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Home My WebLink AboutFND-009-14 aadn" REPORT FINANCE DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: April 14, 2014 Resolution#: By-law#: Report#: FND-009-14 File#: 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-009-14 be received; and 2. THAT the attached by-law to amend By-Law 2007-209 be recommended to Council (Attachment "B") for enactment. Submitted by: � /7m' Reviewed by: Nancy Ta lor, B A,CPA,CA, Franklin Wu, Director of Finance/Treasurer Chief Administrative Officer NT/MM/JJ/hjl CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379 REPORT NO.: FND-009-14 PAGE 2 1.0 BACKGROUND 1.1 A pre-authorized payment plan (PAP) 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 to order to offset loss of interest revenue that would otherwise occur if the program commenced at the normal February installment and allowed taxpayers to defer well beyond the normal September installment. The current program also includes taxpayers receiving multi-year supplementary bills. A copy of By-Law 2007-209 is attached (Attachment "A"). 2.0 PROPOSED AMENDMENT 2.1 Many requests from taxpayers have been received requesting the municipality implement a Pre-Authorized Payment Plan based on the four Installment dates, approved by Council through the tax rate By-Law. An email with a survey of questions was sent to other municipalities within the Durham Region. From the municipalities that responded, each was in favor of the benefits the installment plan offered to their municipality. By implementing the installment pre-authorized payment plan, it provides another payment option to the taxpayers with no additional costs to the municipality. This plan would be beneficial for the significant number of taxpayers that currently leave post-dated cheques based on the installment dates and reduce the time required for processing cheque payments. 2.2 In order to join the installment plan, taxpayers must have a zero balance owing at the time of enrolling. The values to be withdrawn from the taxpayers account will be stipulated on the tax bill with a notation on the bill referencing the taxpayer is on the Pre-Authorized Payment Plan. 3.0 CONCURRENCE — not applicable 4.0 CONCLUSION 4.1 It is recommended that Council amend By-Law 2007-209 to add the option for PAP withdrawals based on installment dates. REPORT NO.: FND-009-14 PAGE 3 CONFORMITY WITH STRATEGIC PLAN — The recommendations contained in this report conform to the general intent of the following priorities of the Strategic Plan: Promoting economic development X Maintaining financial stability Connecting Clarington Promoting green initiatives Investing in infrastructure Showcasing our community Not in conformity with Strategic Plan Staff Contact: Nancy Taylor, Director of Finance/Treasurer Attachments: Attachment "A" — By-law 2007-209 Attachment "B" — By-law to amend By-law 2007-209 Attachment "A" Report FND-009-14 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW NUMBER 2007-209 Being a by-law to repeal By-Law 9-96-50 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(l 0)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 of Clarington 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 Clarington may enroll 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 1, 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 of the 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 MPAC. 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 996-50 be repealed. 4. THAT the provisions of this 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 29`h day of October 2007. larlie ,' Qfty AV1 or Patti .B ,e,' ipa1 Clerk Attachment"B" Report FND-009--i A THE CORPORATION OF THE MUNICIPALITY OF CLARING T ON BY-LAW NO. 2014- To amend By-Law#07-209 Being a by-law to authorize the establishment of Optional Pre-Authorized Payment Plans for Taxes WHEREAS pursuant to Section 342 &345(10) Discount of the Municipal Act, 2001, Chapter M-45, the Municipality is empowered to provide for the payment of realty taxes by instalments 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 OF CLARINGTON ENACTS AS FOLLOWS: 1. Where it refers to Pre-Authorized Payment System, it will now read "Pre-Authorized Payment Plan (PAP)" 2. The following sections are amended as follows: (1) In this By-law, PRE-AUTHORIZED PAYMENT PLAN means the withdrawal of taxes from the taxpayer's financial institution through electronic funds transfer either monthly or by instalment dates determined each year by the Tax Collector. (2) Residential, industrial and commercial realty taxpayers of the Corporation of the Municipality of Clarington may enroll in an optional PAP to provide for the payment of realty taxes, and other charges collected in a like manner as taxes, in either monthly increments or by instalment dates in any year. The payments will be made by pre- authorized withdrawal from the taxpayer's financial institution. (7) A withdrawal request not honored at the bank(ie. Non-sufficient funds (NSF), Stop Payment,.etc.)for taxpayers enrolled in the Monthly Pre- Authorized Plan will be subject to a service charge. The next monthly withdrawal will automatically be increased to include the dishonored amount plus the service charge. A request not honoured at the bank (ie. Non-sufficient funds (NSF), Stop Payment, etc.)for taxpayers enrolled in the Pre-Authorized Instalment Plan must be paid in full by the taxpayer or their representative using an alternative method of payment including the service charge and interest prior to the 15th of the following month or the tax account may be removed from the plan. The following sections will be added under conditions: (10)The instalment Pre-Authorized payment plan will commence June 1, 2014 for the September 2014 instalment. (11)lnstalment dates are set by the Tax Collector each year in accordance with the Municipal Act, 2001, through the tax rate by-law approved by Council. BY-LAW passed in open session on this 28th day of April 2014. Adrian Foster, Mayor Patti Barrie,Clerk