1. RECOMMENDATION: City \{ide: X Ward(s):

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1 THE CORPORATION OF THE CITY OF WINDSOR Office of the City Treasurer - Finance Item No. 4 MISSION STAT:EMENî: "Our Cìly is built on relatiofishíps - behrcen cil tens and lheir govemmenl, bus nesses and public nslilul ons, city and region - all inlerconnected, mulually supporlhre, and focused on lhe brighlest lulure we can creale LiveLinkREPORT#: AF20l5 Report Date: August 31, 2015 Author's Name: Jamie Paproski Date to Council: September 21, 2015 Author's Phone: ext Classification #: Author's jpaproski@cifywindsor.ca To: Mayor and Members of City Council Subject: Relief from Property Taxation Extreme Sickness and/or Poverty 1. RECOMMENDATION: City \{ide: X Ward(s): THAT City Council ACCEPT Administration's recommendation with regards -to approval of 16 applications for total tax relief of $24, ; a d THAT City Council SUPPORT Administration's recommendation with regards to the denial of 26 applications for tax relief. N/A EXECUTIVE SUMMARY: 2. BACKGROUND: Property taxation provides municþalities with the necessary revenue required to fund annual operating and capital expenditures. The administration of property taxes is govemed through Pa ts VIII (municipal taxation) tbrough to Part XI (sale of land for tax arrears) under the Ontario Municipal Act, Once property taxes are levied, there is the expectation that property owners will remit payments when due. There is limited availability for municipalities to provide tax reliefto pfpperty owners namely: Section 319: Tax deferrals, Relief of Financial Hardshþ which provides for a full or partial tax deferral on increases in propefy taxes as a result ofincreases in property assessment valuation for 1998 and subsequent years. To qualify, an eligible property must be included in the residential property class and the assessed owner (or spouse) must be a low income senior or low income person \ /ith disabilities 1of6

2 Section 357: Cancellation, reduction or refund of property taxes in the year following the year in respect of which the application is made to the City Treaswe. This section requires Council's approval on an annual basis for tax relief to property owners as a result of occurrences such as building demolitions, destruction ofproperty caused by fire, changes to property tax class a d/or the inabilify to pav taxes because of sickness or extreme Dovertv. Section 365: Cancellation, Reduction or Refund of Ta.tes which provides for tax relief on eligible properties where the taxes a e considered to be unduly burdensome. Eligible properties are those that are within the residential, farm or managed forest classihcations as determined by MPAC. After a thorough review and public consultation process in 2010 Council approved the guidelines for the tax relief program under Section 357 (1) (d.1) ofthe Municipal Act to provide assistance to residential property owners who are unable to pay taxes because of sickness or extreme poverty (CR 356/2010 Appendix A). The guidelines were further refined in 2011 after the results of the f,rrst piiot year was reported on (EC 31/2011). Tax reiief under section 357(1) (d.1) provides assistance to those identified as most in need based upon best practices and community consultation. 3. DISGUSSION: This is the fifth year for which this program was offered to residents. As stated above, a reduction or refund ofproperty taxes can be provided for in the year following the year in respect of which the application is made to the City Treasurer. In other words, the applications being brought forward to council are in regards to requests for relief from 2014 properly taxes. A total of 41 applications were received. Applications and supporting documentation a e first thoroughly reviewed by Finance Administ ation in accordance with established criteria. Initial recommendations for 16 approv als and 26 denials are made based on results of the review and information submitted. Applicants were notifled of Finance Administration's recommendation. Those applications recommended for denial are then afforded the opportunity to submit a request to the Próperty Tax Relief Internal Review Panel (PTRIRP), an intemal review panel comprised of staff from the Social and Health Services Department, for a second review and independent recommendation. one appeal was folwaxded to the PTRIRP, and the decision to uphold the denial was supported. It should be noted that Council must make that fina.1 decision in regards to these applications Should applicants not be satisfred by recommendations of Administration or the PTRIRP they have a right to appeal to City Council for further consideration in conjunction with this report Should City Council uphold the denial an appeal to the Assessment Review Board (ARB) can be made by the property owner. 2 o16

3 4. RISK ANALYSIS: Applications for tax relief due to sickness and/or extreme poverty are allowed under Section 357 of the Ontario Municipal Act and therefore municipalities must have a mechanism in place to address these tlpes of requests. The program cunently offered by the City is specifically designed to provide temporary relief (maximum two years) to those property owners who qualifu based upon the approved criteria. The program is voluntary however once application has been made, the required documents to support the application must be submitted for review or the application will be noted as incomplete. Aside from the hnancial impact there is very little risk associated with this program as applications are screened by Administration and supporting documentation is required prior to receiving approval; Applicants who are denied tax relief are allowed to make an appeal to the ARB. As an altemative, City Council may delegate their authority for the administration of this program directly to the ARB where final decision wiil be made. By doing so, resources currently dedicated to the receipt, review and recommendation of each individual application could be redirected to other departmental priorities. The risk however is that the ARB decision, which is made Òn a case by case basis, may result in more applications being approved than otherwise under the Administrative program. 5. FINANCIAL MATTERS: The results of the 2015 program have been summarized in the chart below' Sixteen (16) applicants are being recommended for approval. Of those 16, 10 have been approved for tax relief in a prior year, making this their second and final year oftax relief under this program. Due to privacy concems only general reasons for denial have been stated. Additional information has been provided by way of confrdential memo. Results of the 2015 Tax ReliefProgram (for 2014 Taxation Year): Total Recommended for Approval 16 Total Recommended for Denial 26 s24,311. Educølion Share Has qlreqdy received lqx relieffor two yeqrs 4 Based upon Administration's recommendation, total tax relief of 524,31'1.13 will be gralted. The municipal portion is $21, The education portion of$2, will be ecorded as a charge back to the Province. As the tax relief relates to taxes levied in 2014, $50,000 was accrued as parl of the 2014 year-end allowance for doubtful accounts as a direct charge to the 3 of 6

4 property tax write-off provision so there will be no impact on the current year operating budget. The difference between the allowance and the actual charge of$25, will be used to offset other tax related property tax adjustments which are approved during the year as the write-off provision is not specifically allocated by type of adjustment. 6. CONSULTATIONS: Properly Tax Relief Internal Review Panel (PTRIRP) - Emplo 'rnent and Social Services 7. CONGLUSION: The property tax relief program's main objective continues to be a means of giving taxpayers temporary fina cial assistance for the established maximum period of two years, (consecutive or otherwise) during which they can consider their situation and make changes accordingly. Application is voluntary and approval is subject to meeting the conditions of the program eligibility. Based upon the number of applications received and recommended for approval, this program, while resource intensive, reaches a small segment of ratepayers most in need, and is therefore a much needed program within our community. Over the course of the five years in which the program has been available, approximately 105 residents have received either firll or partial tax relief. l-ømìefanroski Tffinancial Analyst - OI Chief Financial Officer/City Treasurer and / '/ Corporate Leader X'inance and Technology (/ Deputy Treasurer - Taxation and Financial Projects APPENDICES: Àppendix A - Tax Relief under Section 357 (1) (d.1 CR 356/2010 as amended by EC 3ll20ll Guidelines for the provision of DEPARTMENTS/OTHERS CONSULTED: 4of6

5 Name: Phone #: 519 ext. NOTIF'ICATION: Name,A.ddress Address TeleDhone FAX 5 of6

6 Guidelines for the Provision of Tax Relief under Section 357 (1) (d.1) Àppendix A Per CR 356/2010 as Amended by EC 31/2011 TIIAT City Council ADOPT the following guidelines for the provision of tax relief for residential property owners on a pilot basis of one (1) year under Section 357(l)(d.1) of the Ontario Municipal Ac! 2001: Extreme Sickness. Completion of a physicians statement (at the applicant's cost) to veri$r illness and impact on quality oflife o Completion ofa financial disclosure statement which includes family income, savings and assets. Ta-x reliefwould be approved if o The illness has resulted in the primary income eamer of the family being confined to a hospital, bed or house for a period of time which exceeds 90 consecutive days or the illness has resulted in the primary income earner being required to leave their primary place of employment as a result of a spouse or child being confined to a hospital, bed or house for a period of time which exceeds 90 consecutive days and o The applicant fell within the criteria established for extreme poveúy. Tax reliefwould be pro-rated based upon the number of months certified by the physician.. Applications would be accepted for 4 period not to exceed two consecutive years Extreme Povertv. Completion ofa financial disclosure statement which includes family income, savings and assets o Full tax reliefwould be approved if o Income levels for the family unit are at or below that which has been determined as lowincome cut offs for purposes of social assistance o Liquid and non-registeied financial savings/assets of the family unit at December 3l't of the tax year are equal to or below the amount of the properly taxes o Property assessment value is equal to or less than $150,000. Partial tax reliefwould be approved if o Income levels for the family unit exceed that which has been determined as low-income cut offs for purposes of social assistance. That is, income above the threshold would be deducted first from the propeúy taxes payable. The balance of taxes, if any, would be considered for tax relief putposes. o Liquid and non-registered financial savings/assets of the family unit at December 31"tof the tax year are above the amount ofthe property taxes. That is, savings/assets above the threshold would be deducted first from the property taxes payable. The balance oftaxes, if any, would be considered for tax relief purposes. o Property assessment value is greater than $150,000. That is, the assessed value above the threshold would be deducted first from the propeúy taxes payable. The balance oftaxes, if any, would be considered for tax reliefpurposes.. Family unit for purposes of detemining family income is defined as all registered owners, spouses and any occupants 18 years of age or older. Children below the age of l8 in full time attendance at a qualifuing educational institution are excluded. o Ontario Property Tax grants are included in determining tax relief. That is, grants received as a result of claiming the property taxes as a personal ta"r deduction is deducted from tax relief provided under the program Applications would be accepted for a period not to exceed two years (consecutive or otherwise) 6 of6