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Home My WebLink AboutTR-75-97 REPORT #2 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON WIN11[11 1§1 REPORT Meeting: PECIAL COUNCIL MEETING J• File Date: August 18, 1997 Res. # By-Law# Report#:_, D 7F, w File##: Subject: REPLACEMENT OF TAX SOFTWARE Recommendations: It is respectfully recommended to Council the following: 1. THAT Report TR-75-97 be received; 2. THAT authorization be granted for the purchase of Property Tax computer software and that the contract be awarded to Vailtech Inc. in the approximate amount of $45,000; 3. THAT authorization be granted for the Treasurer to proceed with the purchase of Oracle database software at an approximate cost of $30,000 from Oracle Inc. and a UNIX database server at an approximate cost of $35,000 from 3C Complete Computer Consulting Inc., required for the operation of the new tax software, the GIS software and future replacement of financial software to accommodate year 2000 issues; 4. THAT authorization be granted for the Treasurer to proceed with the purchase of required hardware necessary to accommodate changes to the format of the tax tape from the provincial assessment office at an approximate cost of $5,000 from 3C Complete Computer Consulting Inc.; I 5. THAT consulting on an "as required" basis for the required changes be approved; 6. THAT the Working Funds Reserve be renamed the Working Funds and Rate Stabilization Reserve and that the by-law be amended to provide, that on an annual basis any surplus for the year automatically be transferred into this Reserve to be accessed annually, as required for tax rate stabilization purposes through the budget process; i 7. THAT the existing surplus as reported in the 1996 year end financial statements be transferred into the renamed Working Funds and Rate Stabilization Reserve; i PAP ELA° RECVIC�E iHi5 B PRI CN RECYCLED PAPER TR-75-97 Pale - 2 - 8. THAT the Premier Mike Harris be notified that the Municipality of Clarington is concerned that the legislative changes being implemented with respect to current value assessment will have a significant financial impact on the Municipality of Clarington; 9. THAT the cost of the computer software, hardware and consulting required to accommodate tax changes as a result of Bill 106 be financed from the Working Funds and Rate Stabilization Reserve; 10. THAT the Purchasing By-Law be waived for the above recommendations; and 11. THAT the amended By-Law (Attachment #1) be forwarded to Council for approval. BACKGROUND AND COMMENT: 1.0 On May 27, 1997, the Fair Municipal Finance Act 1997 (Bill 106) received royal assent. This legislation has a significant impact on the Tax Department and the requirements of the computer software. Examples include items such as, phasing-in requirements, tax ratios, property tax classes and farm and managed forests percentage discounts. 1.1 The existing tax software has been modified/customized over the years but has not been replaced since approximately 1986. The existing software cannot accommodate the requirements of Bill 106. The software would have to be entirely rewritten/redesigned at a cost in excess of the replacement costs. 1.2 Also, major staff resources would be required in any redesign. It is far more cost effective to purchase new software already designed to accommodate the changes of Bill 106. 1.3 As Council is aware from the auditor's management letter to Council for the 1996 year end audit, the Municipality's current financial software cannot accommodate year 2000 issues. It was anticipated that full replacement of the financials (including tax) would be presented to Council for approval through the 1998 Capital Budget process. The recommendations in this report result in advancing the timing of the tax module replacement and the required hardware and database software. It is still anticipated that the balance of the financial software will be addressed through the 1998 Capital Budget process. 1.4 Municipal staff have participated in several vendor demonstrations with other area municipalities in the Region of Durham. Due to short time requirements in order to install and implement in time for the effective date of January 1, 1998 of Bill 106, it is not feasible to issue a full Request for Proposal. There are a very limited number of software packages available that can accommodate all of the changes in the time frame required. 1.5 The area municipal staff have specifically looked at two systems, Vailtech and Sierra for the tax module. Both systems have full integration capabilities with current full financial systems in the marketplace. The Region of Durham will be forwarding to Treasury staff TR-75-97 Page - 3 - significant information they have accumulated with respect to replacement of the financial software. None of these financial packages include a tax module. The tax component is purchased separately but fully integradable into the systems available. 1.6 Based on a comparison of Vailtech and Sierra, both appear to have fairly complete functionality. However, Sierra does not have a counter cash receipt system and is significantly more expensive than Vailtech. 1.7 Staff have reviewed recent Request for Proposals issued by London, St. Catherines and Ottawa. Vailtech was awarded the contract in all three cases. 1.8 Due to the large number of municipalities in a similar situation as Clarington, in order to ensure delivery time frames, it is necessary to make a commitment to the software vendor as soon as possible. WORKING FUNDS RESERVE 2.0 Bill 106 Part Two, indicates that in future, the full amount of any surplus must be applied in the subsequent year's budget process. Currently, the Municipality through the budget process, draws in only the portion necessary to meet budget requirements. The balance is carried over to future years to provide for longer term stability. In order to secure this ability to provide some stability in the longer term, it is necessary to transfer the balance of the surplus into a reserve. 2.1 It is also recommended that this practice be established on an annual basis and the by- law for the Working Funds Reserve be renamed and amended to put this into effect. CONCLUSIONS: 3.0 Bill 106 has resulted in many required changes that must be accommodated at the municipal level. Consulting services may be necessary as implementation of a tax system proceeds and it is proposed that they be used on an "as required" basis. 3.1 It is recommended that the required purchases be financed from the amended Working Funds and Rate Stabilization Reserve (balance approximately $900,000) and that the Purchasing By-Law be waived for all of the purchases due to the restricted time frames and small number of companies that can accommodate the legislative changes, current and future. Respectfully submitted, Reviewed by, r f I X — ; T_ ar Marano, H.BSc., A.M.C.T., W.H. tockwell, Treasurer. Chief Administrative Officer. MM/NT/hjl Attachment THE CORPORATION OF THE MUNICIPALITY OF CLAItINGTON BY-LAW NUMBER 97- Being a by-law to amend By-Law #88-159, being a by-law to establish a policy respecting Working Funds Reserves. WHEREAS the Council of the Corporation of the Municipality of Clarington considers it desirable to re-establish the policies respecting Working Funds Reserves; AND WHEREAS Section 163(2) of the Municipal Act R.S.O. 1990, as amended, provides, that "every Municipality and every board, conunission, body or local authority established or exercising any power or authority with respect to municipal affairs under any general or special Act in an unorganized township or unsurveyed territory may in each year provide in the estimates for the establishment or maintenance of a Reserve Fund for any put-pose for which it has authority to spend funds: •S NOW THEREFORE, Be It Enacted and It Is Enacted as a By-law of the Corporation of the Municipality of Clarington that By-Law #88-159 hereby be amended as follows: • That the Working Funds Reserve be renamed as the Working Funds and Rate Stabilization Reserve; • That the policy respecting the Working Funds Reserve be amended to include: 4. 'That on an annual basis, any surplus for the year automatically be transferred into this reserve to be accessed annually through the budget process for mill rate stabilization purposes. By-Law read a first and second time this 18th day of August 1997. By-Law read a third time and finally passed this 18th day of August 1997. Mayor Clerk i THE CORPORATION OF THE TOWN OF NEWCASTLE BY-LAW 88- 159 being a by-law to establish a policy respecting Working Funds Reserves WHEREAS the Council of the Corporation of the Town of Newcastle considers it desirable tore-establish the policies respecting Working Funds Reserves; AND WHEREAS Section 308 (1) of The Municipal Act, R.S.O. 19710, as amended, provides, that "every Municipality and every board, commission, body or local authority established or exercising any power or authority with respect to municipal affairs under any general or special Act in an unorganized township or unsurveyed territory may in each year provide in the estimates for the establishment or maintenance of a Reserve Fund for any purpose for which it has authority to spend funds; NOW THEREFORE BE IT ENACTED AND IT IS ENACTED AS A BY-LAW OF THE CORPORATION OF THE TOWN OF NEWCASTLE AS FOLLOWS: Policy: 1. That a policy is hereby established whereby an amount be included in the annual estimates of the Town to be transferrred to the Working Funds Reserve. 2. That the balance in the Working Funds Reserve by allowed to float within target limits of 5% to 10% of the current year's total Municipal portion of the tax billing. 3. That the Treasurer be authorized, after any given year-end, to transfer to the General Capital Reserve, any funds that are no longer required to meet the cash requirements of the previous year. By-Law read a first time this 24th day of October 1988 By-Law read a second time this 24th day of October 1988 By Law read a third and final time this 24th day of October 1988 Mayor ing. Cler i I