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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 October 1 and 2, 1998

STRATEGIC POLICIES AND PRIORITIES COMMITTEE

REPORT No. 19

1Veterans' Clubhouses and Legion Halls

2Reassessment and Tax Policy Information and Communications Plan

3Ontario Property Assessment Corporation- Recovery of 1998 Costs

4Owner-Occupied Condominiums

5Extension of Property Assessment Appeal Deadline

6Capping of Business and Realty Taxes for BIAs

7Staff Lay-offs in Works and Emergency Services

8Other Item Considered by the Committee

City of Toronto

REPORT No. 19

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on October 1, 1998,

submitted by Mayor Mel Lastman , Chair)

As Considered by

The Council of the City of Toronto

on October 1 and 2, 1998

1

Veterans' Clubhouses and Legion Halls

(City Council on October 1 and 2, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force recommends that the report (September 22, 1998) from the Chief Financial Officer and Treasurer be amended by deleting the words, "November 15, 1998" from Recommendation No. (6) and replacing them with "November 11, 1998" , and that the report, as amended, be adopted.

The Task Force advises that it has requested the Chief Financial Officer and Treasurer to provide to the Task Force a list of all service clubs and agencies for which a property tax exemption has been provided.

The above recommendation carried unanimously as follows:

Yeas:Councillors Adams, Augimeri, Balkissoon, Bossons, Davis, Flint, Kinahan, Nunziata, Ootes and Walker.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a report (September 22, 1998) from the Chief Financial Officer and Treasurer respecting Veterans' Clubhouses and Legion Halls, and recommending:

(1)That the exemptions for City purposes for 1998 in the amount of $145,539 for the Veterans' Clubhouses, Canadian, British and Allied Forces be continued as set out in Appendix 3 of this report be granted;

(2)That the grants for 1998 in the amount of $140,050 for Veterans' Clubhouses, Canadian, British and Allied Forces as set out in Appendix 3 of this report be approved;

(3)That the 1998 grants be deemed by Council to be in the interest of the municipality;

(4)That authority be granted for the introduction of the necessary bills in Council;

(5)That, for 1999, 2000 and 2001 exemptions for City taxes in the amount of $314,023 annually for all Veterans' Clubhouses, Canadian, British and Allied Forces as set out in Appendix 4 of this report be granted; and that each organization provide financial information annually to the CFO including membership lists;

(6)That the City exemption be reviewed in three years, with such review to include examination of the membership and financial status of such organizations to determine continued exemption;

(7)The Province of Ontario be requested to exempt the education portion of taxes for all Veteran's Clubhouses, Canadian, British and Allied Forces as set out in Appendix 3 of this report, or, failing that, authorize the City of Toronto to cancel the education portion of taxes for these properties;

(8)That the Province of Ontario be requested to reply to the City's request noted in Recommendation 7 (noted above) no later than November 15, 1998;

(9)That the Chief Financial Officer and Treasurer be directed to report to the Municipal Grants Review Committee once the response from the Province is received and on the disposition of grants for 1999 and future years;

(10)That the appropriate civic officials be authorized and directed to take whatever action is necessary to give effect to the foregoing.

During consideration of the foregoing matter, the Task Force also had before it the following communications:

-(September 14, 1998) from Mr. Robert Dollack, Immediate Past President, Naval Club of Toronto; and

-(September 29, 1998) from Ms. Charlcie Stickley, Branch 31, Royal Canadian Legion

The following persons appeared before the Task Force in connection with the foregoing matter:

-Ms. Charlcie Stickley, obo RCL Branch #31, Mount Dennis;

-Mr. Robert F. Dollack, obo Naval Club of Toronto;

-Mr. Sam Leslie, obo RCL Branch #3;

-Mr. John Jeffery, obo RCL Branch #614, Zone D5; and

-Mr. Marty Venman, obo Baron Byng Branch #1, RCL Zone D3.

The Task Force's recommendation is noted above.

--------

(Report dated September 22, 1998, addressed to the

Assessment and Tax Policy Task Force,

from the Chief Financial Officer and Treasurer)

Purpose:

This report provides information regarding the impact of CVA on veterans' clubhouses and legion halls and suggests a policy to address the previous tax relief programs provided by the former municipalities in Toronto.

Financial Implications:

For the 1998 tax year, it is recommended that grants and exemptions to offset realty taxes be approved by City Council for Veterans' Clubhouses that previously received such grants and exemptions in 1997. The amount of tax relief totals $285,589.00. Of this total, the amount of taxes foregone as a result of the exemptions is $145,539.00, while the amount of grants to be provided totals $140,050.00. Funds for the grants have been allocated in the 1998 Operating Budget.

For 1999, 2000 and 2001, it is recommended that Council exempt all veterans' clubhouses from the city portion of taxes. The additional $171,929.00 amount of taxes that would be foregone as a result of the proposed expanded exemption is for 1999 and for each year thereafter.

Recommendations:

(1)That the exemptions for City purposes for 1998 in the amount of $145,539.00 for the Veterans' Clubhouses, Canadian, British and Allied Forces be continued as set out in Appendix 3 of this report be granted;

(2)That the grants for 1998 in the amount of $140,050.00 for Veterans' Clubhouses, Canadian, British and Allied Forces as set out in Appendix 3 of this report be approved;

(3)That the 1998 grants be deemed by Council to be in the interest of the municipality;

(4)That authority be granted for the introduction of the necessary bills in Council;

(5)That, for 1999, 2000 and 2001 exemptions for City taxes in the amount of $314,023.00 annually for all Veterans' Clubhouses, Canadian, British and Allied Forces as set out in Appendix 4 of this report be granted; and that each organization provide financial information annually to the CFO including membership lists;

(6)That the City exemption be reviewed in three years, with such review to include examination of the membership and financial status of such organizations to determine continued exemption;

(7)The Province of Ontario be requested to exempt the education portion of taxes for all Veteran's Clubhouses, Canadian, British and Allied Forces as set out in Appendix 3 of this report, or, failing that, authorize the City of Toronto to cancel the education portion of taxes for these properties;

(8)That the Province of Ontario be requested to reply to the City's request noted in Recommendation 7 (noted above) no later than November 15, 1998;

(9)That the Chief Financial Officer and Treasurer be directed to report to the Municipal Grants Review Committee once the response from the Province is received and on the disposition of grants for 1999 and future years;

(10)That the appropriate civic officials be authorized and directed to take whatever action is necessary to give effect to the foregoing.

Summary:

For the 1998 taxation year, this report recommends that grants and exemptions to offset realty taxes be approved by City Council for certain Veterans' Clubhouses to maintain the status quo for those clubhouses and legion halls that received tax relief from some of the former area municipalities in 1997. The total amount of taxes foregone as a result of the exemptions is $145,539.00, while the total amount of grants to be provided total $140,050.00. The total amount of tax relief recommended to be provided in 1998 (grants and exemptions) is $285,589.00.

This report also sets out four options with respect to continuing, or phasing-out, tax relief for veterans' clubhouses in 1999 and subsequent years; and recommends that any change to the tax relief provided to these organizations begin in the 1999 tax year so that these organizations can make whatever financial arrangements are necessary based on Council's decision on this issue.

Comments:

There are 46 veterans' clubhouses located across the City of Toronto. Appendix and 2 shows the amount of total taxes billed and paid in 1997 as well as the impact of reassessment on these organizations. Based on the final assessment roll for 1998, 36 clubhouses or 78 percent will receive tax decreases while 10, or 22 percent will receive tax increases as a result of reassessment. The average decrease is $11,920.00 or 56.8 percent and the average increase is $13,765.00 or 113.2 percent.

Owned vs. Leased Premises:

The regulations set by the Province regarding property class definitions show that non-profit service, recreational and private clubs that own and occupy their property are assessed in the residential class. As a result, veterans' clubhouses that own their property should be assessed as residential, while clubhouses that lease space in commercial property should be assessed as commercial.

Final assessment roll data show that some veterans' clubhouses have been incorrectly classified. These properties include nine clubhouses that should be classified as residential but are assessed as commercial even though they own and occupy the property, and one clubhouse that leases property and is currently classified as residential but should be classified as commercial. To rectify these situations, the individually affected legions will have to file an appeal with the Province to ensure their property classifications are reviewed and corrected. Finance Department staff will be contacting those legions affected regarding the need to appeal. The appeal deadline is very likely to be extended to October 30, 1998 so that for any clubhouse that has not yet appealed, the opportunity to appeal exists.

Property Tax Relief - Former Municipalities:

Three of the six former area municipalities provided tax relief to veterans' clubhouses prior to 1998. Of the 46 clubhouses across the new City, 32 clubhouses or 70 percent received some form of tax relief. The former City of Toronto was the only municipality that provided a significant level of property tax relief, (approximately 74 percent of 1997 total taxes) which included City, Metro and school board taxes. The former cities of York and Etobicoke provided grants to veterans' clubhouses but their grants were limited to the City share of taxes only. The former cities of Scarborough, North York and the Borough of East York did not provide any property tax relief for Veterans' clubhouses.

Appendix 1 summarizes the tax relief provided by the former municipalities to these organizations in 1997. The mechanisms for providing property tax are detailed below:

Former City of Toronto:

Property tax relief for veterans' clubhouses was provided through two mechanisms. Exemptions from general purpose rates only (City and Metro shares - excluding school board share) were made under the provisions of the City of Toronto Act and the Municipal Act for veterans' clubhouses that occupied owned premises. The exemptions were treated as tax cancellations, with the cost shared between the City and Metro through the charge back of tax deficiencies.

Grants were made to offset the school board share of taxes or to offset property taxes for those veterans' clubhouses which occupied leased premises. The amount of the exemptions and grants were provided only for taxes which related to the portion of the property that was actually used as a clubhouse.

Prior to 1992, the tax relief (exemptions and grants) provided to veterans' clubhouses represented 100 percent of the taxes that would have been payable for the clubhouse portion of the property. In 1992, the City began reducing the total tax relief provided to veterans' clubhouses by the same percentage as its annual budget guideline. These reductions, which applied to all outside organizations receiving grants from the City, were applied to the total tax relief received by veterans' clubhouses so by 1997, the tax relief provided represented 74 percent of the total taxes for the clubhouse. Of this tax relief, exemptions accounted for 48 percent ($122,232.00) and grants accounted for 52 percent ($130,900.00).

Each clubhouse had to apply for tax relief, and the grants and exemptions were subject to annual approval by Council.

Former City of York:

The former City of York previously provided grants to veterans' clubhouses to cover the local, Metro and school board portions of realty taxes. However, in 1992 the City of York began to phase out the grants for the Metro and school board portions and by 1997, the grants received by veterans' clubhouses covered only the former city portion of realty taxes, which in 1997 represented 25 percent.

The grants given by York were applied to the tax account of each clubhouse automatically, prior to the mailing of the final tax bill each year.

Former City of Etobicoke:

The City of Etobicoke allocated a total grant amount for veterans' clubhouses in its operating budget. The total grant amount was originally based on the local portion of realty taxes for all veterans' clubhouses. Grants were then allocated proportionately among the clubhouses based on their property assessment. The total grant amount available for veterans' clubhouses was frozen a number of years ago. The grant amount received by veterans' clubhouses in Etobicoke in 1997 totaled 22 percent of total taxes.

Clubhouses in Etobicoke were required to submit grant applications annually. The applications also had to include financial statements, and other information pertaining to membership as well as proposed use and activities of the clubhouse.

Tax Relief for 1998:

The 1998 City of Toronto Operating Budget for grants was determined, at least in part, to retain the status quo so that organizations that received funding or grants from the former municipalities in 1997 would receive the same amount in 1998.

Grants totaling $194,632.00 for veterans' clubhouses have been included in the 1998 Operating Budget, based on the tax relief given to these organizations in 1997 by Toronto ($130,900.00), York ($29,262.00) and Etobicoke ($34,470.00). The amount for tax exemptions previously provided by the former City of Toronto ($122,231.00 in 1997) is not included as a line item in the budget but as part of the tax deficiencies budget.

It is recommended that, for 1998, Council maintain the tax relief previously given to certain veterans' clubhouses at a level consistent with the relief provided by the former municipalities for the following reasons:

(i)Many clubhouses, particularly in the former City of Toronto, are relying on the same level of financial assistance as provided by the former municipalities. Council's decision on this matter is occurring late in the year, which may not leave enough time for these organizations to make alternative fund-raising arrangements;

(ii)Funds have been allocated in the City's 1998 Operating Budget;

(iii)The level of financial assistance is consistent with the City's policy for 1998 to maintain the status quo for outside organizations.

The actual cost of providing the same level of tax relief for 1998 as was provided in 1997 is reduced due to the significant impact of reassessment on many of these properties. As a result, Council should provide tax relief in 1998 based on the percentage of tax relief given, and not actual dollars. In 1997, Toronto provided relief for 74 percent of the taxes levied. Etobicoke provided 22 percent while York provided 25 percent of total taxes levied. In 1998, 36 veterans' clubhouses or 78 percent are receiving a tax decrease. In contrast, 10 properties are receiving tax increases due to CVA. However, Council has capped tax increases for commercial and industrial properties at 2.4 percent for the next three years. As a result, none of these properties will receive a tax increase of greater than 2.4 percent in 1998.

Tax relief provided in 1998 at the same proportion as 1997 would ensure that the organizations receive the same percentage of tax relief but also ensure that the grant does not exceed 1998 total taxes. The net result is that total grants required to provide the same percentage tax relief to these organizations in 1998 are $140,050.00, a savings in grants of $54,582.00. However, as noted above, the amount for tax exemptions provided to veterans' clubhouses in the former City of Toronto was not included as a line item in the budget. In 1998, the recommended exemptions for general purposes will result in $145,539.00 in taxes foregone. Appendix 5 shows the comparison between the proposed 1988 relief and the impact of CVA ultimately. In 1998, $285,589.00 is proposed for relief which compares to a total ultimate CVA of $585,100.00 or $299,511.00 more than the 1998 level of tax relief.

Options for Harmonization of City Policy Regarding Tax Relief for Veterans Clubhouses:

Given the need to ensure that all taxpayers across the new City of Toronto are treated in a like manner, it is necessary for Council to adopt a policy with respect to veterans' clubhouses and legion halls for 1999 and future years. It may be prudent that grants for tax relief be provided only to the extent they are consistent with the City's overall corporate budget policies and guidelines. This would ensure that if Council decided that any grant programs provided by the former municipalities should be retained by the new City, the grants for tax relief for veterans' clubhouses and legions would be treated in a like manner.

The following options provide alternatives for consideration for 1999 and subsequent years:

Option 1:Provide Exemptions for All Clubhouses

Council can exempt veterans' clubhouses from general purposes taxation through the existing provisions of Section 207 of the Municipal Act or Section 3 of the City of Toronto Act, 1930. Under the legislation, exemptions can only be made for the City portion of taxes.

Based on full CVA taxes (i.e., after phase-in/capping) for the veterans' clubhouses, exempting these organizations from City taxes would result in $314,023.00 in taxes foregone annually. For veterans' clubhouses in the residential property class, the exemption would provide tax relief for 63 percent of the total taxes levied on their property. For veterans' clubhouses that lease space and are assessed in the commercial property class, the exemption would provide tax relief for 45 percent of the total taxes levied.

This option would provide a level of tax relief comparable to the amount of relief currently being provided to those clubhouses that received relief in 1997. It would also provide equity for the remaining clubhouses (not currently obtaining relief) in that it would ensure that the city share of taxes would be exempted for all clubhouses in Toronto. However, the City should request the Province of Ontario to exempt the education portion of taxes for the clubhouses. Should this option be adopted, the Province should will be requested to reply by November 15, 1998.

Option 2:Pool Existing Grants

The grants recommended to be provided in 1998 total $140,050.00. In 1999 and subsequent years, Council could maintain this level of funding, but allocate it proportionately among all the veterans' clubhouses across the new City based on each organization's share of property taxes in comparison to the total taxes for the group. The tax relief provided to each clubhouse under this option would amount to 23.9 percent of the total taxes levied.

Options 1 and 2 could be provided in combination, subject to the level of assistance Council decides to provide to these organizations. Combining the exemptions with the existing level of grants would provide veterans' clubhouses with relief for 77.6 percent of the total taxes levied. This combination of options would result in $314,023.00 in taxes foregone due to the exemptions and $140,050.00 in grants, with a total cost to the City of $494,073.00 annually as set out in Appendix 4.

Option 3:Eliminate Tax Relief - Operational grants provided by application to Municipal Grants Review Committee

The City could establish a general policy regarding grants for property taxes within the context of the Municipal Grants Review Committee's development of a Municipal Grants Policy. The former municipalities of Metro and the City of Toronto had adopted such policies where grants were not given solely for the purpose of offsetting property taxes but all financial support for non-profit organizations was provided through established grant programs. Grant eligibility was based on the objectives, criteria and priorities set by the municipality and determined within the context of the applicant's overall financial need and community benefit provided.

The issue of financial assistance for veterans' clubhouses for future years could be referred to the Municipal Grants Review Committee, for a policy to be developed in conjunction with its review of the entire grants program. Under this option, financial assistance to veterans' clubhouses would be reviewed annually during the operating budget process based on Council's priorities, goals and objectives set from time to time.

Option 4:Phase-out Existing Tax Relief

The impact of reassessment is significant for many of the properties owned by veterans' clubhouses and legions. As noted earlier in this report, 36 clubhouses or 78 percent will receive tax decreases while 10, or 22 percent will receive tax increases as a result of reassessment. The average decrease is $11,920.00 or 56.8 percent and the average increase is $13,765.00 or 113.2 percent.

Council could phase-out, over the next four years, the existing tax relief being provided. For the 36 clubhouses receiving tax decreases, the phase-out of the existing tax relief could coincide with the phasing-in of tax decreases due to reassessment. However, the phase-out of the tax relief will exacerbate the financial impact of the reassessment for the 10 clubhouses that are receiving tax increases. Phasing out the existing tax relief would also perpetuate the existing inequities of this program since 32 clubhouses would continue to receive tax relief, albeit at reduced levels, over the next four years, while 12 clubhouses would receive no relief.

Conclusion:

It is recommended that, for 1998, Council maintain the tax relief previously given to certain veterans' clubhouses at a level consistent with the relief provided by the former municipalities. The grants and exemptions to offset 1998 realty taxes for these clubhouses total $285,589.00.

For 1999, 2000 and 2001, it is necessary for Council to adopt a uniform policy with respect to financial assistance for veterans' clubhouses and legion halls. It is recommended that the clubhouses be exempted from general purpose rates (City portion) and that the Province of Ontario be requested to exempt the clubhouses from the education share of taxes; or failing that, provide the City with the authority to cancel the share of school taxes. It is further recommended that the Province be requested to respond by November 15, 1998. A further report will be submitted once a response is received from the Province.

Contact Names:

Lynne Ashton, 397-4203

Paul Wealleans, 397-4208

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Appendix 1

Summary of 1997 Tax Relief - Veterans' Clubhouses

Former Municipality

No. Of Clubhouses

1997

Realty Assessment

1997

Total Taxes

Tax Relief

% Tax Relief to Total Taxes

Exemption

Grant

Total

Toronto

22

$723,479

$343,057

$122,232

$130,900

$253,132

73.79%

North York

4

$129,215

$58,156

$0

$0

$0

0.00%

Scarborough

5

$607,609

$135,117

$0

$0

$0

0.00%

Etobicoke

6

$351,990

$157,188

$0

$34,470

$34,470

21.93%

York

6

$228,650

$114,935

$0

$29,262

$29,262

25.46%

East York

3

$141,545

$68,117

$0

$0

$0

0.00%

Total

46

$2,182,488

$876,570

$122,232

$194,632

$316,864

36.15%





The Strategic Policies and Priorities Committee also had before it the following communications which were circulated to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting of October 1, 1998, and copies thereof are on file in the office of the City Clerk:

-(September 14, 1998) from Mr. Dollack of the Naval Club of Toronto; and

-(September 29, 1998) from Ms. Charlcie Stickley, President, Branch 31, Royal Canadian Legion, Zone D2.

2

Reassessment and Tax Policy Information and

Communications Plan

(City Council on October 1 and 2, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force recommends that the Chair of the Task Force and the Chief Financial Officer and Treasurer be authorized to meet with provincial officials to discuss valuation models, quality control studies and the review of the quality and accuracy of the reassessment in Toronto, and report back to the Task Force on those discussions, at its meeting to be held on October 22, 1998.

The Task Force also requested the Chief Financial Officer and Treasurer to report to the Task Force on the creation of a class of properties to be valued based on value in current use as opposed to current value.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a communication (July 21, 1998) from The Honourable Ernie Eves, Q.C., Minister of Finance respecting Reassessment and Tax Policy Information and Communications Plan, responding as requested by Council, to Clause No. 3 of Strategic Policies and Priorities Committee Report No. 3 titled, "Reassessment And Tax Policy Information And Communications Plan", which was amended and adopted by City Council on March 4, 5 and 6, 1998.

The Task Force's recommendation is noted above.

--------

(Communication dated July21,1998 addressed to

the City Clerk, from the

Honourable Ernie Eves, Q.C., Minister of Finance)

Thank you for your letter about Toronto Council's request for valuation models, quality control studies, and a review of the quality and accuracy of the reassessment in Toronto.

The process of establishing a new current value for each property in Ontario involved planning; data collection and verification; sales verification; stratification and market analysis; valuation; and fine-tuning of the values. It benefitted by modern mass appraisal techniques designed to produce accurate, consistent and fair values as of the June 30, 1996 valuation date.

These values were rigorously tested to ensure equitable treatment between different property types, age groups, sizes, and locational areas. Assessors, with the assistance of property owners, also reviewed the values for fairness in preparation for delivery of the assessment roll on June 15th, and will continue to do so through the reconsideration and appeal periods.

The Property Assessment Division is currently assembling and documenting its valuation models. Although this is an extensive process and will produce a lengthy report, it may be that some part of the report could be used to respond to Council's request. I have asked Ms. Elizabeth Patterson, Assistant Deputy Minister, Property Assessment, to share the information with you.

Detailed sales and property characteristic data will not be included in the report due to concerns about the protection of individual privacy. If a municipality wanted such information, it would have to undertake not to release it to the public on a property specific basis. Alternatively, the ministry could consider providing detailed information without data which identifies specific properties.

Council also asked that the Province undertake an arms-length review of the quality and accuracy of the reassessment in the City of Toronto.

The reassessment involved strict adherence to international quality standards and ongoing process controls, and the work was monitored by both the Property Assessment Division's Appraisal Services Branch and its Quality Control Unit. Following delivery of the assessment roll, the Division commenced a quality audit, and it anticipates that final values will meet or exceed international standards. The report will be available to the public.

You asked that each member of Council receive a copy of the assessment roll on CD. The CD version of the roll is now available and will cost approximately $2,000.00 per copy, with a volume discount. Copies can be obtained by writing to Mr. Ray Bowart, Senior Manager, Production and Client Support Services, Data Services and Development Branch, Property Assessment Division, Ministry of Finance, 33 King Street West, 6th Floor, Oshawa, ON L1H 8H5. Council may wish to consider a more cost effective alternative to a CD, and that is extracting the required data from the year-end tax file which was delivered along with the assessment roll.

Council's final request was for information necessary to determine assessments based on current value in current use. Generally, assessments reflect the current value of a property based on current use. I have attached an explanatory note, entitled "Current Value in Current Use," which I believe addresses this issue.

I appreciate your bringing Council's concerns to my personal attention.

--------

Current Value in Current Use

Key Issue:

In the new province-wide assessment system which bases current value on sales significantly different from valuation in current use?

Considerations:

Under the Ontario Fair Assessment System, assessments generally reflect the current value of a property based on its current use, which is, in almost all cases, also the property's highest and best use.

In rare cases, for less that 1 per cent of properties, the current value of a property reflects a more likely and economically appropriate use. These properties are typically under utilized, and most are being held for imminent redevelopment. These properties are often described as "properties in transition."

Some examples include:

(a)parking lots located on high density downtown lands that are being held until development proceeds on a high-rise office or residential building;

(b) industrial properties with obsolete buildings that are located adjacent to commercial sites recently developed as big box retail outlets (e.g., Home Depot, Costco);

(c)old style one storey motels on major commercial arteries, that are usually redeveloped as modern multi-storey hotels;

The increase in taxes on retail stores along major arteries like the Danforth and Bloor Street West is not the result of valuation based on speculative higher and better uses; these neighbourhoods are not being extensively re-developed and properties are purchased based on the intention of carrying on the existing use. Assessments of these properties are based on their value in current use. Values are rising steeply now because these properties have been significantly undervalued in the past.

Bill 106 enables the municipality, with prior approval of the Minister by regulation, to pass a bylaw creating a class of land to be valued based on current use. For example, residential properties located on commercially zoned land awaiting development could be valued on the basis of continuing residential use.

3

Ontario Property Assessment Corporation

- Recovery of 1998 Costs

(City Council on October 1 and 2, 1998 deferred consideration of this Clause to the next regular meeting of City Council to be held on October 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk, subject to Recommendation (2) therein being amended by deleting the words "and interested Members of Council" and substituting in lieu thereof the words "the Deputy Mayor and the Chair of the Assessment and Tax Policy Task Force", so as to read:

"(2)The Mayor, the Deputy Mayor and the Chair of the Assessment and Tax Policy Task Force, be requested to meet with the Minister of Finance to ensure that the City of Toronto has the number of members on the Board of Ontario Property Assessment Corporation proportional to the percentage of its levy;"

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1)the report (September 15, 1998) from the Chief Financial Officer and Treasurer be adopted;

(2)the Mayor, and interested Members of Council, be requested to meet with the Minister of Finance to ensure that the City of Toronto has the number of members on the Board of Ontario Property Assessment Corporation proportional to the percentage of its levy;

(3)Councillor Chong be appointed an ex-officio member of the Assessment and Tax Policy Task Force; and

(4)Council's position be forward to the Association of Municipalities of Ontario with the request that it endorse the City's position.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a report (September 15, 1998) from the Chief Financial Officer and Treasurer respecting Ontario Property Assessment Corporation - Recovery of 1998 Costs, and recommending that:

(1)The City of Toronto pay the Ontario Property Assessment Corporation (OPAC) the budgeted amount of 24.7 million that was highlighted in the April 1998 Provincial downloading estimates and that the OPAC Board of Directors be advised that the additional $1.2 million requested of the City of Toronto is unacceptable at this time of the year when two thirds of our fiscal year is complete.

(2)The OPAC Board of Directors be advised to continue to pursue funding of the $7 million in extra costs of operation of OPAC with the Province of Ontario and not pass through this cost to municipalities.

(3)The OPAC Board of Directors be advised that the City of Toronto requests that the levy amount for 1999 be set by December 31, 1998 in order to meet City of Toronto budget deadlines.

(4)The OPAC Board of Directors be requested to review the cost of operation of OPAC with a view to reduce costs and not increase future levies at or below the level of inflation particularly for 1999 and 2000.

(5)OPAC be requested to provide detailed cost breakdowns of its expected $130 million total cost of operations; to provide detailed information on the cost of the four Toronto regional offices and to outline the service level standard that accompanies the $25.9 million prior to the due date of the first installment of the 1998 bill; that the 1998 invoices not be paid until the Chief Financial Officer and Treasurer is satisfied with the costs; that interest not be charged by OPAC until November 1, 1998 in light of the lateness of their invoice.

(6)The OPAC Board of Directors, AMO and the Province of Ontario be requested to dedicate 20 percent of the seats on the OPAC Board to be representatives of the City of Toronto, and that City of Toronto staff be requested by OPAC to participate to the fullest extent possible in the development of service level standards for OPAC.

The Task Force's recommendations are noted above.

--------

(Report dated September 15, 1998 , addressed

to the Assessment and Tax Policy Task Force

from the Chief Financial Officer and Treasurer)

Purpose:

To outline the costs billed to the City of Toronto for 1998 property assessment services and support costs and a set of recommendations to deal with the recent billing.

Financial Implications:

Funds in the amount of $24.7 million are budgeted in Corporate Expenditures. Total billing for 1998 will be $25,946,916.00 which exceeds the budgeted amount by $1.2 million.

Recommendations:

It is recommended that:

(1)The City of Toronto pay the Ontario Property Assessment Corporation (OPAC) the budgeted amount of 24.7 million that was highlighted in the April 1998 Provincial downloading estimates and that the OPAC Board of Directors be advised that the additional $1.2 million requested of the City of Toronto is unacceptable at this time of the year when two thirds of our fiscal year is complete.

(2)The OPAC Board of Directors be advised to continue to pursue funding of the $7 million in extra costs of operation of OPAC with the Province of Ontario and not pass through this cost to municipalities.

(3)The OPAC Board of Directors be advised that the City of Toronto requests that the levy amount for 1999 be set by December 31, 1998 in order to meet City of Toronto budget deadlines.

(4)The OPAC Board of Directors be requested to review the cost of operation of OPAC with a view to reduce costs and not increase future levies at or below the level of inflation particularly for 1999 and 2000.

(5)OPAC be requested to provide detailed cost breakdowns of its expected $130 million total cost of operations; to provide detailed information on the cost of the four Toronto regional offices and to outline the service level standard that accompanies the $25.9 million prior to the due date of the first installment of the 1998 bill; that the 1998 invoices not be paid until the Chief Financial Officer & Treasurer is satisfied with the costs; that interest not be charged by OPAC until November 1, 1998 in light of the lateness of their invoice.

(6)The OPAC Board of Directors, AMO and the Province of Ontario be requested to dedicate 20 percent of the seats on the OPAC Board to be representatives of the City of Toronto, and that City of Toronto staff be requested by OPAC to participate to the fullest extent possible in the development of service level standards for OPAC.

Discussion:

(1)Cost of Assessment Services.

As part of the Provincial downloading that was originally announced in October 1997, costs for property assessment services are to be paid by the municipalities of the Province. Original estimates for the City of Toronto in October 1997 were $28.5 million which were subsequently adjusted to $24.7 million in April 1998. This amount of $24.7 million was budgeted in Corporate Expenditures.

On August 28, 1998, the Ontario Property Assessment Corporation sent its first billing to the City. This bill was received on September 9, 1998 and is comprised of two payments of $12,973,458.00 due October 1, 1998 and $12,973,458.00 due December 15, 1998 totalling $25,946,916.00. This amount is $1.2 million higher than was budgeted.

Correspondence from the Transition Leader of the Ontario Property Assessment Corporation (OPAC) (attached) indicates that the estimated cost of operation for OPAC is $130 million which is higher than the $123 million cost of the function which was provided by the Province in its downloading estimates. The Transition Leader states:

"The 1998 billing for assessment services has been set by the Board of Directors of the Ontario Property Assessment Corporation at $130 million. We understand that this amount is, regrettably higher than the $123 million cost of the function which was provided in the 'who does what' discussions. The Board believes, however, based on its knowledge of the function to date and its current understanding of future requirements and the needs of its municipal members, that the $130 million billing level is required immediately for the function to be sustainable into the future."

While OPAC is pursuing increased funding from the Community Reinvestment Fund to recoup the increase in costs of $7 million, it is unacceptable that at this late date in municipalities' fiscal years, that the increased cost be passed in their entirety to municipalities. It is recommended that OPAC be advised that the City of Toronto has only budgeted $24.7 million and is not in a position to pay any additional costs and that the Province of Ontario be requested to pay the increased costs. Failing the Province paying the increased costs, it is recommended that the Board of Directors of OPAC be advised to seek cost efficiencies to meet their original $123 million budgeted costs.

It is also requested that OPAC advise each municipality of its cost share of 1999 assessment services by December 31, 1998 in order to meet deadlines for preparing municipal budgets.

The OPAC Board is anticipating that increases in future years' levies should be at or below the level of inflation. At a time when municipal budgets have been frozen, the OPAC Board should be strongly urged to freeze costs of OPAC at 1998 levels of $123 million for 1999 and 2000 and in fact be directed to find cost efficiencies and strive to reduce costs of operation.

(2)Basis of Costs Allocation.

As noted, OPAC is budgeting $130 million as its cost of operation for 1998. The City of Toronto share is billed at $25.9 million. This represents 20 percent of the cost of OPAC's operation. The billing formula for OPAC is comprised of two components (a) Toronto's share of total assessed values (25.36 percent) averaged with (b) Toronto's share of total properties (14.56 percent).

The supporting information for the calculation of 1998 property assessment services and support costs is deficient in several respects;

(i)There is no breakdown of what comprises the $130 million total cost of operations

(ii)There is no breakdown of the cost of assessment services currently provided to the City of Toronto through its 4 existing regional offices.

(iii)There is no description of the service levels and quality of service to be provided for the $25.9 million billed amount.

The billing received from OPAC should not be paid until the above supplementary information is received and reviewed to the satisfaction of the Chief of Financial Officer & Treasurer.

According to the OPAC Board, the Province has already allocated $33 million towards defending the 1998 appeals. The Board, believing that the allocation of $33 million for appeals is inadequate, has raised concerns with the Province.

(3)Membership in OPAC

The Province announced the creation of a municipal corporation for assessment services in their 1996 budget. The Ontario Property Assessment Corporation (OPAC) was created under Bill 164, the Tax Credits to Create Jobs Act, which received Royal Assent on December 18, 1997. All municipalities in Ontario are members of OPAC which is a municipal corporation responsible for assessment services delivery starting on January 1, 1998.

OPAC, funded by the municipalities on a cost recovery basis, is governed by a fourteen-member board who are appointed by the Minister of Finance. The Board is comprised of twelve municipal representatives (six of whom are elected municipal officials and six municipal employees) and two provincial representatives.

Currently the OPAC Board of Directors is comprised as follows:

Name

Title, Municipality or Organization Term
Municipal Representatives

Jean Jones Clerk-Treasurer and Tax Collector

Townships of Carden and Dalton, Victoria County

One-year
Jerry Labossiere Treasurer

Town of Jaffray Melick, District

One-year
Jack MacDonald Deputy Reeve

Township of Somerville, Victoria County

One-year
Pat Richardson Mayor

Town of Marathon, District of Thunder Bay

One-year
Lucille Bish Manager, Planning Information

Regional Municipality of Waterloo

Two-year
John Geoghegan Mayor of Woodstock and Councillor

Oxford County

Two-year
Gordon Landon Regional Councillor

Regional Municipality of York

Two-year
Brian MacRae City Manager

City of Thunder Bay

Two-year
Bonnie Gibson Assessment Review Manager

City of Mississauga

Three-year
Emil Kolb

(Chair)

Regional Chair

Regional Municipality of Peel

Three-year
Chuck Wills Chief Administrative Officer

City of Windsor

Three-year
Peter Hume Regional Councillor

Regional Municipality of Ottawa-Carleton

Three-year
Provincial Representatives
Gordon Chong Councillor

City of Toronto

Two-year
Bryan Davies Senior Vice President, Corporate Affairs

Royal Bank of Canada

Three-year

As noted the City of Toronto has 25 percent of the total assessed values in the Province of Ontario and 15percent of the total number of properties and is therefore paying 20 percent of the cost of OPAC. It follows that the City of Toronto should have representation on the Board equal to its proportionate cost share. The City of Toronto should have a say for what it is expected to pay particularly given the significance and complexity of the City of Toronto assessment base. Based on a 20 percent share of costs, the City of Toronto should have three seats on a fourteen person board. Currently, the City is represented by Councillor Chong who is sitting on the Board as one of the two Provincial representatives. It would be fair for the City to request that at least an additional City of Toronto representative be added to the Board and that two City of Toronto representatives are always sitting on the Board.

Conclusion:

The City of Toronto has just received its 1998 billing from the newly established Ontario Property Assessment Corporation (OPAC). The invoice amount exceeds the amount budgeted by $1.2 million and does not provide sufficient information to support a $25.9 million payment. The City of Toronto will be paying 20 percent of the cost of OPAC and should have equivalent representation on the OPAC Board.

Contacts:

Giuliana Carbone, Director of Revenue Services:392-8065

4

Owner-Occupied Condominiums

(City Council on October 1 and 2, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force recommends that the administrative process set out in the report (September 12, 1998) from the Chief Financial Officer and Treasurer be approved.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a report (September 12, 1998) from the Chief Financial Officer and Treasurer respecting Owner-Occupied Condominiums, and recommending that the report be received for information.

During consideration of the foregoing matter, the Task Force also had before it the following communications:

-(September 1, 1998) from Councillor Rae, requesting the Chief Financial Officer and Treasurer to prepare a report for the next meeting of the Assessment and Tax Policy Task Force outlining the problems raised re owner-occupied condominiums and steps to be taken to resolve them;

-(August 25, 1998) from Andre Bratu, requesting that Toronto City Council and the Province work towards rectifying the increase in property tax for his condominium; and

-(September 23, 1998) from Councillor Silva, addressed to the Chief Financial Officer and Treasurer

The Task Force's recommendation is noted above.

--------

(Report dated September 21, 1998, addressed

to the Assessment and Tax Policy Task Force

from the Chief Financial Officer and Treasurer)

Purpose:

This report provides additional information regarding the impact of Current Value Assessment and the City`s phase-in program on newly owner-occupied condominiums.

Financial Implications:

It is estimated that 2,400 of these condos became owner-occupied in 1997 and therefore, should be adjusted in 1998 to be consistent with the former administrative practices of the Regional Assessment Office. The total cost of these adjustments is estimated at $4.288 million for 1998.

Recommendation:

It is recommended that this report be received for information.

Comments:

Prior to 1998, tenanted condominiums were assessed at two or three times the level of owner occupied condominiums and included in the multi-residential property class while owner-occupied condominiums were assessed in the residential class. When a tenanted condominium was sold, and the new owner subsequently moved in, it was the Province_s policy to reclassify the condominium to the residential property class and reduce the assessment to the owner-occupied assessment level for taxation in the following year.

From the 1998 Interim Assessment Tape, it has been determined that 4,166 condominiums were assessed as tenanted and included in the multi-residential property class in 1997. Appendix 1 shows the number of these condominiums by ward. The total tax decrease for these condominiums is $7.917 million. Of this amount, it is estimated that $7.066 million of the decreases relate to the change in property class, while $850,666.00 relates to changes in property values. It has been determined that 2,400 condominiums became owner-occupied in 1997 and should be adjusted in 1998 to remain consistent with the former administrative practices of the Regional Assessment Offices. The total cost of these adjustments is estimated at $4.288 million. For the remaining 1,766 condos that have become owner-occupied in 1998, the adjustment of $2.78 million should be processed in 1999.

Under Current Value Assessment, all condominiums are in the residential class. This has resulted in substantial tax reductions in 1998 for condominiums that were assessed as tenanted in 1997, due mainly to the change in property class. However, a number of these condominiums were purchased and became occupied by their new owners in 1997. In some of these cases, the Province did not reduce the assessments of these condominiums to the owner-occupied level on the 1998 Interim Assessment Tape. Since Council adopted a phase-in plan for the residential property class and the data on the 1998 Interim Assessment Tape formed the basis of any phase-in amount, some condominium owners are having their reductions due to the change in property class being phased-in in conjunction with any tax change due to Current Value Assessment.

The phase-in data supplied by the Province, which set out for each property the old, or prephase in, assessment and the Current Value Assessment, was used by the City to calculate its final tax bills and determine the 1998 phase-in amounts. Ministry of Finance staff have advised that there is no legislative mechanism by which the prephase-in assessments of these condominiums can be changed to reflect a change in occupancy. However, if there had been no reassessment in 1998, condos that became owner-occupied in 1997 would have had their assessments reduced by the Regional Assessment Office on the year-end assessment roll. These changes were administrative in nature and were done annually at year-end without the owner having to file an assessment appeal. While this administrative procedure did not reflect in-year changes, condominium owners benefitted from the reduced assessment in the year following occupancy.

The Deputy Minister of Finance has been contacted, in writing, to request that these changes to the phase-in file be made annually by the City based on the values forwarded by the Toronto Regional Assessment Offices, consistent with the administrative practices previously used by the Province_s Regional Assessment Offices prior to the reassessment. The Regional Assessment Offices in Toronto have advised that they can provide the 1997 values that would have applied if these occupancy changes had been reflected. The Deputy Minister's reply has been requested by the end of September.

In the interim and in the interest of fairness, the Finance Department will be contacting each of the 2,400 condominium owners that took occupancy in 1997 over the next two months to inform them that they will likely have their taxes adjusted for 1998. Staff at the area tax offices were instructed to advise any condominium owner who took occupancy of a previously tenanted unit in 1997 that payment of the September and October instalments would not be required. Once the revised assessments are received from the Regional Assessment Offices, we will process the appropriate adjustments. It is anticipated that any necessary adjustments will be processed before the November 2nd instalment date. As noted above, it is estimated that 2,400 of these condominiums became owner-occupied in 1997 and therefore, should be adjusted in 1998 to be consistent with the former administrative practices of the Regional Assessment Offices. The total cost of these adjustments is estimated at $4.288 million for 1998. These adjustments will continue annually for the duration of the phase-in period. However, based on the final assessment roll data, it appears that the bulk of the adjustments will be made in 1998.

The 1,766 of the condominiums that became owner-occupied in 1998 will have their taxes adjusted starting in 1999 with an estimated total adjustment of $2.78 million.

The administrative process described in this report relates only to the tax decreases resulting from the change in property class. Residual increases or decreases due to changes in property values would still be phased-in under Council's phase-in plan for the residential property class.

Contact Names:

Lynne Ashton, 397-4203

Paul Wealleans, 397-4208

--------

Appendix 1

Condominiums Assessed as Tenanted in 1997

Ward

# of

Assessment

Portions

1997 Taxes

1998 Taxes

Assessment-Related Tax Difference

Estimated Decrease Due to Change in Property Class

Estimated Change Due to Property Value

Total

1

16

$37,073

$23,272

($18,537)

$4,736

($13,801)

2

3

$7,903

$4,521

($3,951)

$569

($3,382)

3

0

$0

$0

$0

$0

$0

4

0

$0

$0

$0

$0

$0

5

964

$3,725,005

$1,196,106

($1,862,502)

($666,397)

($2,528,899)

6

0

$0

$0

$0

$0

$0

7

1

$884

$805

($442)

$363

($79)

8

0

$0

$0

$0

$0

$0

9

0

$0

$0

$0

$0

$0

10

0

$0

$0

$0

$0

$0

11

0

$0

$0

$0

$0

$0

12

0

$0

$0

$0

$0

$0

13

106

$236,617

$144,626

($118,308)

$26,317

($91,991)

14

169

$442,994

$173,013

($221,497)

($48,484)

($269,981)

15

2

$5,094

$2,799

($2,547)

$252

($2,295)

16

138

$334,573

$200,311

($167,286)

$33,024

($134,262)

17

165

$483,616

$321,255

($241,809)

$79,448

($162,361)

18

924

$2,700,904

$1,137,077

($1,350,452)

($213,375)

($1,563,827)

19

208

$530,634

$244,589

($265,317)

($20,728)

($286,045)

20

122

$427,833

$186,910

($213,916)

($27,007)

($240,923)

21

33

$55,584

$40,662

($27,792)

$12,870

($14,922)

22

229

$666,165

$482,168

($333,082)

$149,085

($183,997)

23

96

$392,637

$289,635

($196,318)

$93,316

($103,002)

24

983

$4,057,083

$1,752,017

($2,028,541)

($276,525)

($2,305,066)

25

7

$28,561

$16,151

($14,280)

$1,870

($12,410)

26

0

$0

$0

$0

$0

$0

27

0

$0

$0

$0

$0

$0

28

0

$0

$0

$0

$0

$0

Total

4,166

$14,133,160

$6,215,917

($7,066,577)

($850,666)

($7,917,243)

Notes:

(1)Decreases due to change in property class estimated based on average assessment level for tenanted condominiums being twice that of comparable owner-occupied units.

(2)Tax changes (exclusive of decreases due to change in property class) would continue to be phased-in under Council's phase-in program for the residential property class.

(Communication dated September 1, 1998 addressed

to the Chief Financial Officer and Treasurer from Councillor Rae)

It has recently been brought to my attention that we have a gross inequity in the way that some of our condominiums are being assessed and taxed.

People living in units that are currently assessed as "owner-occupied" but which were previously assessed as "income units" are being over-taxed as a result of the phase-in of tax decreases. The huge decreases in their taxes are not being reflected due to the five-year phase-in.

I understand that your staff have met with officials from the Provincial Ministry of Finance to try and rectify this inequity.

I would be very appreciative if you would prepare a report for the next meeting of the Taxation and Assessment Task Force outlining the problems that have been raised, the steps that are being taken, and what further steps we will have to take in order to resolve this problem.

I have heard from a great number of very concerned constituents about this tax inequality. We must find a fair way to assess and tax our residents whose assessment class has shifted during the implementation period of Current Value Assessment.

--------

The Strategic Policies and Priorities Committee also had before it the following communications which were circulated to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting of October 1, 1998, and copies thereof are on file in the office of the City Clerk.:

-(August 25, 1998) from Andre Bratu; and

-(September 23, 1998) from Councillor Silva.

5

Extension of Property Assessment Appeal Deadline

(City Council on October 1 and 2, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force recommends that Council request all parties in the Ontario legislature to ensure that amending legislation to extend the property assessment appeal deadline to October 30, 1998 is supported in the house and approved without delay.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a communication (August 28, 1998) from Association of Municipalities of Ontario forwarding notice seeking the support of the Opposition Parties to ensure that amending legislation to extend the property assessment appeal deadline would be supported in the house and approved without delay.

The Task Force's recommendation is noted above.

(A copy of the communication dated August 28, 1998, from the Association of Municipalities of Ontario, referred to in the foregoing communication was circulated to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting of October 1, 1998, and a copy thereof is on file in the office of the City Clerk.)

6

Capping of Business and Realty Taxes for BIAs

(City Council on October 1 and 2, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (September 30, 1998) from the City Clerk:

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1)the provincial government be requested to amend legislation in order that individual BIAs may create their own tax policies on BIA levies, at the individual discretion of each BIA; and

(2)TABIA be advised of the City's request to the provincial government, in order that it may inform its members.

Background:

The Assessment and Tax Policy Task Force, on September 29, 1998, had before it a report (September 22, 1998) from the Chief Financial Officer and Treasurer respecting Capping of Business and Realty Taxes for BIAs, and recommending that this report be received for information.

During consideration of the foregoing matter, the Task Force also had before it the following communications:

-(September 11, 1998) from Mr. Norman Bergstein, President, Yonge-Bloor-Bay Association Inc., addressed to the Minister of Finance, requesting the Minister of Finance to place a cap on the BIA assessment as part of the legislation extending the time for appeal; and.

-(September 14, 1998) from Mr. I.R. Wookey, President, Seniority Investments Limited, addressed to the Minister of Finance. requesting the Minister of Finance to consider a cap on business and realty taxes for BIAs, at the same time as the introduction of legislation for the extension of the appeal period.

The Task Force's recommendations are noted above.

--------

(Report dated September 22, 1998, addressed

to the Assessment and Tax Policy Task Force

from the Chief Financial Officer and Treasurer)

Purpose:

To provide information regarding capping of Business Improvement Area (BIA) levies in response to a letter from Mr. I.R. Wookey, President, Seniority Investments Limited to the Minister of Finance requesting that BIA levies be subject to the cap on tax increases on commercial/industrial properties.

Recommendation:

It is recommended that this report be received for information.

Comments:

Prior to 1998, BIA levies were billed to business tenants. With the elimination of the business occupancy tax, BIA levies have become the responsibility of property owners. The BIA program is governed by provincial legislation, is administered by the municipality but is funded and carried out by the members of each BIA.

Council of the City of Toronto adopted a plan whereby assessment related tax increases for 1998 for commercial and industrial properties be capped at 2.4 percent over their 1997 total taxes (realty taxes plus business occupancy taxes). Provincial legislation that provides municipalities with the authority to cap tax increases due to reassessment, excludes BIA levies as eligible for the cap. Sections 447 (14) and (15) of the Municipal Act includes a provision for the determination taxes and that can be capped and include only taxes for "municipal and school purposes". BIA levies are a special charge for the purposes of the BIA, and, therefore, not subject to the cap.

The Board of Management of the BIAs vote on their own budgets and spending. Therefore, it is within their control to decide whether to maintain the spending at consistent levels from one year to the next. In 1998, majority of the areas have maintained their budgets at 1997 levels with very few areas having increases.

Given the shift in assessment due to CVA, it may be that shifts of BIA levies also occur as the levy is based on property assessment. For example, the decrease in office values with in increased offset to retail may impact those retailers with higher BIA levies. A cap on BIA levies, would reduce the amount of funds available to the BIA for its approved budget unless funding was obtained from another source.

Without a change in provincial legislation, current BIA levies are not subject to the cap. Should the Province review the capping provisions for BIAs, funding requirements would also need to be reviewed to ensure full approved budgets are available to BIAs.

--------

The Strategic Policies and Priorities Committee also had before it the following communications which were circulated to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting of October 1, 1998, and copies thereof are on file in the office of the City Clerk:

-(September 11, 1998) from Mr. Norman Bergstein, President, Yonge-Bloor-Bay Association Inc., addressed to the Minister of Finance, requesting the Minister of Finance to place a cap on the BIA assessment as part of the legislation extending the time for appeal; and.

-(September 14, 1998) from Mr. I.R. Wookey, President, Seniority Investments Limited, addressed to the Minister of Finance. requesting the Minister of Finance to consider a cap on business and realty taxes for BIAs, at the same time as the introduction of legislation for the extension of the appeal period.

(City Council on October 1 and 2, 1998, had before it, during consideration of the foregoing Clause, a copy of a communication (September 29, 1998) from the General Manager, The Bloor-Yorkville Business Improvement Area, addressed to Councillor John Adams, in support of capping the BIA levies as part of the legislation extending the time for appeal.)

7

Staff Lay-offs in Works and Emergency Services

(City Council on October 1 and 2, 1998 deferred consideration of this Clause to the next regular meeting of City Council to be held on October 28, 1998.)

The Strategic Policies and Priorities Committee reports having requested the Chief Administrative Officer to report directly to Council for its meeting on October 1, 1998 on the matter of pending lay-offs of employees in Water and Sewage Plants and advise of the status of such.

(City Council on October 1 and 2, 1998, had before it, during consideration of the foregoing Clause, the following report (October 1, 1998) from the Commissioner, Works and Emergency Services:

Purpose:

With reference to the request from the Strategic Policies and Priorities Committee to report directly to Council for its meeting on October 1, 1998, on the matter of pending lay-offs of employees in Water and Sewage Plants.

Funding Sources, Financial Implications and Impact Statement:

There are no financial implications arising from this report.

Recommendation:

It is recommended that this report be received for information.

Comments:

The Water and Wastewater Services Division does not plan any lay-offs in 1998.

The misunderstanding may have occurred in two areas:

(a)the Industrial Mechanic Millwright Program; and

(b)the transfer of staff under the Works Best Practices Program.

(a)Industrial Mechanic Millwright Program:

-The Millwright Program started before Best Practices where we retrain staff to become Industrial Mechanic Millwrights.

-Graduating Millwrights will be placed in permanent positions in the Department where some are held by temporary staff at the present time, in accordance with the agreement between Local 43 and Metro Management (Appendix "A" attached).

-Temporary employees hired from outside (some have been hired as temporary staff for up to four years) could be laid off as new graduates are placed. Temporary staff become union members after six months and are eligible for seniority protection in the event of any lay-offs.

-Currently we are placing 4 new Millwrights from the apprenticeship program and 17 from our Skills Enhancement Program. There will not be any lay-offs as a result of this program, this year.

(b)Reassigning Staff under Works Best Practices:

-Within the WBP program we identified the need to retrain and cross-train existing staff within the plants.

-The new program was started at the Highland Creek Treatment Plant and some temporary assignments made.

-The continuation of the program has been on hold for four months, waiting for the Local 416 to see if a protocol could be reached for the unions' involvement.

-The report at Budget Committee, Strategic Policies and Priorities Committee and now Council indicates we are unable to agree on a process for their involvement as we cannot agree to a "no layoff clause".

-As a continuation of the WBPP at Highland Creek we plan to reassign staff from the Highland Creek Sewage Treatment Plant to the Main Sewage Treatment Plant commencing October7, 1998.

-The General Manager and Director of Water Pollution Control met with staff at the Highland Creek Sewage Treatment Plant on September 21, 1998, to advise them of the pending reassignments.

-Written communication to the union and staff is underway (copy attached Appendix "B").

Contact Name:

Mr. Michael A. Price, P.Eng., FICE, General Manager, Water and Wastewater Services

Telephone (416) 392-8200, Fax (416) 392-4540, E-Mail mprice@city.toronto.on.ca.)

(A copy of the Appendices, referred to in the foregoing report, is on file in the office of the City Clerk.)

8

Other Item Considered by the Committee

(City Council on October 1 and 2, 1998, received this Clause, for information.)

(a)Transfer Plan for Child Care Services and Adjustments to Child Care Support for Ontario Works

The Strategic Policies and Priorites Committee reports having forwarded to Council for consideration at its meeting on October 1, 1998 with Clause 21 of Report No. 18 of the Strategic Policies and Priorities Committee, the report (September 30, 1998) from the Commissioner of Community and Neighbourhoods Services and the communication (September 29, 1998) from Marilyn Renwick, Area Manager, Ministry of Community and Social Services appended thereto. The aforementioned report from the Commissioner advises that the Ontario Ministry of Community and Social Services, in its appended communication has confirmed that the annualized expansion funding of $3,147,500.00 from the Province for Ontario Works child care may be used in 1998 to manage current City child care pressures but by 1999 must be used to provide an expanded level of service, and further advises that this clarification from the Province negates the need to defer consideration of the recommendations of the Community and Neighbourhoods Services Committee emanating from its meeting on September 10, 1998.

Respectfully submitted,

MEL LASTMAN,

Chair

Toronto, October 1, 1998

(Report No. 19 of The Strategic Policies and Priorities Committee, including additions thereto, was adopted, as amended, by City Council on October 1 and 2, 1998.)

 

   
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