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HomeMy WebLinkAboutFND-019-07 Cl~iJ1glOn REPORT FINANCE DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Resolution #:QPA-b~1~o1 By-law #: ~ 001- 90'1 FND-019-07 File#: Date: October 22, 2007 Report #: Subject: PRE.AUTHORIZED PAYMENT PLAN (PAP) FOR TAXES Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report FND-019-07 be received; and 2. THAT the attached by-law repeal and replace By-Law 96-50 be recommended to Council for enactment. NT/hjl Reviewed by: ~{ In Wu, 1J - Chief Administrative Officer. REPORT NO.: FND-019-07 PAGE 2 BACKGROUND: 1.0 A pre-authorized payment plan has been offered to our taxpayers since 1996. Taxes are calculated and spread over a period of twelve monthly payments to ease the burden on the taxpayer. The amount is automatically deducted from their bank account on the first day of the month. The municipality benefits by reduced processing of cheque payments and a secured monthly payment stream that balances cash flow. The deductions start in December of the year prior in order to offset loss of interest revenue that would otherwise occur if the program commenced at the normal February instalment and allowed taxpayers to defer well beyond the normal September instalment. 1.1 It has been many years since our original by-law was passed so the changes outlined in the attached amending by-law are mainly housekeeping items with the exception of bringing online the new home section. PROVISIONS FOR NEW RESIDENTIAL CONSTRUCTION: 2.0 Being in a high growth area our taxpayers may experience a delay in receiving their assessments on their new residential constructions for up to three years. To ease the financial burden and with the understanding that all taxes, including the current year will be paid in full by the end of the following PAP cycle, after they receive their tax bills, we will allow these taxpayers to join our PAP plan, whereby taxes will be paid in full by the end of the next year's PAP cycle. CONCLUSION: 3.0 It is recommended that Council repeal By-law #96-50 and replace it with the new attached by-law. Attachment: Attachment "A" By-law to repeal and replace By-law #96-50 CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOW MANVILLE, ONTARIO L 1 C 3A6 T (905)623-3379 F (905)623-4169 Attachment "A" THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW NUMBER 2007- Being a by-law to repeal By-Law #96-50 and Being a by-law to authorize the establishment of an Optional Pre-Authorized Payment Plan for Taxes and an Employee Payroll Deduction for Tax Payments WHEREAS pursuant to Section 342 & 345(10) of the Municipal Act, 2001, Chapter M-45, the Municipality is empowered to provide for the payment of realty taxes by installments and is further empowered to invoke penalties and discounts; AND WHEREAS the Municipality is further empowered to direct that such monies be paid by the person charged with payment into banks as authorized by the said section of the Municipal Act; NOW THEREFORE the Council of the Corporation of the Municipality ofClarington enacts as follows: 1. THAT a pre-authorized payment plan for taxes be approved with the following conditions: 1) In this By-Law, PRE-AUTHORIZED PAYMENT PLAN means the pre- authorized monthly withdrawal of the taxes from the taxpayer's financial institution through electronic funds transfer. 2) Residential, industrial and commercial realty taxpayers of the Corporation of the Municipality of Cia ring ton may emoll in an optional Pre-Authorized Payment Plan to provide for the payment of realty taxes, and other charges collected in a like manner as taxes, in monthly payments in any year. The payments will be made by pre-authorized withdrawal from the taxpayer's financial institution. 3) The Pre-Authorized payment Plan commenced on December 1, 1996. 4) Payments made under the Plan for 1997 were divided into twelve (12) payments. The first payment was withdrawn on December I, 1996 and on the first day of each subsequent month until November 1, 1997. This will automatically continue for subsequent tax years unless otherwise notified by the taxpayer in writing. 5) If the taxpayer makes all payments as required by the Plan, no penalty or interest will be levied. 6) Continued enrolment in the Pre-Authorized Payment Plan may be revoked by the Director of Finance/Treasurer, if more than two (2) monthly payments fails to be honoured. If a taxpayer defaults on more than two (2) payments, the Director of Finance/Treasurer may cancel the privilege of any defaulting taxpayer to participate in the Pre-Authorized Payment Plan for one (1) year. Tax accounts disqualified from the program, shall revert to the regular installment billing system and be subject to penalty and interest in accordance with Municipal By-Laws. 7) A withdrawal request not honoured at the bank (ie. not sufficient funds or NSF or stop payment) will be subject to a service charge. The next payment will automatically be increased to include the dishonoured amount plus the service charge. 8) At the option ofthe taxpayer for new homes, that are not fully assessed, taxes will be estimated by the tax division. Monthly amounts will be applied until supplementary/omit assessment rolls are received from MP AC. Adjustments will then be made to clear taxes by end of next year's PAP cycle. 9) Taxpayers receiving supplementary/omit tax bills for new residential constructions may join the PAP plan at a monthly amount determined by the tax division based on supplementary/omit bills issued and the current year's taxes that will result in all taxes being current by the end of the next PAP cycle. 2. THAT effective the 1996 taxation year, employees were permitted to make realty tax payments via payroll deduction, based on the number of pay periods over a calendar year and subject to the above applicable clauses. 3. THAT By-law #96-50 be repealed. 4. THAT the provisions ofthis by-law will be implemented for the November 1, 2007 payment cycle. By-Law read a first and second time this 29th day of October 2007. By-Law read a third time and finally passed this 29th day of October 2007. Jim Abernethy, Mayor Patti L. Barrie, Municipal Clerk