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HomeMy WebLinkAboutFIN-2024-190 - Delegated Authority for Property Tax Adjustments Financial Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: April 29, 2024 SUBMITTED BY: Saleh, Saleh, Director of Revenue, 519-741-2200 ext. 7346 PREPARED BY: Yang, Shanna, Revenue Analyst, 519-741-2200 ext. 7954 WARD(S) INVOLVED: All DATE OF REPORT: March 27, 2024 REPORT NO.: FIN-2024-190 SUBJECT: Delegated Authority for Property Tax Adjustments RECOMMENDATION: That the BY-LAW attached to Report Fin-2024-190 to delegate authority to adjust property taxes pursuant to Sections 354, 357, 358 and 359 of the Municipal Act, 2001, S.O. 2001, c.25, to staff, be approved and presented to Council for enactment. REPORT HIGHLIGHTS: The purpose of this report is to request council approval to delegate authority to adjust property taxes under Sections 354, 357, 358 and 359 of the Municipal Act, 2001, S.O. 2001, to staff as indicated, subject to any procedural requirements which apply to the provision; said delegation is for improved efficiency and service delivery. Applicants must currently wait until a council hearing to receive their property tax adjustments. Historically, applications have been processed with no changes to staff recommendations by Council as the process is legislated with very clear guidelines on adjustments allowed under the Act. Approval of the by-law will still allow applicants an opportunity to appeal staff decisions to the Assessment Review Board. Staff have completed a municipal scan and the recommendation is consistent with other municipalities. There are no financial implications of this report. This report supports the delivery of core services. BACKGROUND: Sections 354, 357, 358 and 359 of the Act gives local municipalities the authority to write off, cancel, reduce or refund all or part of taxes levied on land, subject to any procedural requirements which apply to the provision, in the year where applications are made for reasons as laid out in these sections of the Act. The reasons for adjustments are varied, examples include *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. changes to property such as demolition or fire and overassessment due to gross or manifest clerical errors. Currently, staff submit reports with recommendations for adjustments under these sections 2 - 3 times a year to council for approval. These reports include a list of applications made, reasons for any declined applications, amount of property tax adjustment required, and a reference to the part of the Act an adjustment is allowed under. The amount of property tax adjustment is calculated by staff based on tax rate for the year an application relates to and the change in property assessment provided by MPAC. A notice of council hearing is provided by staff to applicants at least 14 days prior as per legislation. The notice also indicates if staff are recommending approving or declining the application along with information for the owner on how to contact staff if they have any questions or concerns. As the council reports are brought forward 2-3 times a year, staff have received a few complaints from applicants about the length of time it takes to process applications and property tax refunds. The recommendation included in this report will allow staff to process applications quickly and more efficiently while continuing to adhere to the relevant legislation. REPORT: This report seeks Council approval to delegate its authority to adjust property taxes under Sections 354, 357, 358 and 359 of the Act to staff, subject to any procedural requirements which apply to the provision, by enacting the by-law attached to Report FIN -2024-190. The recommendation to delegate supports enhanced timeliness of service delivery as taxpayers applying for the adjustments will no longer have to wait until one of the scheduled council hearings to receive their adjustment. In support of delegation, it should be noted that current council involvement in this process is already minimal and generally serves as the final approval step for staff recommendations. Over the past few years, Council has not made any adjustments to the staff recommendations. Staff must follow legislated criteria to determine which applications are allowed under the Act and calculation for any adjustments required are based on assessment changes provided by MPAC. Staff decisions are not arbitrary and there is little room for interpretation with current procedures for applications under these sections. Under requirements of the Act, municipalities must hold meetings where applicants may make representations to council. Historically, there has only been a couple of cases over the last 15 years where representations by applicants were made at council hearings. With delegation of authority, staff can directly satisfy meeting requirements of the Act by notifying applicants of decision, responding to questions, and setting meetings to discuss disagreements where not be resolved, applicants still have a final avenue of appeal available through the Assessment Review Board. Staff have completed a municipal scan and found several municipalities currently delegate authority for property tax adjustments under these sections to municipal staff. These municipalities include Cambridge, Guelph, Hamilton, Oshawa, Milton, Peterborough, Vaughan, and many others. STRATEGIC PLAN ALIGNMENT: This report supports the delivery of core services. FINANCIAL IMPLICATIONS: Capital Budget The recommendation has no impact on the Capital Budget. Operating Budget The recommendation has no impact on the Operating Budget. COMMUNITY ENGAGEMENT: INFORM dvance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: Municipal Act, 2001, S.O. 2001, c.25, as amended. APPROVED BY: Jonathan Lautenbach, Chief Financial Officer. ATTACHMENTS: Attachment A Draft by-law to delegate council authority to adjust property taxes pursuant to Sections 354, 357, 358 and 359 of the Municipal Act to staff. BY-LAW NUMBER 2024 ____ OF THE CORPORATION OF THE CITY OF KITCHENER (being a by-law to delegate authority to adjust property taxes pursuant to Sections 354, 357, 358, 359 of the Municipal Act to staff) WHEREAS Section 23.1, of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, provides that the Council of a municipality may, by by-law, delegate its powers and duties under this and any other Act to a person or body, subject to certain restrictions; AND WHEREAS Council of the Corporation of the City of Kitchener for purposes of efficient management and service delivery, deems beneficial to delegate to staff the authority relating to the adjustment of property taxes under these sections; AND WHEREAS Section 227 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, states that it is the role of the officers and employees of the municipality to carry out duties required under any applicable legislation and other duties assigned by the municipality; AND WHEREAS pursuant to Section 354 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, the treasurer of a local municipality shall remove unpaid taxes from the tax roll if, a. the council of the local municipality, on the recommendation of the treasurer, writes off the taxes as uncollectible; b. the taxes are no longer payable as a result of tax relief under section 319, 345, 357, 358, 362, 364, 365, 365.1 or 365.2 or a decision of any court; or c. the taxes are no longer payable pursuant to section 33 (1.1) of the Assessment Act. AND WHEREAS pursuant to Section 357 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, a municipality may cancel, reduce, or refund taxes as follows: a. as a result of a change event, as defined in clause (a) of the definition of 2.2) of the Assessment Act, during the taxation year, the property or portion of the property is eligible to be reclassified in a different class of real property, as defined in regulations made under that Act, and that class has a lower tax ratio for the taxation year than the class the property or portion of the property is in before the change event, and no supplementary assessment is made in respect of the change event under subsection 34 (2) of the Assessment Act; b. the land has become vacant land or excess land during the year or during the preceding year after the return of the assessment roll for the preceding year; c. the land has become exempt from taxation during the year or during the preceding year after the return of the assessment roll for the preceding year; d. during the year or during the preceding year after the return of the assessment roll, a building on the land, i. was razed by fire, demolition or otherwise, or ii. was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage; d.1 the applicant is unable to pay taxes because of sickness or extreme poverty; e. a mobile unit on the land was removed during the year or during the preceding year after the return of the assessment roll for the preceding year; f. a person was overcharged due to a gross or manifest error that is clerical or factual in nature, including the transposition of figures, a typographical error or similar error but not an error in judgment in assessing the property; or g. repairs or renovations to the land prevented the normal use of the land for a period of at least three months during the year. AND WHEREAS pursuant to Section 358 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of the taxes levied on land, a. in one or both of the two years preceding the year in which the application is made for any overcharge caused by a gross or manifest error in the preparation of the assessment roll that is clerical or factual in nature, including the transposition of figures, a typographical error or similar errors, but not an error in judgment in assessing the property; or b. in the year or years in respect of which an assessment is made under section 33 or 34 of the Assessment Act for any overcharge caused by a gross or manifest error in the preparation of the assessment that is clerical or factual in nature, including the transposition of figures, a typographical error or similar errors, but not an error in judgment in assessing the property. AND WHEREAS pursuant to Section 359 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, upon application made by the treasurer of the local municipality, a local municipality may increase the taxes levied on land in the year in respect of which the application is made to the extent of any undercharge caused by a gross or manifest error that is a clerical or factual error, including the transposition of figures, a typographical error or similar error, but not an error in judgement in assessing the land. NOW THEREFORE the Council of The Corporation of the City of Kitchener enacts as follows: 1. That on behalf of the City of Kitchener the authority to adjust property taxes under Sections 354, 357, 358 and 359 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, is delegated to the following staff or their successors thereof: - Chief Financial Officer (CFO) - Director of Revenue - Manager of Taxation and Payment Processing - A person who is appointed by the CFO or selected from time to time by one of the above delegates to act in their stead. PASSED at the Council Chambers in the City of Kitchener this 29th day of April, 2024. __________________________ Mayor __________________________ Clerk