HomeMy WebLinkAboutTR-21-96 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meetin g' GENERAL PURPOSE AND ADMINISTRATION COMMITTEE ? CSC
File#
Date: April 1, 1996 Res.
Report#:____TR_2J_96 File#: By-Law#
Subject: CONCERNS REGARDING HIGH TAXES IN CLARINGTON
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report TR-21-96 be received;
2. THAT Mr. Edmond Vanhaverbeke of Syvan Developments Limited, 85 King Street
West, Unit #2, Newcastle, Ontario, LIB 1L2, receive a copy of TR-21-96.
BACKGROUND AND COMMENT:
At a meeting held on January 15, 1996, the Council of the Municipality of Clarington considered
Mr. Vanhaverbeke's letter dated January 5, 1996 (see Attachment #1) and passed the following
resolution:
THAT the correspondence dated January 5, 1996, from Edmond Vanhaverbeke,
President, Syvan Developments Limited, stating his concern that taxes in Clarington are
becoming too high for the Municipality to remain competitive in attracting new business,
be received;
THAT the correspondence be referred to the Chief Administrative Officer to present a
breakdown of taxes to the General Purpose and Administration Committee during budget
deliberations; and
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THAT Edmond Vanhaverbeke be advised of Council's decision."
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RPAPEEPfl flE RDLSE h
TIUS t51'LLLRED ON RE.YC PAPER J
TR-21-96 Page - 2 -
The following chart is a 1995 comparison of Industrial Realty taxes between the municipalities in
the Greater Toronto Area (GTA):
995r�dttstz aXalty ' es
�Yluxlc�
994..
9 ...
....... ... ve 9 : :<:. >
: >::;;::;: X9::.5.:::: :::::::A::: xa .. . .95.........
Note l) Note 2 .
Burlington 1.70 $1.19
Oakville 1.56 1.15
Brampton 2.88 1.15
Mississauga 2.90 1.15
Etobicoke 2.80 1.90
North York 3.10 1.91
City of York 2.40 2.00
Toronto 2.02 1.99
East York 3.41 2.02
Scarborough 2.70 2.05
Vaughan 1.72 1.14
Richmond Hill 1.59 1.18
Markham 1.00 1.11
Aurora 2.04 1.10
Newmarket 0.50 1.06
Pickering 1.90 1.08
Ajax 1.15 1.07
Whitby 0.10 1.05
Clarington - Courtice 0.58 1.07
Bowmanville* 0.58 1.12
Oshawa ** -0.56 1.47
Note l: Change from 1994 - 1995 is based on the percentage increase
in the public commercial mill rates for municipalities compiled
from information provided by Property Tax Departments.
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Note 2: Average realty tax figure per square foot/annum is based on a
random sample of industrial properties in each municipality.
Properties chosen had approximately 20,000 square feet gross
building area with approximately 10 percent finished office and
18 feet clear ceiling warehouse height.
Source: Royal LePage Commercial Real Estate Services
* Based on information provided by the Region of Durham Assessment Office and
Municipality of Clarington
** Information provided by the City of Oshawa. The 1994 averge was $1.05 and the
1995 mill rate decreased by .56 over the previous year. As the source of the
information, due to the OPSEU strike was different, it is suspected the basic
assumptions required to calculate the rates may not have been the same.
Therefore, the reliability of the data is in question.
1 Except for * and ** information extracted from the Toronto Real Estate Board - ICI
Insight '96 Guide
/ 16
TR-21-96 Page - 3 -
Mr. Vanhaverbeke's letter states "that Clarington is rapidly becoming non-competitive with
regards to taxes. Our taxes should be less than Oshawa's to compensate for the extra distance
from the Toronto core. In many cases seem to be higher."
A review of the Industrial Realty Tax Comparison chart suggests that we are relatively
competitive when we look at the other outlaying municipalities of the GTA. Our mill rate had
experienced the third lowest increase on the list for 1995.
The Municipality's overall mill rate for municipal, regional and school purposes, over the past
five years has been as follows:
Rear:..::...:....:;::::: .......:::.:..G rteral::> 11.;:.ate
.:....................... .. ...:.:..:.::.::Mx.:::R %:::Gkz . >:<:>:::: <:.
..:::.::::::::
o P.e.sous`:::::::::::>:
Cai in ..... Pubhc Comniercral;Separate ;.::....,:;. CS
..................
:::.:. :::::.;....
S ;::::;::::>::::::>::::>:
1995 818.582 757.176 .57 .13
1994 814.003 756.206 .50 1.53
1993 809.980 767.766 3.76 2.24
1992 780.640 750.967 4.29 1.72
1991 748.505 738.268 5.10 6.83
Average 2.84 2.49
Median 3.76 1.72
More specifically the Municipal portion over the last five years has been as follows:
Rear :'. Mj Rats :' °loltan e
C >
P.CS::::::::;.>:> ;from.:Previous;;
..:..:. . ...
.. ................
.............
.....Xea s:::::::...:
1995 161.940 .10
1994 161.773 .02
1993 161.744 -.05
1992 161.832 1.40
1991 159.600 4.80
Average 1.25
Median .10
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TR-21-96 Page - 4 -
There are many other factors that need to be considered when comparing municipal taxes. The
City of Oshawa has not been reassessed in over twenty (20) years, and operates on a much older
base year. There is greater opportunity for inequities to exist the older the base year is, which
could result in a tremendous tax shift should there ever be a reassessment. The school rates
which are set by the school boards are set by two entirely different school boards. In both cases
the municipality does not have any input into the school board's budget process. In Clarington,
the school board represents 60% of our total taxes collected and the municipal 20%. In Oshawa,
these percentages are 51% and 29% respectively. Refer to Attachment #2 which outlines the
residential to commercial split and apportionment of some of the area municipalities.
Property Address: 164 Baseline Road, Bowmanville
Roll #: 020-120-19800-0000
Assessed Owner: Syvan Developments Limited
Total Taxes paid in 1995: $41,728.63
Breakdown of Total Taxes Paid:
1995 Regular Instalments: $34,866.61
1995 Supplementary (effective June 1, 1995) 2,558.33
1994 Supplementary (effective September 1, 1994) 4,303.69
Total $41,728.63
Minus: Assessment Review Board Decision - Reduction 653.87
$41,074.76
credit was applied against Interim 1996
Mr. Vanhaverbeke's property, which is zoned industrial, allows for commercial tenants.
Apparently his tenants are predominately commercial type tenants which appears to be the only
commercial component to the property. However, this alone does not decide how a property
should be assessed. When other factors are taken into account, the property is assessable as
industrial.
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The building, to our knowledge is 100% finished. As noted on page 2, Note 2, the average
20000 square foot building has approximately 10% finished office and contains your typical
warehouse space. This building is 100% finished and does not contain any warehouse space.
This building is quite unlike any other building in the Clarington area.
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An appeal in 1995 to the Assessment Review Board (ARB) only granted a reduction of $653.87.
The appellants had the option and opportunity to have launched a further appeal to the Ontario
Municipal Board (OMB) if they disagreed with the results.
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TR-21-96 Page - 5 -
Mr. Vanhaverbeke has expressed concern over (a) the industrial and commercial class factors
which are 7.2% and 5.2% respectively and (b) for being penalized for doing renovations. These
areas are out of the Municipality's control. It is the Assessment Office's responsibility to
implement these valuation rules set by provincial legislation and policies.
CONCLUSIONS:
The Municipality while sympathetic to Mr. Vanhaverbeke's concerns, does not have jurisdiction
to alter any of the specific assessment issues identified above and they must be addressed with
the Assessment Office directly. However, Staff recommend Mr. Vanhaverbeke be thanked for
taking the time to notify us of his concerns. He should also be advised that in keeping with past
years, the Municipality will be diligent in its attempts to maintain the same level of service,
while holding the municipal mill rate to a zero percent increase and that the issue of the
Economic Development Officer position will be addressed by Council in the 1996 budget
deliberations.
Respectfully submitted, Reviewed by,
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Marie A. Marano, H.BSc., A.M.C.T., W.H. Stockwell,
Treasurer. Chief Administrative Officer.
MM/RS/hjl
Attachments
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ATTACHMENT #1
85 KING STREET WEST, UNIT 2
DEVELOPMENTS NEWCASTLE, ONTARIO L1B 1L2
T E BUS. (905) 987-3211 FAX (905) 987-3083
January 5, 1996
JAN 5 1 IT-91 6
Municipality of Clarington
40 Temperance Street I 1M. CP'!R;
Bowmanville, ON 1viAY01i'6 OFHGt
LIC 3A6
Attention: Diane Hamre and Members of Council
Dear Madam:
As a developer who attempts to attract tenants in the Municipality of Clarington, I feel
compelled to comment on certain current matters in the municipality. I know that given
the provincial Cutbacks there will be some pressure for tax increases in the municipality.
Speaking especially from the industrial/commercial side, I believe that this would be a
grave mistake.
The single most important item to a prospective tenant or purchaser wishing to
commence business in the municipality is what the occupancy costs will be. The two
main factors which affect this are the base rent or purchase costs, and the municipal
taxes. The base rent and purchase costs have been reduced significantly in the
Greater Toronto Area by market forces. Taxes, however, have remained high. My
concern is that they are becoming too high in Clarington for the municipality to remain
competitive in attracting new business. I have buildings in Clarington and in Oshawa
and it appears to me that Clarington is rapidly becoming non-competitive with regard to
taxes. Our taxes should really be less than Oshawa's to compensate for the extra
distance from the Toronto core, In many cases Clarington's taxes seem to be higher.
The building I have at 164 Baseline Road in Bowmanville has been reassessed to the
point where I am paying $1.72 to $2.61 per square foot per year. I realize that I am
being penalized for doing renovations to my buildings, however, this is what I had to do
to attract tenants. My problem is that I am forced to pass on huge tax increases to
tenants who chose my building initially because of lower occupancy costs. Because of
the difference in commercial and industrial factors, in some cases I (and therefore the
tenants) am paying higher taxes in an industrial area than I would pay in a commercial
area. These high taxes frustrate my attempts to supply affordable accomodation to
new businesses.
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January 5, 1996
Municipality of Clarington
Page Two
In the late 1980's there was tremendous pressure, due to growth, for municipal
services. Accordingly, there was pressure to have the staff in departments grow
rapidly. Now there is little growth and little building. Are departmental expenses being
cut back accordingly? I can't help but think that there are many places to cut
expenditures before raising taxes.
The problem, obviously, is that if taxes discourage new businesses from establishing in
the area, then the problem for the existing taxpayers is exacerbated and there will be
little hope of cutting taxes in the future.
On a separate matter, I recently purchased a building in Oshawa which required a
minor variance to satisfy my prospective tenant. The planning staff bent over
backwards to have an early meeting scheduled and the variance passed to
accommodate the business. Landscaping issues were handled within the department
so I was not required to hire a landscape architect. In all it was apparent that they
wanted to do everything possible to get this new business for the city. The last
comment from the minor variance committee was "Welcome to Oshawa". I use this
only as an example of how competitive we must be in dealing with new businesses.
In summation we need to take a hard look at the expenses of the Municipality of
Clarington. We don't need an Economic Development Officer, overstaffed
departments, or new capital projects. What we need now is an efficient municipal
government with (1) employees who are taught to assist and to welcome new
businesses, not to obstruct them, and (2) a property tax structure which encourages
businesses to locate here.
I hope you will accept this letter in the spirit in which it is being sent; that is as
constructive encouragement for the tough decisions that lie ahead for yourself and
Clarington Council. Best Wishes for the new year.
Sincerely,
SYVAN DEVELOPMENTS LIMITED
Edmond Vanhaverbeke ;
President
ATTACHMENT #2
The following is the taxable assessment base split between residential and Comm ercial/industrial
for the local area municipalities for information purposes:
Basetrueipalityes1den#aal Cozrercali education M�niipal gi,
Year
ustrial
% Ind
(%)
1978 Ajax 80.0 20.0 54.40 25.60 20.00
1960(Ward 1-6) Oshawa 61.8 38.2 51.90 29.00 19.10
1940 (Ward 7)
1984 Pickering 79.4 20.6 59.35 17.25 23.40
1940 Whitby 84.0 16.0 55.70 23.60 20.70
1980 Clarington 84.6 15.4 61.00 20.00 19.00
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