columbia, which provided a province-wide program allowing eligible residents to defer the payment of annual municipal or rural property taxes on their home. The age criterion is 60 years or over. The program is also available to homeowners of any age who are widowed spouses, or who receive a disability allowance or benefit under the Disability Benefits Program Act. Applicants are not income tested.

Deferees must be either a Canadian citizen or landed immigrant who have lived in British Columbia for at least one year before applying for deferment benefits. Deferees must be the registered owner of the property and must maintain at least 25 percent owner equity in the home. Deferees may defer all or a portion of their property taxes, after deducting their homeowner grant entitlement, if applicable. The deferred taxes are paid by the province to the taxing authority (municipality), on behalf of the Deferee, who is required to fully repay the deferred taxes to the province, with interest, either:

(i)before their home can be legally transferred to a new owner, other than their surviving spouse; or,

(ii)upon their death, with repayment through their estate.

Deferees are charged simple interest, at a rate not greater than 2 percent below the prime rate at which the province borrows money. The interest rate is set semiannually by the Minister of Finance and Corporate Relations. The rate through to September 20, 1997, was 2.75percent.

In 1997, the total deferment clientele was expected to increase to 11,000 households province wide. This represents a participation rate of about 3 percent of all eligible households in that province. As of 1997, the accumulated amount of deferred taxes and interest was estimated to be $84 million. The annual interest subsidy cost to the province is estimated at $1.7million, with a further $500,000 for program administration.

Option "E.4.e" in Appendix 2 would be comparable to the B.C. program. With an eligibility criteria of 60 years of age or older, no income test, and a 2.0 percent interest subsidy, the first-year funding impact to the City may be estimated to be in the order of $430.0 to $681.0 thousand, growing to $2.6 to $4.1 million by the sixth year. The total amount of taxes deferred may be estimated to be in the order of $21.5 million to $34.0 million in the first-year, growing to $128.9 to $204.3 million by the sixth year (the steady state level whereby it is projected that exits from the program may approximate new entries).

Should interest be charged at the City's imputed rate of return, then there would be no funding impact. Other variations on the deferral of the total tax bill are shown under the options labeled "E" in Appendix 2. These options would be more costly than deferrals with respect to funding due to the greater number of eligible households that would be expected to participate. It should be noted that the school board would not be required to participate in the financing of such a deferral program.

(iii)Deferral of 50 percent of Tax Bill (Options Labeled "F" in Appendix 2):

This program was suggested as an alternative to the program of deferring the total tax bill, which is similar to a program provided by the City of Kingston. The Kingston scheme, as enacted by special legislation, allows low-income senior owners of residential property to defer up to 50 percent of the municipal tax bill (i.e., local share only) to a maximum of $1000.00 per year. Eligibility criteria for the program requires applicants to be 65 years of age or older, and receive the GIS. Interest is charged on the deferred portion of taxes a rate equivalent to the City's short-term bank borrowing rate, which they quote as prime less one-quarter percent.

The options labeled "F" in Appendix 2 provide estimates of the financial impact of implementing such a system in the City of Toronto using various eligibility criteria. The impact of these options is approximately half that described under deferral of the total tax bill in (ii) above. It should be noted that the school board would not be required to participate in the financing of such a deferral program.

Part III - Analysis of Other Tax Relief Schemes:

This section describes two other tax relief schemes. The first is a scheme that provides for a $100.00 credit against taxes, similar to the program previously in place in the former City of Toronto. The second involves reverse mortgages, and this description is provided only for information.

(i)100.00 Tax Credit Program (Options Labeled "G" in Appendix 3):

The former City of Toronto was the only former local municipality with a program to provide a property tax credit refund in the amount of $100.00 against the City portion of realty taxes of eligible seniors. This program was initiated in 1974 through enactment of the Municipal Elderly Resident's Assistance Act, and subsequent City of Toronto by-law. In order to qualify under the former City of Toronto's program, seniors must be 65 years of age or over, have owned and occupied a home in the City for the past 5 years, and must receive a monthly Guaranteed Income Supplement under the Old Age Security Act. In 1997, there were 4,138 eligible applicants in the City, for which a total of $413,800 was refunded as a credit against the final tax bill.

The options labeled "F" in Appendix 3 describes this option using various eligibility criteria along with the financial impact. Tax credits must funded from current revenues. If the former City of Toronto program is extended to all eligible residents in Toronto (age 65 and receiving the GIS), it is estimated the number of eligible households may be in the range of 33,095 to 51,801, and such a program would require funding from the operating budget in the order of $3.3 million to $5.2 million. The impact of using other criteria is also shown in Appendix 3.

Through the Municipal Elderly Resident's Assistance Act, Council may by by-law provide such a tax credit program to eligible seniors. This Act is still in force. It should be noted that the school board does not share in the cost of this program. Although the Toronto by-law has not been repealed, Council at its meeting on March 4, 5, and 6, 1998, during consideration of Clause 4 of Report No. 3 of the Strategic Policies and Priorities Committee ("Seniors Property Tax Credit") cancelled the Toronto tax credit program (as well Etobicoke and York's tax deferral programs) pending the adoption of a new tax policy respecting property tax relief for low-income seniors and low-income disabled persons.

(ii)Reverse Mortgages:

Reverse mortgages are a relatively new concept in Canada, which is expected to grow in popularity in the next couple of decades with the aging population. Reverse mortgages are designed for seniors who have most of their equity in their home. A reverse mortgage unlocks that capital and advances a percentage of the house value to the homeowner, while allowing them to continue to own and live in the home. The advance is registered against the title of the property as a mortgage, and may be used to purchase a lifetime guaranteed income and/or as a lump sum cash payment. Revenue Canada deems the interest from the annuity as tax-free.

A reverse mortgage varies substantially from a conventional mortgage in that no monthly repayments are required and the homeowner is not borrowing money they don't already own. Reverse mortgages are simply a means of accessing the money that is locked up in the home. The principal and accrued interest is paid back when the property is sold or from the estate. Most of the major banks are currently offering reverse mortgages in one form or another. Most of the programs require that there be a certain level of equity in the home.

A tax deferral program is similar to a reverse mortgage. In either case, funds are advanced, the amount of which is registered against title of the property. In a tax deferral program, the amount advanced is the taxes payable on the property, while in a reverse mortgage, funds may be advanced as a lump sum or as an annuity, and the total amount that may be advanced would be some percentage of the homeowners equity, based certain actuarial calculations.

(D)Recommended Tax Deferral Program:

After consideration of all of these options, a program that provides for the deferral of assessment-related tax increases to eligible low-income seniors and low-income disabled is deemed to be the most appropriate for the following reasons.

With respect to deferrals versus cancellations, all else being the same, an eligible person will be equally well off since he or she would not be paying that portion of the tax in either case as long as they remain eligible for the program. However, a tax deferral has the advantage over cancellation in that the City will ultimately recoup the amounts deferred when the property is sold or from the estate. In this way, the tax deferral program achieves the goal of striking a balance between providing those seniors and disabled persons deemed to be in the most need of financial assistance while minimizing the burden on current taxpayers. Such a program is also within the available legislative framework.

GIS Eligibility:

With respect to income eligibility criteria, the use of the GIS has the advantage in that the determination of eligibility is administered by Human Resources Development Canada, thereby eliminating the need for the City to establish and administer its own income means test and would be least intrusive into the affairs of seniors seeking financial assistance. This also provides for administrative ease and efficiency, as applicants need only demonstrate proof of GIS benefits to be eligible for tax relief (or in the case of the disabled, proof of receipt of disability benefits under ODSP, or FBA or GAINS).

The GIS is payable by the Federal Government to seniors whose combined household income is less than a prescribed amount. The GIS is an income-tested, monthly benefit for Old Age Security pensioners with limited income apart from the Old Age Security Pension. It is administered by Human Resources Development Canada. To qualify for the GIS, a person must be receiving the Old Age Security pension, must be a resident in Canada, and their income must be at or below the qualifying level. If the person is married (legal or common-law), then the combined income must be at or below the qualifying level.

The GIS is payable to single, widowed or divorced pensioners earning up to a yearly income (excluding Old Age Security and GIS) of $11,616.00, beyond which the pensioner(s) is no longer eligible to receive the GIS. For married couples, where both are pensioners, the combined yearly income to qualify for the supplement must be below $15,168.00 (excluding Old Age Security, GIS, and Spouse's Allowance). For married pensioners whose spouse is not a pensioner and is not eligible for Spouse's Allowance, the combined yearly income must be below $28,128.00 (excluding Old Age Security, GIS, and Spouse's Allowance). The income cut-off is higher in this case because no Spouse's Allowance would be payable. For married couples where one is a pensioner and the other is between 60 and 64 years of age, the combined yearly income must be below $21,696.00 (excluding Old Age Security, GIS, and Spouse's Allowance). The income cut-off is lower in this case since a Spouse's Allowance to a maximum of $8,668.00 would be payable. For widowed persons who are eligible for Spouse's Allowance, the yearly income to qualify for the supplement must be below $15,912.00 (excluding Old Age Security and GIS). Table 3 illustrates the income stream for the above situations, assuming a combined yearly income apart from Old Age Security and supplement of $10,000.0 and $15,000.0 thousand.

Table 3

Old Age Security, Guaranteed Income Supplement and Spouse's Allowance

Example of Yearly Income Apart from OAS and Supplement of $10 thousand and $15 Thousand

Yearly Income Apart from OAS and Supplement Old Age Security GIS Spouse's Allowance Total Income
Single, widowed or divorces pensioners

10,000.00

4,885.80 814.32 n/a 15,700.12
Single, widowed or divorces pensioners 15,000.00 4,885.80 0.00 n/a 19,885.80
Married couples, both pensioners 10,000.00 4,885.80 1,286.04 6,171.84 22,343.68
Married couples, both pensioners 15,000.00 4,885.80 38.04 4,923.84 24,847.68
Married couples, not eligible for Spouse's Allowance 10,000.00 4,885.80 4,534.32 n/a 19,420.12
Married couples, not eligible for Spouse's Allowance 15,000.00 4,885.80 3,286.32 n/a 23,172.12
Married couples, spouse between 60 and 64 years of age 10,000.00 4,885.80 2,918.04 2,918.04 20,721.88
Married couples, spouse between 60 and 64 years of age 15,000.00 4,885.80 1,670.04 1,670.04 23,225.88
Widowed person, eligible for Spouse's Allowance 10,000.00 4,885.80 n/a 2,955.60 17,841.40
Widowed person, eligible for Spouse's Allowance 15,000.00 4,885.80 n/a 447.60 20,333.40

Source: Human Resources Development Canada Brochure, "Income Security Programs - OAS, GIS and Spouse's Allowance - Table of Rates in effect January-March 1998"

For the purposes of determination of eligibility for the GIS, Human Resources Development Canada determines the combined yearly income of the pensioner and spouse. Income is on a gross basis, and exclusive of payments that may be received as OAS, GIS and Spouse's allowance. Certain other income may also be included in the determination of combined yearly income. This includes Future Economic Loss awards and pensions payable by the Workplace Insurance Board (formerly WCB).

The use of an age criteria of 65 years or older is coupled with the income criteria in that, to be eligible for the GIS, a person must be 65 years of age or older. If an age criteria of less than 65 years is considered, then the GIS income test would not be applicable, and the City would be required to administer its own income means test. Furthermore, an age criteria of 65 years of age or older defining "senior" is the most common definition used to determine eligibility in a number of financial assistance or benefits programs, such as the Canada Pension Plan. This criteria for "low-income seniors" achieves the goal of assisting those people in the greatest need of financial assistance, while also providing for administrative ease and efficiency.

The criteria and administrative terms and conditions for the recommended program is as follows:

Eligibility Criteria - Low-Income Seniors:

To be eligible as a low-income senior, a person:

(i)must be 65 years of age or older, or in the case of a widowed person receiving the Spouse's Allowance, between the age of 60 and 64;

(ii)must have owned and occupied the residence for the past three years; and

(iii)must be receiving the Guaranteed Income Supplement (GIS) under the Old Age Security Act, and in the case of widowed person between the age of 60 and 64, receiving a Spouse's Allowance under the Old Age Security Act.

Eligibility Criteria - Low-Income Disabled Persons:

In order to be eligible as a low-income disabled person, a person:

(i)must be in receipt of benefits under the Ontario Disability Support Program (ODSP); or,

(ii)must be in receipt of disability amounts under the current Family Benefits Act (FBA); or,

(iii)must be in receipt of benefits under the Guaranteed Annual Income System (GAINS) for the Disabled, and be eligible to claim a disability amount as defined under the Income Tax Act (Canada).

ODSP is a new program which replaces the former Family Benefits Act. Although the ODSP Act has received royal assent, it has yet to be proclaimed in force. The advantage of this definition is that eligibility is determined by other agencies, thereby eliminating the need for the City to administer its own means test.

Administrative Details:

The MFOA survey also identified a number of administrative details and considerations in conjunction with the definition and eligibility criteria for a tax relief program. The MFOA suggests that the details and considerations outlined below be considered by municipal councils in the development of their tax relief programs for low-income seniors and low-income disabled persons. The administrative details and eligibility criteria are contained in a draft of the by-law on the tax deferrals program as shown in Appendix 6.

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Administrative Terms and Conditions

(Applicable to both low-income seniors and low-income disabled persons)

(a)to qualify for tax deferral, applicants must have been owners of real property within the City of Toronto for three consecutive years preceding the application;

(b)tax deferral is only allowed on one principal residence of the qualified individual or qualifying spouse. Appropriate proof of residency establishing continuous (i.e., not part-time) residency must be provided. Verification of documentation provided in conjunction with an application may be carried out independently at the discretion of the City;

(c)tax deferral applies to current taxes only (not tax arrears);

(d)tax deferral amounts are only advanced (or deferred) after payment in full is received for any current or past year amounts payable;

(e)application for tax deferral must be made annually to the City to establish eligibility or continued eligibility. Applications must be made by December 31 of each year on a form prescribed by by-law;

(f)for properties which are jointly held or co-owned by persons other than a spouse, both or all co-owners must qualify for benefits under the income means test in order to receive tax deferral (i.e. this would include married couples, even if one spouse is 60 to 64 years of age);

(g)tax deferral amounts provided under the by-law are not transferable to the estates of deceased owners;

(h)any tax deferral ceases to apply once the property is sold, or when the eligible applicant dies or ceases to be eligible under the criteria established by the by-law. Any deferred amounts plus applicable interest charges become a debt payable to the City, including part-year portions; and

(i)deferred amounts are subject to interest, and attract interest at a rate specified by by-law.

Financial Implications of Recommended Program:

With tax deferrals, the amounts deferred may be funded through working capital and/or borrowing from reserves. If interest were charged on deferred amounts at the City's imputed rate of return, then there would be no financial impact to current taxpayers. If no interest is charged, there would be a current funding impact arising from foregone interest revenue on working capital and/or reserve amounts advanced to fund the deferrals. Any impact would also be contingent on the phase-in policy, if any, which has yet to be considered and adopted by Council. Chart 1 on page 9 provides a projection of deferred amounts under various phase-in scenarios for assessment-related deferrals, and Chart 2 on page 13 provides the same information for a general tax deferral ($600.00 per annum).

The estimated impact of the recommended tax deferral program is shown in Table 4. An interest rate of 6 percent was used to represent the City's imputed rate of return. For estimation purposes, a 5 percent participation rate was also assumed for seniors (as deferral programs historically have resulted in low participation rates), while a 50 percent participation rate was assumed for low-income disabled persons since this latter group tends to include persons in greater need of assistance. Additional data is available under option "A.1.a" in Part 1 of Appendix 1.

Table 4 - Recommended Tax Deferral Program for Assessment-Related Increases

(Low-Income Seniors Aged 65 Years or Older on GIS and Low-Income Disabled Persons)

(6.0 Percent Interest Charge on Deferred Amounts)

(5 percent Participation Rate for Low-Income Seniors,

50 percent Participation Rate for Disabled Persons Receiving FBA)

Estimated Eligible Households (experiencing Assessment increases)

Estimated Participating Households

Estimated City Share of Deferred Taxes

$000's

Estimated Amounts to be funded from Working Capital and/or Reserves Impact to City

($000's)

First Year

Sixth Year

Low-Income Seniors (Age 65+, Receiving GIS)

12,678-20,094

634-1,005

(5 percent take-up)

$206-$327

$206-$327

$1,236-$1,962

Low-Income Disabled (Receiving FBA) 400 200

(50 percent take-up)

$72 $72 $432

Total

13,078-20,494

854-1,225

$278-$399

$278-$399

$1,669-$2,393

The recommended program will result in no direct funding impact to the City. Participation is estimated to be in the order of 854 to 1,225 households (low-income seniors and low-income disabled persons). In the first year, it is estimated that the projected deferred taxes would be in the range of $278.0 thousand to $399.0 thousand, which could easily be funded from working capital and/or from borrowing from reserves. Over the longer term, deferred taxes are projected to grow to and stabilize to a level of $1.7 million to $2.4 million by around the sixth year, at which time it is anticipated that inflows from the sale of properties would approximate new deferrals amounts. If a phase-in policy were adopted, then the amounts deferred would be reduced in proportion to the phase-in period amounts (see Chart 1 on page 9).

Subject to the Province enacting special legislation, it is also recommended that the City provide a program for a general tax deferral (600.00 per annum) to eligible low-income seniors and low-income disabled persons, also with interest being charged on deferred amounts. When and if such a program is effected, participation is projected to increase (due to the greater number of eligible applicants) to 2,159 to 3,094 households, as shown in Table 5, with additional information shown under option D.1.a in Appendix 2. The first year deferred amounts would be estimated to be in the range of 1.3million to $1.9 million, and should stabilize at $7.8 million to $11.1 million by around the sixth year (see Chart 2 on page 13). It should be noted that the school board is not required to participate in such a program, and hence the City would have to finance the entire program.

Table 5 - General Tax Deferral Program ($600 per year) - Subject to Special Legislation being Enacted

(Low-Income Seniors Aged 65 Years or Older on GIS and Low-Income Disabled Persons)

(5 percent Participation Rate for Low-Income Seniors,

50 percent Participation Rate for Disabled Persons Receiving FBA)



Estimated Eligible Households Estimated Participating Households Estimated City Share of Deferred Taxes

(not shared by school board)

$000's

Estimated Amounts to be funded from Working Capital and/or Reserves Impact to City

($000's)

First Year

Sixth Year
Low-Income Seniors (Age 65+, Receiving GIS)

31,975-50,681

1,599-2,534

(5 percent take-up)

$959-$1,520 $959-$1,520 $5,754-$9,120
Low-Income Disabled (Receiving FBA)

1,120

560

(50 percent take-up)

$336 $336 $2,016

Total

33,095-51,801 2,159-3,094 $1,295-$1,856 $1,295-$1,856 $7,772-$11,139

(E)Information and Communication Plan:

Council approved a reassessment and tax policy information communications plan at its meeting on March 3 and 4, 1998. Phase III of the plan provides for information to be communicated in newspaper advertisements outlining the details of the proposed tax implementation plan, including details respecting property tax relief for low-income seniors and low-income disabled persons. Although this phase was originally scheduled to be initiated in early May, it has been rescheduled (tentatively) for July to accommodate the delay in the return of the 1998 roll. Subsequent to this, Phase IV of the plan will advise taxpayers of the details of the property tax plan approved by Council. This information will be communicated primarily through a brochure that will accompany the final tax bill. The brochure will also advise residential taxpayers of its tax relief plan for low-income seniors and low-income persons with disabilities and stipulate eligibility criteria and other program details.

Conclusion:

The Fair Municipal Finance Act mandates that Council pass a by-law providing for deferrals or cancellation of, or other relief in respect of all or part of assessment-related tax increases on property in the residential property class for low-income seniors and low-income disabled persons. The Act provides Council with flexibility in defining the program and eligibility criteria. Many options have been considered as requested by the Assessment and Tax Policy Task Force that examines the various program options (i.e., deferral, cancellation and other forms of relief), including various combinations of age and income criteria and interest rates.

After consideration of the numerous options, a program providing for the deferral of assessment-related tax increases for eligible persons, with interest being charged on amounts deferred, is recommended. Eligibility for low-income seniors is defined as being 65 years of age or older and receiving the GIS. Eligibility for low-income disabled persons is defined as receiving disability benefits under ODSP, FBA or GAINS.

An eligible person would be equally well off with a deferral program relative to a cancellation program because, all else being the same, he or she would not be paying that portion of the tax in either case as long as they remain eligible for the program. However, a tax deferral has the advantage over cancellation in that the City will ultimately recoup the amounts deferred when the property is sold or from the estate. With respect to income eligibility criteria, the use of the GIS has the advantage in that the determination of eligibility is administered by Human Resources Development Canada, thereby eliminating the need for the City to establish and administer its own income means test, and would be least intrusive for seniors seeking financial assistance. This provides for administrative ease and efficiency, as applicants need only demonstrate proof of GIS benefits to be eligible for tax relief (or in the case of the disabled, proof of receipt of benefits under ODSP, or FBA or GAINS). The use of an age criteria of 65 years or is coupled with the income criteria in that, to be eligible for the GIS, a person must be 65 years of age or older. If an age criteria of less than 65 is considered, than the GIS would not be applicable, and the City would then be forced to administer its own income means test.

In this way, the tax deferral program achieves the goal of striking a balance between providing those seniors and disabled persons deemed to be in the most need of financial assistance while avoiding any burden on current taxpayers, provides for administrative ease and efficiency, and is also within the available legislative framework.

The taxes deferred may be funded through working capital and/or borrowing from reserves. With interest being charged on deferred amounts at a rate equivalent to the imputed rate of return, then there would be no funding impact to current taxpayers. If no interest is charged, there would be a current funding impact arising from foregone interest revenue. Any impact would also be contingent on the phase-in policy, if any, which has yet to be considered and adopted by Council.

There is a funding impact associated with other tax relief schemes. The amount of the impact is contingent on the nature of the program, the eligibility criteria, actual participation rates, and whether or not any phase-in policy is adopted for the residential property class. The annual impact may range from several thousand dollars for a deferment program in which an interest subsidy is provided, to tens of millions of dollars for cancellation programs, to be funded from the operating budget.

Contact Name:

Adir Gupta, 392-8071

Ed Zamparo, 392-8641.

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Authority:Strategic and Policies Committee

Report No. *(*), June , 1998

Intended for first presentation to Council: June , 1998

Adopted by Council:

CITY OF TORONTO

Bill No.

BY-LAW No.

To establish a property tax assistance program for

eligible elderly and disabled residents who are

Owners of real property in the City of Toronto.

WHEREAS Section 373 of the Municipal Act, R.S.O. 1990, c. M.45, as amended by the Fair Municipal Finance Act, 1997, the Fair Municipal Finance Act, 1997 (No. 2) and the Small Business and Charities Protection Act, 1998 provides that the Council of a municipality shall, for the purposes of relieving financial hardship, pass a by-law providing for deferrals or cancellations of, or other relief in respect of, all or part of assessment-related tax increases on property in the residential/farm property class for Owners who are, or whose spouses are either low-income seniors as defined in the by-law or low-income persons with disabilities as defined in the by-law.

Now, therefore, the Council of the City of Toronto HERBY ENACTS as follows:

1.In this by-law:

(a)"Assessment-related tax increase" means tax increases beginning in 1998, as defined under section 373 of the Municipal Act, as amended by section 55 of the Fair Municipal Finance Act, 1997, section 43 of the Fair Municipal Finance Act, 1997 (No. 2), and section 23 of the Small Business and Charities Protection Act, 1998, or tax increases beginning in a subsequent year and calculated in a similar fashion as 1998 assessment-related tax increases as further defined in section 373;

(b)"Eligible person" means Low-income person with disabilities or a Low-income senior or the spouse of a Low-income person with disabilities or a Low-income senior:

(c)"Low-income senior" means a person who is 65 years of age or older and in receipt of benefits under the Guaranteed Income Supplement (GIS), or in the case of a widowed spouse, being between the age of 60 and 64 and receiving the Spouse's Allowance, as provided for under Part II of the Old Age Security Act (Canada);

(d)"Low-income person with disabilities" means a person who is disabled or who has a disability and in receipt of income support under the Ontario Disability Support Program Act (ODSP), a benefit under the Family Benefits Act (FBA), or an increment under the Guaranteed Annual Income System (GAINS) as established under the Ontario Guaranteed Annual Income Act;

(e)"Owner" means a person assessed as the owner of residential real property, and includes an owner within the meaning of the Condominium Act;

2.Tax relief granted pursuant to this by-law shall be in the form of a deferral of the annual assessment-related tax increase, provided that the Owner is an Eligible person and:

(1)occupies the property, in respect of which the application for property tax assistance is made, as his or her personal residence;

(2)has been assessed as the Owner for a period of not less than three years immediately preceding the date of application for relief;

(3)where title to the property in respect of which the application for property tax assistance is made is held jointly, both or all Owners are Eligible persons; and

(4)payment for all taxes payable for the current year and all previous years has been made and received in full.

3.Tax relief granted pursuant to this by-law shall attract an interest charge on deferred amounts at a rate as may be provided from time to time by by-law passed by Council.

4.Annual deferred amounts, plus accrued interest thereon shall be deferred until such time as an Eligible person no longer possess title to the property at which time the total deferred amounts plus accumulated interest thereon become a debt immediately due and payable to the City of Toronto.

5.If at any time an Eligible person for which tax relief has been granted pursuant to this by-law ceases to be an Eligible person, all tax relief ceases and all such amounts plus accumulated interest thereon become a debt immediately due and payable to the City of Toronto.

6.The tax relief granted pursuant to this by-law shall constitute a lien against the property which shall be registered on title and at the expense of the Owner.

7.An amount received in part payment of deferred taxes and interest will be credited towards the interest before being credited toward the taxes.

8.No tax relief pursuant to this by-law shall be allowed in respect of more residential real property than one (1) single family dwelling unit in any year.

9.Commencing January 1, 1998, Owners who are Eligible persons may apply to the City of Toronto for tax relief with respect to their eligible property, on a form prescribed by the City of Toronto for this purpose.

10.All applications for tax relief must be in writing on a form prescribed by the City of Toronto for this purpose, and must be submitted to the City of Toronto on or before (provide due date for applications for 1998) for deferrals of taxes levied in 1998, and on or before the last day of the year preceding the year for which tax relief is sought for deferrals of taxes levied in all subsequent years. Applications must include documentation in support thereof to establish that the applicant is an Eligible person, and that the property with respect to which the application is made is eligible for such tax relief under the terms of this by-law.

11.This by-law shall be deemed to have come into force on January 1, 1998.

ENACTED AND PASSED this day of , A.D. 1998.

MayorCity Clerk

The Strategic Policies and Priorities Committee also submits the following transmittal letter (July 13, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998 submits to the Strategic Policies and Priorities Committee, and Council, without recommendation, the transmittal letter (July 12, 1998) from the Assessment and Tax Policy Task Force.

Background:

The Budget Committee on July 13, 1998 had before it the following:

(a)transmittal letter (July 12, 1998) from the Assessment and Tax Policy Task Force forwarding their recommendations for a tax deferral program for low-income seniors and low-income disabled persons; and

(b)report (July 13, 1998) from the Chief Financial Officer and Treasurer regarding the funding implication of the property tax relief program for low-income seniors and low-income disabled persons as recommended by the Assessment and Tax Policy Tax Force at their meeting held on July 11, 1998.

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(Report dated July 13, 1998 addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To report on the funding implication of the property tax relief program for low-income seniors and low-income disabled persons recommended by the Assessment and Tax Policy Tax Force at their meeting held on July 11, 1998.

Funding Impact:

The recommended tax relief program, to provide for property tax deferrals for assessment-related increases, in addition to a general $600.00 property tax deferral program whether or not an assessment increases, with no interest being charged on deferred amounts, will result in a first-year funding impact in the order of $95.0 to $135.0 thousand, to be funded from the 1998 Operating Budget. The annual impact by the sixth year of the program is estimated to be in the order of $658.0 to $944.0 thousand.

Background/Comments:

On July 11, 1998, the Assessment and Tax Policy Task Force considered the report "Property Tax Relief for Low-Income Seniors and Disabled Persons" (June 30, 1998), from the Chief Financial Officer and Treasurer.

The report recommended a property tax deferral program for assessment-related increases as well as a general $600.00 property tax deferral program, in which interest would be charged on deferred amounts at the City's required rate of return of 6.0 percent (prime less one-half percent). This would result in no direct funding impact to the City.

The Task Force has recommended no interest be charged on deferred amounts. This would result in a funding impact to the City arising from foregone interest earnings and/or from short-term borrowing costs.

The first-year funding impact is estimated to be in the range of $95.0 to $135.0 thousand, as shown in column 3 of Table 1. The sixth-year annual impact, a point in time where it is believed the program may become self-financing, is estimated to be in the order of $658.0 to $944.0 thousand. The funding impact shown in Table 1 is calculated assuming a 6 percent imputed required rate of return for City funds, with annual compounding on the interest foregone, as recommended by the Task Force. It is noted that special legislation would have to be obtained from the Province in order to provide the $600.00 general deferral program.

Table 1

Funding Impact of Tax Relief Program for Low-Income Seniors Aged 65 Years or Older on GIS and Low-Income Disabled Person receiving ODSP

(Various Interest Charge on Deferred Amounts - Annual Compounding)

(Assuming 6 Percent Imputed Required Rate of Return)

(5 Percent Participation Rate for Eligible Seniors, 50 Percent Participation for Eligible Disabled)

Interest Charge on Deferred Amounts

0%

4% 6%

Funding Impact $000's

Program

Estimated No. of Participating Households

Year 1 Year 6 Year 1 Year 6 Year 1 Year 6
Mandatory Assessment-Related Deferral Program

854-1,225

17-24 116-167 6-8 50-71 0 16-23
General $600.0 Deferral Program (incl. 854-1,225 participants with assessment-related increases)*

2,125-3,094*

78-111 542-777 26-37 231-331 0 76-109
TOTAL**

2,125-3,094 *

95-135 658-944 32-45 281-402 0 92-132

* Estimated No. of participating households for general tax deferral program includes those experiencing assessment-related increases

** Funding impact is cumulative total of both the assessment-related deferral and the general deferral, as an eligible person would be entitled to apply for both components

Conclusion:

It is anticipated that the recommended assessment-related deferral program and the general $600.00 deferral program will result in 2,125 to 3,094 participating households. The funding impact as a result of no interest being charged on deferred amounts is estimated to be $95.0 to $135.0 thousand for the first-year, to be funding from the 1998 Operating Budget.

(City Council at its Special Meeting on July 21 and 23, 1998, had before it, during consideration of the foregoing Clause, the following Briefing Note (July 21, 1998) prepared by the Finance Department and submitted by Councillor John Adams, Chair, Assessment and Tax Policy Task Force:

Issue/Background:

On July 11, 1998, the Assessment and Tax Policy Task Force considered the report "Property Tax Relief for Low-Income Seniors and Disabled Persons" (June 30, 1998), from the Chief Financial Officer and Treasurer.

The report recommended a property tax deferral program for assessment-related increases as well as a general $600.00 property tax deferral program, in which interest would be charged on deferred amounts at the City's required rate of return of 6.0 percent (prime less one-half percent). This would result in no direct funding impact to the City.

The Task Force has recommended no interest be charged on deferred amounts. This would result in a funding impact to the City arising from foregone interest earnings and/or from short-term borrowing costs.

A subsequent inquiry was made requesting information on a variation to this program. The scheme would involve a graduated tax deferral program for assessment-related increases in which the amount eligible for deferral would be dependent upon household income.

This Briefing Note is to report on the funding implication of a graduated property tax deferral program for seniors and disabled persons.

Key Points:

A graduated property tax deferral program for seniors, as shown in Page 2, in which the amount eligible for deferral is graduated with respect to income, would result in an additional first-year funding impact in the order of $5.4 thousand to $8.6 thousand, over and above the first-year funding impact of the previously recommended program of $94.4 thousand to $135.3 thousand. The annual additional impact by the sixth year of the graduated component of $38.1 thousand to $60.4, in addition to the funding impact of $658.5 thousand to $943.9 thousand. The funding impact assumes that no interest is charged to the participants.

Questions & Answers:

For assessment-related increases, the amount eligible for deferral would be dependent on income as follows:

Combined Household Income

Amount of Assessment-Related Increase Eligible for Deferral (Percentage)

GIS (approx. $20k or less)

100%

Between $20k and $25k

75%

Between $25k and $30k

50%

Between $30k and $35k

25%

More than $35k

Not Eligible

The scheme would also provide for a general property tax deferral of $600.00 for low-income seniors (i.e., those receiving the GIS), similar to the programs previously in place in the former cities of Etobicoke and York, as well as provide for the deferral of assessment-related increases in addition to a $600.00 deferral for low-income disabled persons (i.e., those receiving the ODSP).

In all cases, no interest would be charged on deferred amounts. The program would be expected to mature at around the sixth year (as is the experience in the Province of British Columbia property tax deferral scheme), after which it is anticipated it would become self-financing.

The first-year funding impact of such a scheme is estimated to be in the range of $100.0 to $144.0 thousand, as a result of foregone interest on $1.7 million to $2.4 million in deferred property taxes. The sixth-year annual impact is estimated to be in the order of $697.0 thousand to $1.0 million, with the deferred amounts accumulating to $10.0 million to $14.4 million. The funding impact is shown in Table 1 and is calculated assuming a 6 percent imputed required rate of return for City funds, with annual compounding on the interest foregone. It is noted that special legislation would have to be obtained from the Province in order to provide the $600.00 general deferral program.

It is noted that such a program would require the City to establish and administer its own income means test. It is estimated that administering an income means test would necessitate additional resources of approximately 4.2 to 6.0 FTE's, with an associated annual funding impact in the range of $255.0 thousand to $365.0 thousand.

Table 1

Funding Impact of Graduated Tax Relief Program for Seniors Aged 65 Years or Older and

Low-Income Disabled Person receiving ODSP

(No Interest Charge on Deferred Amounts - Annual Compounding)

(Assuming 6 Percent Imputed Required Rate of Return)

(5 Percent Participation Rate for Eligible Seniors, 50 Percent Participation for Eligible Disabled)

Combined Household Income

Amount Eligible for Deferral

Estimated Number of Participating Households City Share of Estimated Annual Taxes Deferred ($000's) Estimated Funding Impact to City ($000's)

First Year

Sixth Year
Previously Recommended Deferral Program:
Respecting Assessment-Related Increases
GIS (less than $20k)

100%

654-1,025 206.3-327.0 12.4-19.6 86.3-136.9
ODSP (disabled)

100%

200 72.0 4.3 30.1
Sub-Total

854-1225

278.3-399.0 16.7-23.9 116.4-167.0
Respecting General $600.00 Tax Relief
GIS (less than $20k)

100%

1,565-2,534* 959.3-1,520.4 57.6-91.2 401.5-636.3
ODSP (disabled)

100%

560* 336.0 20.2 140.6
Sub-Total

2,125-3,094*

1,295.3-1,856.4 77.7-111.4 542.1-776.9
Total Previously Recommended**

2,125-3,094*

1,573.6-2,255.4 94.4-135.3 658.5-943.9
Additional Graduated Deferral Program (Respecting Assessment-Related Increases Only)
$20k -$25k

75%

196-311 47.6-75.5 2.8-4.5 19.9-31.6
$25k - $30k

50%

166-263 16.0-25.3 1.6-2.6 11.5-18.2
$30k - $35k

25%

193-305 1.0-1.5 6.7-10.6
Total - Additional Graduated Deferrals

555-879

91.0-144.1 5.4-8.6 38.1-60.4
Grand Total

2,680-3,973

1,664.6-2,399.4 99.0-144.0 696.9-1,004.2

* Estimated No. of participating households for general tax deferral program includes those experiencing assessment-related increases

** Funding impact is cumulative total of both the assessment-related deferral and the general deferral, as an eligible person would be entitled to apply for both components

Conclusion:

It is anticipated that a graduated property tax deferral program for seniors in which the amount eligible for deferral is graduated with respect to income would result in a first-year funding impact in the order of $99.0 thousand to $144.0 thousand. The annual impact by the sixth year of such a program is estimated to be in the order of $696.9 thousand to $1.004 million. The funding impact assumes that no interest is charged to the participants. It should be noted that such a program would require the City to establish and administer its own income means test, which necessitate additional resources of approximately 4.2 to 6.0 FTE's, with an associated annual funding impact in the range of $255.0 thousand to $365.0 thousand.

Prepared By:Adir Gupta, 392-8071.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (July20, 1998) from Dr. John Bossons, Professor of Economics, University of Toronto, suggesting that the recommendations of the Assessment and Tax Policy Task Force be amended to allow any homeowner aged 65 or older to defer assessment-related tax increases.)

4

Commercial and Industrial Property

- Tax Policy Options

(City Council at its Special Meeting on July 21 and 23, 1998, amended this Clause by adding thereto the following:

"It is further recommended that Council request the Province of Ontario to:

(1)reassess all commercial and industrial properties solely on the basis of 'value in current use'; and

(2)provide, to City Council, the results of the assessment using 1998 values, in order that the issues of different classes and other policy issues may be evaluated well prior to the return of an assessment based on 1999 values.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 12, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on July, 6, 7, 11, and 13, 1998, recommended to the Strategic Policies and Priorities Committee and City Council that:

(1)because of the concerns in the valuation of commercial and industrial properties and for the need to provide protection to business tenants and to charities and similar organizations, and in order to limit the tax changes created by current value assessment, all commercial and industrial assessment-related property tax increases be capped at 2.5 percent of existing 1997 taxes (both realty and business occupancy taxes) per year for three years (1998-2000), and that these caps be funded by withholding a proportionate amount of tax decreases from properties with tax decreases;

(2)the other tax policy measures available for the commercial and industrial property classes, including graduated tax rates, separate classes and tax rebates, not be implemented at this time;

(3)prior to the full implementation of three-year averaging in 2006, the Province be requested to use a longer period of time (e.g., ten years) to average assessed values, especially for commercial properties; and

(4)a work plan be developed to formulate comprehensive tax policies in advance of the return of 1999 current value assessment, including the establishment of a Business Reference Group to assist in the process.

The Task Force reports having requested the Chief Financial Officer and Treasurer to report directly to City Council on July 21, 1998, on the following:

(1)any decisions of other major municipalities in Ontario on phase-ins, capping, etc.;

(2)background information on the average tax burden and average income of tenants versus homeowners; and

(3)an amendment to Table 7, attached to the report (June 26, 1998) from the Chief Financial Officer and Treasurer, to analyse the following proposal of Councillor Walker:

That City Council:

(i)create a separate tax class for office buildings;

(ii)create a separate class for shopping centres;

(iii)adopt graduated tax rates for the residual commercial class being:

(a)4.12 percent for the first $400,000.00 of a property's assessed value

(b)7.75 percent for the remainder of the property's assessed value;

(iv)provide tax rebates for properties receiving tax increases over 150 percent, to be financed by a 3.3 percent mill rate increase for all commercial properties; and

(v)adopt an eight year phase-in of all commercial tax changes.

Background:

The Assessment and Tax Policy Task Force had before it a report (June 26, 1998) from the Chief Financial Officer and Treasurer outlining the various tax reform options available with respect to commercial and industrial property.

The Task Force also had before it the following communications respecting the Current Value Assessment and the commercial and industrial property class:

(a)(July 2, 1998) from Ms. Mary Rose Ward, President, Mary-Rose Fashions;

(b)(July 7, 1998) from Mr. Peter Menzel, Toronto Automobile Dealers' Association (T.A.D.A.);

(c)(July 7, 1998) from Ms. Angela Robertson, Community Social Planning Council;

(d)(July 7, 1998) from Mr. John Campbell, President, Brookfield Management Services Ltd., Toronto Office Tower Coalition;

(e)(July 6, 1998) from Mr. James H. Oestreicher, Assistant Professor, University of Toronto;

(f)(July 7, 1998) from Mr. John Barnoski, Ontario Specialty Tenants' Coalition;

(g)(July 8, 1998) from Ms. Lea Pyykkonnen, Executive Director, Toronto Finnish-Canadian Seniors Centre;

(h)(July 8, 1998) from Mr. Bruce McKelvey, President & Chief Executive Officer, CDI Education Corporation; and

(i)Mr. Terry Mundell, President, Ontario Restaurant Association.

The Task Force held public hearings on July 7, 1998, to hear deputations from citizens on the reports from the Chief Financial Officer and Treasurer respecting Commercial and Industrial Property: Tax Policy Options, Property Tax Rebates for Charitable and Similar Organizations, and Tax Shifts -- Effect of Changes to Transition Ratios.

The following persons addressed the Task Force on July 7, 1998:

-Mr. John Doherty, obo Planned Parenthood Toronto;

-Mr. George Springle

-Mr. David G. Fleet, Poole Milligan, Barristers & Solicitors, obo Toronto Office Tower Coalition

-Mr. David McAlpine

-Mr. Wayne Amundson, obo Canadian Society of Association Executives

-Mr. Terry Mundell, President, Ontario Restaurant Association

-Ms. Maggie Pettet

-Ms. Angela Robertson, obo Community Social Planning Council

-Mr. Walker Kwok, Co-Chair, Toronto Fair Tax Chinatown Committee & Toronto Chinatown Community Development Association

-Mr. Dan Clement, obo United Way of Greater Toronto

-Ms. Midge Day, York Mills Heights Ratepayers' Association

-Mr. Peter Menzel, Toronto Automobile Dealers Association

-Mr. Richard D'Iorio, obo Toronto Arts Tax Alliance

-Ms. Asha Crogan, obo Professional Art Dealers Association of Canada

-Mr. John Barnoski, obo Ontario Specialty Tenants Coalition

-Mr. Kelly McCray, obo Toronto Arts Tax Alliance

-Mr. Loukas Stathokostas

(Copies of the communications referred to in the transmittal letter of the Assessment and Tax Policy Task Force have previously been distributed to all Members of Council with the agenda of the Assessment and Tax Policy Task Force and copies thereof are on file in the office of the City Clerk.)

--------

(Report dated June 26, 1998, addressed to the

Assessment and Tax Policy Task Force

from the Chief Financial Officer and Treasurer)

Purpose:

To outline the various tax reform options available with respect to commercial and industrial property.

Financial Implication and Impact Statement:

The recommended capping of business properties will protect businesses from significant CVA-related tax increases. However, if Council adopts the cap, budgetary tax increases, if any, in 1999 and 2000 would have to be funded from uncapped properties. For every one-percent increase in the City's levy during the next two years, this could result in a 2.8 percent increase in the City's municipal portion of the residential/farm tax rate or a 1.8 percent increase in the total residential/farm tax rate.

Recommendations:

It is recommended that:

(1)because of the concerns in the valuation of commercial and industrial properties and for the need to provide protection to business tenants and to charities and similar organizations, and in order to limit the tax changes created by current value assessment, all commercial and industrial assessment-related property tax increases be capped at 2.5 percent of existing 1997 taxes (both realty and business occupancy taxes) per year for three years (1998-2000), and that these caps be funded by withholding a proportionate amount of tax decreases from properties with tax decreases;

(2)the Province be requested to rescind any provisions in Bill 16 which prevent a municipal council from funding a budgetary tax increase from all property classes, should the capping provisions be adopted;

(3)the other tax policy measures available for the commercial and industrial property classes, including graduated tax rates, separate classes and tax rebates, not be implemented at this time;

(4)prior to the full implementation of three-year averaging in 2006, the Province be requested to use a longer period of time (e.g., ten years) to average assessed values, especially for commercial properties; and

(5)a work plan be developed to formulate comprehensive tax policies in advance of the return of 1999 current value assessments, including the establishment of a Business Reference Group to assist in the process.

Reference/Background:

Bill 106 and Bill 149, the Fair Municipal Finance Act (Nos. 1 and 2), provided Council with some flexibility in setting tax policy for commercial property (e.g., graduated tax rates and a maximum eight-year phase-in period). Bill 16 - "Small Business and Charities Protection Act, 1998" includes a municipal option to limit the tax increases resulting from tax reform to no more than 2.5 percent per year for the next three years. These caps can be applied to commercial, industrial and multi-residential properties and would be funded by limiting the amount of tax decreases resulting from Current Value Assessment (CVA). The legislation also provides municipalities the option of requesting the following new property classes: office buildings, shopping centres, parking lots and vacant land and large industrial properties. The graduated tax rate option is also now extended to the industrial class. Furthermore, tax rebates can provide additional protection to businesses.

The recent 1998 Ontario budget will provide funding to those communities, like Toronto, with business education taxes above the provincial average in order to reduce education tax rates for commercial and industrial properties. This equalization plan will be phased-in over the 1998 - 2005 period. When complete, the plan will reduce business education taxes in Toronto by an estimated $400 million. Legislation will be introduced to implement this plan.

Comments:

Introduction:

This report deals only with an implementation plan for CVA for the commercial and industrial property classes, within the context of the existing provincial legislation. Other tax policy issues dealing with narrowing the gap between the municipal tax rates for industrial and commercial property are addressed in a separate report. This report summarizes the analysis and findings regarding the tax policy options for commercial and industrial properties, including graduated tax rates, separate classes, tax rebates, phase-ins and capping provisions pertaining to commercial and industrial properties.

The summary financial information contained in the Appendix does not reflect the impact of the plan to reduce business education tax rates announced in the 1998 Ontario budget. Further provincial details affecting the calculation of reduced education tax rates are pending. Once completed, the education tax rate reduction plan in Toronto will have reduced the preliminary estimated total commercial and industrial tax rates as follows:

Change in Tax Rates Resulting from Provincial Education Tax Rate Reduction Plan

Total Tax Rates

Education Tax Rates
1998

Estimated

2005

Revised

% Change 1998

Estimated

2005

Revised

% Change
Commercial 7.75 6.66 (14.1) 4.37 3.28 (25.0)
Industrial 11.00 7.53 (31.5) 6.28 2.81 (55.2)

These are preliminary estimates based on the final assessment roll and will be revised as part of the final tax calculations.

Current Value Assessment - 1998:

The preliminary work done by City staff (in February and early March) was based on a single tax rate for all commercial property. Based on the final assessment roll received on June 15, 25 percent of commercial assessment portions (i.e. properties) experience tax decreases and 75 percent face increases. The average decrease amounts to $56,192.00 or 31.7 percent and the average increase is $18,372.00 or 251.6 percent. The median or mid-point of decreases is $7,022.00 or 28.9 percent and the median increase is $5,979.00 or 120.9 percent. The analysis clearly shows that a significant number of businesses in Toronto would face substantial tax increases. For example, almost half of the approximately 33,800 commercial properties face tax increases over 100 percent and almost 4,600 commercial properties face tax increases over 300 percent. The impact of CVA with one tax rate on commercial property is shown in the Table 1 in the Appendix.

The June 1996 values for commercial property were estimated by the Ministry of Finance using the income and sales comparison approaches. Office buildings and shopping malls were generally assessed using the income method. However, the assessed values for some smaller, older office buildings were determined using the sales comparison (or market) approach. Most strip retail properties were also valued using the sales comparison approach. The CVA findings showed that the office building sector in Toronto, which currently pays half the amount of total commercial taxes, would receive a total reduction of $418 million. On the other hand, most strip retail type properties would experience increases totaling $175 million.

Within the commercial class different types of commercial property have different effective tax rates, which are expressed as 1997 taxes as a percentage of 1996 values. Groups within the commercial property class are at diverse starting positions - some as low as 1.25 percent (e.g., vacant commercial land) and others as high as 12.06 percent (e.g., office buildings). As a result, property types with current effective tax rates below 7.75 percent experience increases. Property types with current effective tax rates above 7.75 percent (e.g. hotels, motels/taverns and department and discount stores, etc.) on average, see tax decreases.

Furthermore, the existing effective tax rates of properties within property types vary. For example, some strip retail properties are taxed at 1.0 percent, while others are taxed at 5.0 percent, compared to the average of 2.83 percent. This additional level of discrepancy within types of property further exacerbates the problems associated with reform.

A number of tax policy options provided in both the Fair Municipal Finance Act (Nos. 1 and 2) and Bill 16 are available to make the CVA impacts on commercial and industrial classes manageable. It would appear that municipalities could implement change using either one of two approaches. A municipality could implement the assessment-related tax increases for commercial and industrial properties using a combination of tax policy tools - graduated tax rates, separate classes and tax rebates. Under one option a municipality could phase-in the impacts of the plan over a period of up to eight years. Alternatively, under a second option a municipality could cap the assessment-related tax increases with or without the tax policy tools. As discussed later in the report, capping without any other tax policy options is recommended.

Tax Policy Options - Commercial Property:

This section provides a summary of the tax policy options available in the legislation to help municipalities implement tax changes.

1.Graduated Tax Rates:

Graduated tax rates are provided to mitigate the impacts of both reassessment and the elimination of the business occupancy tax on lower-value commercial properties. The Fair Municipal Finance Act allows a municipality to pass a by-law creating two or three bands of assessed commercial value in order to apply lower tax rates to lower valued commercial property. A different tax rate would apply to each band. The impact of using only graduated tax rates as a tax policy tool has been examined using two and three-tier tax rate scenarios. The tax rates selected were based on reducing tax shifts by recreating existing tax burdens by property value range The ranges of assessment value and tax rates under the two and three tier tax rate models studied are presented below (see Table 2 in the Appendix for more details). Under the two tier rate model, for example, the first $300,000.00 of current value could be taxed at a rate between 2.0 to 6.0 per cent depending on the model selected. The amount of current value above $300,000.00, if any, would be taxed at a rate between 7.9 to 11.0 percent, again depending on the option chosen.

Summary of Graduated Tax Rate Models

Two Tier Rate Models Three Tier Rate Models
Value Range Tax Rate Range Value Range Tax Rate Range
1st Tier $300K (low) 2.0% - 6.0% $300K (low) 3.0% - 5.0%
2nd Tier $1.1M (high) 7.9% - 11.0% $300K - $1.1M 5.0% - 7.0%
3rd Tier n/a n/a over $1.1M(high) 8.5% - 10.0%

Both the above exhibit and Table 2 in the Appendix were prepared using the preliminary assessment data from February. Extensive analysis conducted on the preliminary data (24 different models which are summarized in Table 3) was not repeated to the same degree using the June 15 assessment information. Instead the analysis was more focussed on the selected graduated tax rate models that provided the greatest benefits based on the previous review of the preliminary data. See "Model M2 GTR" section for this discussion.

The graduated tax rate options examined were only able to limit increases for most strip retail properties to no more than 100 percent. This was achieved by substantially increasing taxes on larger commercial properties particularly on office buildings. Even then, about 2,800 strip retail properties would face tax increases over 100 percent. Although graduated tax rates help to lessen the impact of CVA, they alone are not sufficiently flexible to reduce tax increases on commercial property to acceptable levels.

2.Separate Classes of Property:

Bill 16 allows a municipality to adopt optional property classes, namely - office buildings, shopping centres, vacant land and parking lots, and large industrial properties. The municipality has up to 30 days after the return of the assessment roll to adopt any of the optional classes. The Minister of Finance may extend this period of time up to, but not exceeding 60 days after the roll return, if requested by the municipality. The City has requested such an extension. The review of the office buildings constituted an important part of the examination of separate classes.

Separate Class for Office Buildings:

As noted, one of the reasons for the huge tax shifts within the commercial class is the valuation date (June 30, 1996) in the current reassessment program. In 1996, office buildings (which currently pay half of all commercial property taxes in Toronto) had values far below their replacement cost, because rents and vacancy rates were only beginning to recover from their levels in the early 1990's. For example, Royal LePage reports that in 1996 the average net rent for "Class A" office space in Toronto was in the $4.00 per square foot range.

While CVA, based on 1996 values, with one tax rate would have shifted over $400 million in taxes away from office buildings and on to other commercial properties, this phenomenon is expected to be short-lived. Recent sales of office buildings suggest that the value of office buildings in the downtown may have already doubled from their level in June 1996.

The next reassessment in 2001 will be based on 1999 values. By that time, it is reasonable to expect that the value of office buildings will have substantially recovered and that the tax shift off office buildings and on to other commercial property may be either eliminated or significantly moderated. For example, if the value of office buildings were to double by 1999 and the value of other commercial property were to remain at its June 1996 levels, the tax shift away from office buildings would be only $80 million compared to a $418 million shift based on 1996 values. In the example above, the total tax rate for all commercial property would be 5.9 percent instead of 7.75 percent. But even with a 5.9 percent tax rate for all commercial property, there would still be large tax increases for many strip retail properties.

Data from the proposed reassessment in Metro Toronto in 1992, based on 1988 market values did not show a significant shift of taxes away from office buildings. Therefore, it seems that the values of office buildings fluctuate much more than the values of retail properties, and that these office market cycles of about eight to ten years will create future tax shifts off and on to office buildings. The three-year averaging proposal, which is to be incorporated into the assessment system after 2005, will not be able to moderate these shifts, because it appears that the office market cycle is much longer than three years. Accordingly, prior to the full implementation of three-year average in 2006, the Province should review whether three years is an adequate period of time to average the current values of commercial properties.

In order to eliminate these large tax shifts within the commercial class, one could place office buildings in a separate class. The difficult question is at what relative tax level? Bill 16 enables a municipality to adjust the existing tax burdens of a separate office building class (i.e., a 12.06 percent tax rate) towards the average commercial class tax burden (i.e., a 7.75 percent tax rate). The analysis based on separate classes in this report assumes that existing tax rates for the optional classes are not moved toward the commercial average.

Not all office buildings would have received the same magnitude of tax decreases based on CVA with one tax rate. While attention has, to date, focussed on the large absolute dollar tax decreases that the "bank" towers would have received, the smaller, older Class B and Class C office buildings would have received much larger percentage tax decreases. Therefore, if office buildings were in a separate class, those buildings (mostly bank towers) that would have received small tax decreases under CVA with one tax rate would receive tax increases under a tax system with office buildings in a separate class. It is recommended, as part of a more comprehensive review for a long-term strategy, that office building valuation scenarios be developed and tested against the available tax policy tools before separating them into a separate class.

Further analysis of the office building sector should also be accompanied by examining how small business, particularly strip retail properties, can be protected. The Province has not created a separate class for strip retail properties apparently because it would be very difficult to define this class, particularly if a comprehensive definition were desired. At its meeting on April 28, 29, and 30 and May 1, 1998, Council recommended that the Province be requested to provide municipalities with the authority to create a separate class for retail, restaurant, retail with residential above and retail with office categories. Any definitional problem(s) associated with this new class of property should be reviewed along with other initiatives discussed in the section "Comprehensive Tax Policies" prior to the next reassessment.

The option of separate classes on its own still results in significant tax increases for properties in the residual commercial class, particularly for small or strip retailers. However, graduated tax rates can provide tax relief to some properties within the residual commercial class. The creation of a separate class also locks-in properties at a tax rate that could be significantly higher than the residual commercial class and as a result may be seen to be inequitable.

3.Tax Rebates to Business:

Bill 16 also enables municipalities to provide tax rebates to businesses with significantly high increases that need further protection. The rebate program is primarily intended to provide assistance to the 'outliers' with large increases after other tax policy options have been exhausted. It is not intended to emulate the capping option for tax increases for commercial and industrial properties. The rebate would be funded by increasing the overall commercial tax rate by a sufficient amount to offset the amount of the tax rebate. The amount by which tax rates are increased to fund the tax rebate is equivalent to a budgetary increase for the year and is not eligible to be phased-in. This additional tax amount can be recouped from all properties within the property class eligible for the rebate or from all uncapped property classes. The rebate cannot be funded by withholding or clawing back a portion of the tax decreases within the commercial or industrial property classes.

The Minister shall determine within 30 days of receiving a municipality's rebate by-law whether education taxes would also be eligible for any tax rebate program (i.e., whether the Province will fund the education portion of the rebate program). This could be problematic if a municipality adopts a rebate program and approves its tax rates and the Minister does not agree to fund the Province's share.

Table 3 in the Appendix compares a tax rebate program with the cap and claw back option for properties experiencing tax decreases and increases under CVA. Most significantly, as a result of funding a tax rebate to cap increases at 2.5 percent, properties experiencing tax decreases under CVA would receive reduced decreases and some properties with decreases would end up with tax increases. A property with no tax change under CVA would experience a 35 percent increase if the tax rebate program were funded within the class. Properties with more than a 2.5 percent increase under CVA would receive a 38 percent increase under a rebate plan. Because the overall tax rate must be increased to finance the tax rebate, properties with increases end up with a greater increase than the intended capped amount (i.e., 38 percent instead of 2.5 percent).

The number of business properties that benefit from a tax rebate program depends on the eligibility criteria. The number of commercial properties benefiting, for example, under the 2.5 percent capping level shown in Table 3, would be 26,000. Under a more restrictive scenario, for example properties with increases greater than 100 percent, the number of eligible properties could conceivably range between 4,370 (under selected graduated tax rate models) to 15,250 (under CVA in Table 1). The tax rebate option is not recommended in this report because the capping provision provides better protection to businesses facing significant increases while at the same time, ensuring that no business with a tax decrease under CVA experiences a tax increase.

4.Phase-in:

The legislation allows for the phase-in of assessment-related tax increases up to a maximum of eight years. Any phase-in program must be self-financing so that the amount of the phased-in tax increases is offset by tax decreases within the class. The phase-in program must begin in 1998 and the annual amount to be phased-in must be the same or less than the amount phased-in the previous year. The phase-in provision for assessment-related tax changes for commercial and industrial property on its own is not recommended because even with an eight-year phase-in period there are too many large tax increases. The annual amount of average tax change that would be phased-in under CVA with one tax rate is shown in Table 4. It is evident that some commercial types of property would experience over 20 percent annual tax increases. By the third year of an eight-year phase-in period, almost 1,600 commercial properties would have received tax increases greater than 100 percent.

As a result, a phase-in period longer than eight years would be required to mitigate the impact to a manageable and sustainable level. A phase-in program will likely be considered as part of implementing the next reassessment. Depending on the impacts arising from the next reassessment, a longer phase-in period (e.g., 10 to 20 years) may need to be considered. Otherwise additional tax policy tools would be required to mitigate these increases.

Combinations of Tax Policy Tools:

This section summarizes the major findings from the analysis of tax options for the commercial class. The impact on tax rates that result in each class of commercial property, if Council adopts the option to create separate classes, is shown in Table 5. More detail about the impact of CVA with one tax rate on commercial properties in Toronto is provided in Table 1.

Model 1, in Table 5, examines a separate class for office buildings. Since office buildings are currently taxed at an average tax rate that is considerably higher than the average for all commercial property, separating office buildings reduces the tax rate on the residual or remaining commercial class to 6.09 percent. Although this helps the strip retail properties, it does not provide as much assistance as would be expected if strip retail properties were in a separate class.

Model 2 looks at both a separate class for office and a separate class for the shopping malls. Since shopping malls have an existing tax rate lower than the rest of commercial, the residual commercial tax rate is pushed up to 6.19 percent, from 6.09 percent in Model 1. Similarly, Model 3, which adds a separate class for vacant land and parking lots, raises the tax rate on the residual commercial class to 6.44 percent.

Model M2 GTR is based on a separate class for office and a separate class for shopping malls, with the graduated tax rate option used for the residual commercial properties. A tax rate of 4.12 percent on the first $400,000.00 of current value, was used which allows the top rate to remain at 7.75percent, so that the hotels and other large properties in the residual commercial class would be no worse off than they would have been under CVA with one tax rate.

Implementation Options - Commercial Property:

Option 1: 8 Year Phase-in, Graduated Tax Rates, Separate Classes and Tax Rebate - Model M2 GTR:

Model M2 GTR represents the most potentially viable option of the detailed models studied to date that can be considered as an alternative to capping. In order to provide additional assistance to businesses experiencing significant increases under Model M2 GTR, an eight-year phase-in and a tax rebate plan were also applied. A range of capped tax increases for the first and third years of the phase-in period and the corresponding tax rate impact (to fund the rebated tax amounts) are shown in Table 6. For example, in the first year of the phase-in period, commercial tax rates would increase by 1.7 percent in order to rebate commercial property with tax increases greater than 2.5 percent, and increases to 5.7 percent by the third year as summarized in the following:

Change in Total Commercial Tax Rate to Fund Tax Rebate (selected scenarios)

1st Year of Phase-in

3rd Year of Phase-in
Increases Greater Than are Rebated Tax Rate Increase Required to Fund Rebate Tax Rate Increase Required to Fund Rebate
2.5% 1.7% 7.4%
5.0% 1.2% 6.4%
7.5% 1.0% 5.7%
10.0% 0.7% 5.1%
15.0% 0.5% 4.0%
20.0% 0.4% 3.3%

Tables 7 and 8 show the benefit that a Model M2 GTR phase-in plan combined with a tax rebate provides when compared to a Model M2 GTR phase-in without a tax rebate. The reduced tax increases under the tax rebate option in Table 7 are funded by an overall increase in the commercial tax rates. Therefore, some property types will experience, on average, smaller decreases or even tax increases (e.g. office buildings, hotels, medical/dental offices and other commercial). Accordingly, the impact of funding the tax rebate tends to cancel some of the benefits of the other features of Model M2 GTR for some properties. However, without a tax rebate there would be 1,595 properties with tax increases greater than 100 percent by the third year of the phase-in, as shown in Table 8.

The Model M2 GTR should be studied as part of the comprehensive review of tax options prior to the next reassessment. The model creates separate classes for office buildings and regional shopping malls. The creation of separate classes, as pointed out earlier, raises questions about the appropriate level of taxation for these new classes over the long term. Bill 16 allows for the shifting of taxes between the commercial and optional classes. Any downward adjustment to the office building tax burden, for example, towards the average tax burden for the commercial class would require shifting taxes either on to commercial properties below the class average or on to the residential/farm class or both. The creation of separate classes should not be undertaken without a long-term strategy of the relative tax levels for new property classes.

Option 2: 2.5 Percent Cap on Tax Increases:

Bill 16 provides Council with the option to cap all commercial, industrial and multi-residential tax increases resulting from tax reform at 2.5 percent per year for three years. If Council adopts this provision, it will be locked-in until the next reassessment in 2001. Municipalities cannot opt out of the cap once imposed. Conversely, Council may not opt into the cap after 1998. Most significantly, the cap limits any tax increase in those property classes that are capped to 2.5 percent of their 1997 taxes. Any budgetary increases cannot be imposed on capped property classes. Council would have to fund budgetary increases from uncapped property classes. This is a new development since the Minister of Finance's March 27 announcement of new tax tools, which made no reference to any such condition.

The tax reform legislation to date has either referred to assessment-related or tax policy changes (i.e., a tax shift between classes) without any special rules relating to budgetary increases. Council should not be restricted in how it funds budgetary increases from the property tax base. It should have the choice of funding a part of or all budgetary increases from either an uncapped class (i.e., residential/farm class) or from all classes proportionately. It is recommended that the Province be requested to rescind any restriction in Bill 16 that hinders Council's ability to fund budgetary increases from all property classes should the capping provisions be adopted. However, the implementation of the 2.5 percent cap could conceivably act as an incentive to freeze taxes over the next two years. If there were budget-related tax increases, effectively resulting in a tax shift to the residential/farm class, this would not be inconsistent with the long-term tax reform goal of reducing business property taxation levels in Toronto as discussed in an accompanying report.

A municipality has 30 days after the return of the assessment roll to adopt the capping provision. However, the Minister of Finance may extend this deadline up to, but not exceeding 60 days following the roll return. The 2.5 percent cap on tax increases would limit the tax decreases, by clawing back the amount of tax decreases to some sufficient level to fully offset the cap on increases. Table 9 shows the impact of the caps on the tax decreases for each of the separate class options discussed above. If Council chooses to proceed with CVA with one tax rate for commercial property and cap increases, only 4.97 percent of the amount of tax decreases could be allowed (i.e., 95 percent of the tax decreases under CVA would have to be clawed back) in the first year. For example, a business property with a $5,000.00 decrease would receive a $248.50 decrease. The amount of the allowed decrease goes up to an estimated 10.16 percent in the third year, resulting in a $508.00 decrease in the above example.

Many tenants in shopping centres have suggested that they would be facing increases well beyond the 2.5 percent cap as a result of the building owner's allocation of the tax changes, including the elimination of the business occupancy tax, among small and large stores in the building. Bill 16 protects tenants and ensures that the tenant pays only the tax amount required under the lease in 1997. However, the legislation also provides for landlords to recoup more than the 1997 taxes actually paid by tenants if this tax amount was less than the amount allowed under the lease.

It is important to appreciate that Model M2 GTR cannot provide the same protection to individual tenants, such as small commercial tenants in shopping malls, that the 2.5 percent capping provision ensures. The capping option ensures that tax reform does not result in additional tax shifts within a property caused by the elimination of the business occupancy tax.

The protection provided to tenants also makes the tax rebate program for charities and similar organizations redundant. The cap ensures that tenants do not pay more than 2.5 percent more than in 1997, where tax increases are applicable, thereby eliminating the need to rebate charities and similar organizations. By adopting the cap for commercial and industrial property, Council avoids the administrative costs associated with tax rebates. The cap on commercial property also ensures that the property of the Toronto Transit Commission and the Toronto Hydro Electric Commission, which is classified as commercial and pays taxes, would also be limited to an increase, where applicable, of 2.5 percent each year in the 1998-2000 period.

Analysis of Option 1 vs. Option 2:

Despite the mitigating effect of graduated tax rates and separate classes, there would still remain a large number of businesses with significantly high tax increases. Additional tax tools such as tax rebates and phase-ins would be necessary. However, with the expected change in office building values by the next reassessment, as discussed previously, it is not considered advisable to phase-in CVA tax impacts which are anticipated to be quite different from those in 2001. The 2.5 percent cap also ensures that no business is significantly impacted, and in the interim allows for a limited amount of tax change. The impact of CVA with one tax rate, the impact of a 2.5 percent cap on increases (for both the first and third years of the capping option), and the impact in the first and third years of an eight-year phase-in are shown for each separate class option. The results of these options are summarized in Tables 10 - 12 in the Appendix.

Table 10 shows the impact of CVA applied without any caps or phase-in. Table 11 shows the impact of the 2.5 percent cap in the first and third years for each of the selected separate class options. Table 12 shows the impact in year 1 and year 3 of an eight-year phase-in for each of the selected separate class options. If Council wishes to cap the tax increases, it does not make much difference which underlying tax policy option(s) is chosen. For example, by the third year under capping (i.e., 2000), retail properties with residential uses above would have increased by 7.2 percent under CVA with one tax rate, compared to 4.6 percent under Model M2 GTR.

Although Model M2 GTR is a promising model and is recommended for further study, it should be noted that it contains a separate class for office buildings. As mentioned earlier, a separate office building class locks-in these properties at an effective tax rate that continues their uncompetitive tax status among North American cities. This dampens the competitive position of this sector, which constitutes about half of the employment base plays a crucial role in the Toronto economy.

The benefit of capping vs. phase-in is that it provides Council with the ability to limit the impact of the effects of CVA while still proceeding with some measure of tax reform, albeit on a limited scale. The cap is an interim step towards a more detailed plan to be prepared in time for the next reassessment. In addition, the capped three-year period (1998-2000) also allows for the updating of commercial assessments, particularly for office buildings, to more accurately reflect recent rental activity in this sector. As well, the definitional problems in creating a separate strip retail class may also be resolved.

Together the capping provisions along with the availability of all the current tax policy tools in 2001, effectively allows for the deferral of comprehensive reform of business property taxation in Toronto until the next reassessment. Consequently, Council is not locked into any long-term reform package that has not had the benefit of in-depth analysis and review. An inappropriate tax reform plan, even if phased-in over a long period, could create serious impacts and require significant remedial action(s). It is recommended that the capping provisions under Bill 16 be implemented and the other tax policy measures available for commercial and industrial property, including graduated tax rates, separate classes of property, tax rebates and phase-ins not be implemented at this time. This essentially endorses an Option 2 approach as discussed above.

It is important to note that although the capping provisions provide Council time to prepare for the next reassessment, the cap itself reduces Council's flexibility in funding any budgetary tax increases. If this arises, capping commercial and industrial properties provides Council with an incentive over the next two years to meet zero tax increases in those years. During these three years, Council will only be permitted to fund budgetary tax increases from uncapped property classes. For example, a one percent increase in the net levy funded exclusively by the residential/farm class amounts to a 2.8 percent increase in the municipal residential/farm tax rate or a 1.8 percent increase in the total residential/farm tax rate. Budgetary tax increases could begin to reduce the comparatively higher taxes on business, and for multi-residential properties for that matter, and make business taxes in Toronto more competitive. Capping requires substantial administrative maintenance of the 1997 assessment data in order to calculate revised capped amounts. The administrative requirements of a phase-in plan are somewhat less onerous. Phase-ins require that any physical changes to the property to be updated, whereas capping requires that changes in commercial and industrial vacancies be maintained in addition to physical changes.

Underlying Tax System:

If Council adopts the 2.5 percent cap, the impact of the decisions involving separate classes for office buildings and graduated tax rate options becomes less significant. However, the direction of the tax changes can be influenced by any choices that Council makes, if it elects to, around separate classes and graduated tax rates. For example, a strip retail property currently taxed at a level well above most strip retail properties, but below the commercial average, might be paying 1997 taxes at six or seven percent of its 1996 value. Under capping, this property would face a tax increase of 7.5 percent over three years, if all commercial property were taxed at one tax rate. On the other hand, if a separate office building class was created and some form of graduated tax rates were implemented, this same strip retail property would experience a tax decrease over the next three years. Different tax policy options will generally yield different results from one another.

The choices made about the underlying tax system will also send a strong signal to markets about how Council intends to set relative tax rates for each type of commercial property in the long-term. For example, should strip retail properties pay taxes in the long run at the same level as other commercial properties? While certainty in the treatment of property over the long-term is desirable, there is not sufficient time in which to completely identify or analyze the implications of the multitude of possible options. Additional time to fully examine the results of using the new provincial separate class definitions and the different tax rates applied to these types of property is necessary to implement these classes in a way that is both fair and defensible. Input from the business community on these matters can play a valuable role and is further discussed later in this report. There is also a very real risk that any hurried decisions made by Council over the next few weeks may not be sustainable in the long run, and that yet another set of changes would be necessary in the future.

Industrial Class Tax Impacts:

The estimated tax impacts for industrial properties based on the final assessment roll shows that there are 30 percent industrial assessment portions experiencing a decrease and 70 percent with an increase. The average tax decrease amounts to $28,675.00 or 18.9 percent while the median decrease amount is $7,696.00 or 15.1 percent. In terms of increases, the average increase is $11,527.00 or over 3,000 percent (largely due to vacant lands) and the median increase is $4,936.00 or 50.6 percent.

This section outlines the results of applying the tax policy options to industrial properties. Bill 16 introduced the option of creating additional classes within the industrial class for large industrial properties. The graduated tax rate option was extended to the industrial property class and the option of capping all tax increases at 2.5 percent per year for three years was also introduced. Details about the impact of CVA with one tax rate on industrial properties in Toronto are provided in Table 13.

Tax Policy Options - Industrial Property:

1.Graduated Tax Rates:

Similar to commercial property, Council can also consider using graduated tax rates to decrease the tax rate on lower valued industrial properties. The application of graduated tax rates as the only tax policy option to industrial property was tested under Model I-2 in Table 14. This model provides for the first $200,000.00 of CVA to be taxed at 7.0 percent, the next $300,000.00 (i.e., $200,000.00 to $500,000.00) taxes at 11.0 percent and any CVA over $500,000.00 taxed at 12.52 percent. However, as shown in Table 14, overall there is not a significant difference on average between the graduated tax rate option and CVA with a single tax rate. It appears that industry in residential property, industrial condominiums, industrial property valued less than $1 million and small warehouses, in particular benefit from this model.

2.Separate Classes:

The "large industrial properties" class includes all industrial properties with gross floor area greater than 125,000 square feet. Those buildings less than this threshold remain in the residual industrial class. Model I-1 in Table 13 shows the impact of creating a separate class for large industrial properties. Since large industrial properties are taxed at an average rate that is slightly higher than the average for all industrial property, separating them into their own class reduces the tax rate on the balance of industrial properties. The tax rate on the residual industrial class does not change very much as a result of separating the large industrial properties, because the large industrial properties are a small part of the industrial tax base.

Council can choose to maintain the full differences in tax rates among any industrial classes that it creates. For estimate purposes it has been assumed that Council will choose to maintain the differences in the tax rates among any new industrial classes. Bill 16 allows Council the option of moving the tax rate for a new separate class towards the average rate for the entire industrial class.

3.Tax Rebates:

The results of a tax rebate program on its own are shown in Table 15. Similar to the example for commercial properties, the increase in the industrial tax rate to fund the rebate is significant. To provide assistance in the first year similar to the 2.5 percent capping option, the industrial tax rate would increase by 13.2 percent. The cost of funding the rebate and consequently the impact on the industrial tax rate decreases as the threshold for the rebate declines. It would be more appropriate to consider the rebate in conjunction with other tax tools, as is discussed below.

Implementation Options - Industrial Property:

The impacts of the tax policy options examined for industrial property are shown in Table 16. In addition to CVA with one tax rate, Table 16 presents average tax changes for the first year of an eight-year phase-in; graduated tax rates and graduated tax rates combined with a phase-in plan; a phase-in and tax rebate plan; and the 2.5 percent capping option. The tax impacts in the third year of each of these options is presented in Table 17.

Option 1: Phase-in of Graduated Tax Rates and Tax Rebates:

The average tax impacts of the various options for industrial property as shown in Table 16 generally do not reflect the range of diversity demonstrated by commercial property. This would suggest that the industrial property class might not need many tax policy options to make the tax changes manageable, if a tax cap is not adopted.

Graduated tax rates for industrial property were combined with a phase-in plan. The impact of the first year of an eight-year phase-in for the Model I-2 is shown in Table 14. A comparison of the first year of CVA with one tax rate and the first year of the graduated tax rate model overall does not show a significant difference except for industrial condominiums. Consequently, graduated tax rates combined with a phase-in plan are not recommended.

Alternatively, tax changes could be phased-in combined with a tax rebate to industries with significant increases. The impact of funding a tax rebate program with an eight-year phase-in is not significant as shown in Table 15. The program results in a 0.6 percent increase in the industrial tax rate in the first year of the phase-in, if tax increases are capped at, for example, the 7.5 percent level. By the third year the impact would be 3.0 percent.

However, excluding vacant land can reduce the cost of the rebate program. For example, the cost of the rebate in the third year ($10.2 million) can be cut by almost 50 percent and reduced to $5.4 million. From an economic development perspective, tax assistance to vacant industrial land, in the form of a tax rebate program has some advantages as well as some obvious disadvantages. Lowering the taxes on a vacant parcel would lower its carrying cost, make it more likely that the owner continues to hold the land. It is then more likely that, in the case of an existing firm, on-site expansion will occur rather than searching for another location, should its space requirements expand in the future.

On the other hand, lowering taxes on vacant land will create an incentive to demolish existing industrial buildings, at times when demand for these buildings is low, as was the case only a few years ago. The former assessment system provided a similar incentive because land was effectively taxed at a much lower percent of value than were buildings, and several older industrial and in some cases office buildings were demolished primarily for tax reasons. On balance, a lower tax rate on land than on buildings should not be implemented.

Option 2: 2.5 Percent Cap on Tax Increases:

The mitigating impact of the 2.5 percent cap is shown in Table 14 for the first year of the three-year period. When compared with CVA, the cap ensures that tax increases are manageable. In consultation with the Economic Development Division, it is considered appropriate that the implementation of comprehensive tax reform should apply to both commercial and industrial property classes simultaneously and not to one class only, while the other is capped. Furthermore, commercial and industrial uses are inter-linked, particularly where both uses occupy the same property. Therefore, it is recommended that industrial properties be treated in the same fashion as commercial properties, and that all tax increases be capped at 2.5 percent per year for three years. As a result, it will be necessary to claw back a significant portion of the tax decreases that would have resulted from CVA. In the first year, it will be necessary to claw back 87 percent of the amount of tax decreases under CVA (i.e., 12.84 percent of decreases can be allowed), and in the third year it will be possible to allow 23.47 percent of the amount of tax decreases otherwise permitted.

The underlying tax system for which the caps have been proposed is CVA with one tax rate. More detailed analysis is required to determine whether or not the graduated tax rate system is more equitable or better from an economic development perspective than taxing all industrial property at the same tax rate.

The tax rate on industrial properties is much higher than on commercial properties and creates a serious equity question, which needs to be addressed. The industrial class has the highest tax rates of any property class in Toronto. The difference in tax rates between industrial uses and commercial uses (11.06 percent and 7.75 percent respectively) is of particular concern because many industrial properties contain both industrial and commercial tenants. In fact, the value of commercial uses in industrial properties is almost as large as the value of industrial uses in industrial properties. The difference in tax levels creates a powerful incentive for the owner of an industrial park or a multi-storey industrial building to lease space to commercial users rather than industrial users, because the tax advantage helps commercial uses out-bid manufacturers for industrial space. This situation creates potentially substantial negative employment and investment impacts and further hinders the competitiveness of industry in Toronto.

This issue is further reviewed in an accompanying report which identifies the tax impacts of moving towards equity in terms of relief for the industrial class, and for that matter, the commercial class as well. The resulting tax shifts in the analysis identify the impacts on the residential/farm class which the new taxation system clearly shows is paying at a lower rate of taxation. Changes to the comparative taxation levels among the property classes are needed to ensure that Toronto remains as a competitive place for business.

Comprehensive Tax Policies:

It is difficult to attempt to make all of the complex decisions about the relative tax rates for each sub-class of commercial and industrial property in the next few weeks. Bill 16 for the 1998 taxation year, requires a municipality to decide whether it will opt any of the separate classes within 30 days following the return of the assessment roll (with a possible 30 day extension). This timeframe provides Council little time to explore the impact of all possible new classes in addition to all the other tax reform decisions required.

Review of Model M2 GTR for the commercial property class indicates the level of detail required making the CVA tax impacts manageable. This model consists of a full package of tax options - graduated tax rates, separate classes, a phase-in and a tax rebate. Prior to the implementation of this option with all its details, additional time would be required to study the full range of its impacts. As such, its implementation is not recommended at this time.

It is evident that the proposed 2.5 percent cap on increases is viewed as an interim solution, so that the City and the Province have time to address all of the complex tax policy issues before the next reassessment. The Province has indicated that all tax options including the ability to phase-in tax increases and decreases, create separate commercial and industrial classes and impose graduated tax rates will be available to municipalities in the next reassessment. It is proposed that a work plan be developed that would allow these tax policy options to be reviewed over the next two to three years, including the establishment of a Business Reference Group to assist in the process.

This solution may not give as much comfort to commercial and industrial taxpayers facing large tax increases under CVA, such as strip retailers, in the short-term, as a plan that clearly sets out where Council would prefer relative taxes to be for the various sub-classes of commercial property. However, these taxpayers would at least have the comfort that the tax increases under CVA with one rate are not intended to be a long run goal of Council. The cap ensures that businesses will not be significantly impacted over the next three-years. Furthermore, tenants in commercial and industrial properties will be protected from tax increases beyond 2.5 percent. Council's adoption of the 2.5 percent cap will also make unnecessary the tax rebate mechanism for charities and similar organizations and will considerably decrease the administration and cash flow issues for these organizations.

The 2.5 percent cap provision enables Council to begin providing relief to commercial and industrial properties by shifting budgetary tax increases on to the residential/farm class. This is consistent with the long-term goal of reducing the level of business property taxation that Council should consider as part of tax reform. The shift in taxes on to the residential/farm class will begin moving towards property class tax equity and improve the competitive position of business in Toronto, which is critical to maintaining the economic vibrancy of the Toronto economy.

Conclusions:

Council can implement tax reform for commercial and industrial property using either a detailed plan including some combination of graduated tax rates, separate classes, phase-ins and a tax rebate. Alternatively, Council may cap tax increases. It is recommended that all commercial and industrial property tax increases be capped, pursuant to Bill 16, at 2.5 percent of existing taxes per year for the 1998-2000 period and be funded by limiting the amount of tax decreases resulting from reassessment. No other tax policy measures are recommended for commercial and industrial property at this time, because there is not sufficient time to fully consider and make all of the necessary tax policy decisions.

The 1998-2000 period should be viewed as an interim step for commercial and industrial properties in terms of assessment and taxation reform. It is recommended that a work plan be developed to address all of the tax policy issues that need to be considered before the next reassessment in the 2001 taxation year. The issues that need to be addressed over the next two to three years include the relative tax rates for different types of business property, consideration of separate property classes for types of commercial and industrial property, and a further review of the tax policy tools available to the City.

Contacts:

Peter Viducis392-1005

Ed Zamparo 392-8641

Bill Wong392-9148

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(City Council at its Special Meeting on July 21 and 23, 1998, had before it, during consideration of the foregoing Clause, the following report (July 23, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

To obtain Council's authority for the adoption of by-laws for the levying and collection of taxes for the 1998 taxation year, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and for the levying of a special charge for 1998 for certain Business Improvement Areas. Also attached for Council's information are draft by-laws concerning the residential property class phase-in program with or without a threshold and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes.

Recommendations:

It is recommended that:

(1)Council authorize the levy and collection of taxes for the 1998 taxation year, the imposition of a penalty charge for non-payment of 1998 taxes, the provision of interest to be added to tax arrears and to establish tax ratios for the year 1998;

(2)Council approve the levy of a special charge for 1998 for the following Business Improvement Areas and to provide for its collection: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St.Lawrence Neighbourhood; Upper Village and Weston;

(3)authority be granted for the introduction of the necessary bills in Council to levy taxes for the year 1998 and to provide for the collection of taxes for 1998 other than those levied under By-law No. 10-1998, to impose a penalty charge for non-payment of taxes, to provide for interest to be added to tax arrears, to establish tax ratios for the 1998 taxation year and to levy a special charge for 1998 for certain Business Improvement Areas and provide for its collection, in the form or substantially in the form of the draft by-laws attached hereto; and

(4)subject to Council adopting a residential property class phase-in program with or without a threshold; and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential, commercial and industrial property classes, that leave be granted for the introduction of the necessary bills in Council to give effect thereto in the form or substantially in the form of the draft by-laws attached hereto.

Comments:

The draft by-laws are: (1) to levy and collect taxes for the year 1998, to impose a penalty charge for non-payment of 1998 taxes, to provide for interest to be added to tax arrears and to establish tax ratios for the year 1998; (2) to levy a special charge in 1998 for certain Business Improvement Areas and to provide for its collection; (3) to phase-in tax changes in the residential property class with or without a threshold; and (4) to cap increases and decreases of property taxes on the commercial, industrial and multi-residential classes for the taxation years 1998, 1999 and 2000.

The levying by-law sets the final tax rates for all property classes, which are set out in Sections 6 and 7 of the attached draft by-law. The tax rate for the residential property class of 1.259702 percent includes a non-phaseable portion of .0217 percent relating to the finalization of various provincial components of the bill -- provincial tax ratios and full use of the provincial education tax room. The by-law imposes a penalty rate of 1.25 percent per month for the non-payment of taxes in the 1998 taxation year and provides for the payment of interest at 1.25 percent per month to be added to tax arrears. The by-law also establishes tax ratios.

Budgets for the following Business Improvement Areas have already been adopted by Council: Bloor by the Park; Bloor Court Village; Bloor West Village; Bloor-Bathurst-Madison; Bloor-Yorkville; Bloordale Village; Corso Italia; Danforth by the Valley; Eglinton Way Village; Forest Hill Village; Gerrard India Bazaar; Greektown on the Danforth; Harbord Street; Islington Village; Junction Gardens; Kennedy Road; Kingsway; Lakeshore; Little Italy; Long Branch; Mimico Village; Old Cabbagetown; Parkdale Village; Queen/Broadview Village; Roncesvalles Village; St. Lawrence Neighbourhood; Upper Village and Weston. It is now necessary to levy and collect a special charge for the Boards of Management of each respective Business Improvement Area.

The attached draft by-laws, which have been prepared by the City Solicitor, give effect to the recommendations in my reports respecting a residential property class phase-in program with or without a threshold (dated July 2, 1998); and the capping of taxes at 2.5 percent per year for the years 1998 - 2000 for the multi-residential (dated June 29, 1998) and commercial and industrial property classes (dated June 26, 1998).

Contact Name:

Paul Wealleans, Phone: 397-4208)

(A copy of each of the by-laws, referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July 20, 1998) from the Chief Financial Officer and Treasurer:

At its meeting on July 11 and 13, 1998, the Assessment and Tax Policy Task Force requested that the following information be made available for Council's consideration of the proposed tax implementation plan at the special Council meeting on July 21 and 23, 1998:

(i)background information on the average incomes of tenants and homeowners;

(ii)Ontario tax credit form included in the personal income tax form; and

(iii)Table 7 embodied in the report (June 26, 1998) from the Chief Financial Officer and Treasurer entitled, "Commercial and Industrial Property: Tax Policy Options" revised to provide additional analysis of Councillor Walker's motion regarding the commercial property class.)

(A copy of the Ontario tax credit form, appended to the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July 21, 1998) from Councillor Elizabeth Brown, Rexdale-Thistletown:

Please find attached a copy of a letter which I have received from business owners in my Ward.

I have received a total of 360 letters and have submitted them to the Clerk for the record.

Thank you for taking the above-noted into account.

(The 360 letters in support of the proposed 2.5 percent cap on commercial property tax, referred to in the foregoing communication, are on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, communications from the following individuals in support of the proposed 2.5 percent cap on commercial property tax:

(i)(June 29, 1998) from Mr. Robert Kelly;

(ii)(July 13, 1998) from Mr. John Campbell, President, Brookfield Management Services;

(iii)(July 16, 1998) from Mr. Robert C. Primeau, C.A., Vice President, Finance and Administration, Heidelberg Canada Graphic Equipment Limited;

(iv)(July 16, 1998) from Ms. Diana Currie, Senior Vice President Director of Stores, Suzy Shier Inc.;

(v)(July 20, 1998) from Mr. Richard Burnet, C.A., Controller, The Forzani Group Ltd.;

(vi)(July 17, 1998) from Mr. Mitch Zarbatany, President and CEO, Guess?;

(vii)(July 17, 1998) from Mr. A. Sullivan, VP Finance and Administration, Laura Secord:

(viii)(July 20, 1998) from Mr. Brian Worts, President and CEO, S.C. Food Services (Canada) Inc.;

(ix)(July 20, 1998) from Yefih Grimblat, Crepe de Paris;

(x)(July 17, 1998) from Mr. Graham Canning, Vice-President, Controller, Thriftys;

(xi)(July 17, 1998) from Mr. Steve Somers, President, Dylex Woman's Wear Group;

(xii)(July 17, 1998) from Mr. Elliott Wahle, President and CEO, Dylex Limited;

(xiii)(July 17, 1998) from Mr. Marc Chouinard, President, BiWay Stores;

(xiv)(July 17, 1998) from Mr. Lee Albert, Director, Real Estate, le chateau;

(xv)(July 20, 1998) from Mr. I. Teitelbaum, Chairman of The Board, Suzy Shier; and

(xvi)(July 20, 1998) from Ms. Anne Pitts, Vice President Store Operations, La Senza Inc.)

5

Property Tax Rebates for Charitable and

Similar Organizations

(City Council at its Special Meeting on July 21 and 23, 1998, amended this Clause by adding thereto the following:

"It is further recommended that the Chief Financial Officer and Treasurer be requested to:

(1)submit a report to the Assessment and Tax Policy Task Force in October, 1998, on any hardship cases arising from the 2.5 percent cap for charitable and non-profit organizations;

(2)submit a report to Council, through the Strategic Policies and Priorities Committee in September, 1998, on a fair tax policy for ethno-cultural centres; and

(3)prepare for Council a communication package summarizing the details of the tax plan.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 13, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on July, 6, 7, 11, and 13, 1998, recommended to the Strategic Policies and Priorities Committee and City Council that:

(A)Since the Assessment and Tax Policy Task Force has already recommended that Council adopt the capping provision, as contained in the Small Businesses and Charities Protection Act, for the commercial and industrial property classes, it recommends that:

(1)no property tax rebate program be instituted for charitable and similar organizations in the industrial and commercial property classes for the duration of the capping period (1998-2000);

(2)options to protect charitable and similar organizations in the commercial and industrial property classes, including requesting from the Province the creation of a separate class for such organizations, be included as part of the workplan to review assessment and taxation changes prior to the next reassessment in 2001 in order to minimize any impact to charitable and similar organizations arising from assessment and tax reform.

(3)no property tax rebate program be instituted for charitable and similar organizations located in taxable properties in the residential or multi-residential property classes.

(B)Should Council not adopt the capping option on tax increases for the commercial and industrial property classes the Assessment and Tax Policy Task Force recommends that:

(1)funding in the amount of $437.0 thousand be provided within Corporate Expenditures to provide for a mandatory 40 percent rebate on property taxes for registered charities in the commercial and industrial property classes; and

(2)funding in the amount of $3.4 million be provided within Corporate Expenditures to provide for a 40 percent rebate on property taxes for similar organizations in the commercial and industrial property classes as shown in the Category 1(b) and 1(c) type organizations listed in Tables 3 and 4 of this report.

(3)the following preliminary eligibility criteria for similar organizations be referred to the Municipal Grants Review Committee to be considered as part of the development of a municipal grants policy, and that the Chief Financial Officer and Treasurer, after consultation with the Community Social Planning Council and the United Way of Greater Toronto, be requested to advise on the administration of the tax rebate program to that Committee:

To be eligible as a similar organization under the tax rebate program, an organization(s):

(a)must demonstrate a concern for the relief of poverty, or for people in emotional, physical or spiritual distress; or,

(b)must provide a clear service or benefit to the community, in that it concerns itself with the advancement of science, education, philosophy, religion, art, sports and other causes beneficial to the community (human services, culture and heritage, public health, recreation, human rights and equity); and,

(c)must be operated on a not-for-profit basis (with no share capital) and be accountable to the community; and,

(d)services and activities must be accessible to the community as a whole or for an