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Home My WebLink AboutTR-23-92 THE CORPORATION OF THE TOWN OF NEWCASTLE REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: April 21, 1992 Res. # Report#: TR-2 3-92 File#: By-Law Subject: TAX PAYMENTS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-23-92 be received for information; 2 . That Mr. Barrie Clulow be given a copy of report TR-23-92 . BACKGROUND & COMMENTS �I At the Council Meeting held on January 13, 1992, Mr. Barrie Clulow's letter dated December 6, 1991 (attachment #1) was put forth for Council Direction. He is recommending various methods for payment of taxes for consideration. He also suggests passing a resolution upon adopting these methods that would be forwarded to Premier of Ontario, the Fair Taxation Commission and A.M.O. promoting these methods on a province-wide basis . In Mr. Clulows letter his first concern deals with his understanding that Municipal Councils may on occasion borrow money from financial institutions to tide them over until the quarterly revenue comes in. The Town of Newcastle has been able to meet its financial obligations before tax instalments come due. This is possible by planning tax instalment due dates to coincide with its larger dollar expenditures for such payables as the region and school boards levies . The Town also carefully monitors it's cash flow position on a daily basis and makes investments accordingly. In response to recommendation la) The Town of Newcastle does accept post-dated cheques from taxpayers in advance of instalment due dates and monthly for those in arrears . However, there is a penalty charge on any overdue amounts on the first day of each month. Taxpayers are aware that the instalment due dates are approximately at the same time each year allowing them to be able to budget ahead for this fixed expense. nns.rn,meo ai aewaeo nnrcn TR-23-92 Page 2 Recently when renewing the Town's banking services; direct monthly deposit (pre-authorized checking) from the taxpayers account into the Town's bank account had been investigated as an alternative to quarterly instalments . However, using the volume that is currently paid through the banks, this is not a cost efficient method at this time. Staff propose to pursue this alternative in the form of a questionnaire to be included with the 1992 final tax bill to determine interest in this method of payment. The cost to process decreases with volume and if the interest is significant this alternative could be implemented for the 1993 tax year, thus any associated cost would be reflected in the 1993 current budget. i Recommendation lb) therefore; is not applicable as the Town does not borrow money from the financial institutions prior to its quarterly revenue coming in. Staff is of the opinion however, that most financial institutions will allow individuals to opt out of paying taxes through the institution if they wish to pay their property taxes directly to the Municipality. To add to Mr. Clulows letter there are advantages of the current tax payment system such as the following: 1) Tax Notices sent to a financial institution are paid on time and usually when there are two instalments on the notice the second is paid at the same time the first is due. There is no concern that the institutions cheque will be returned due to Non-Sufficient Funds etc . 2) Financial Institutions have the computer systems and staff required to monitor monthly payment systems . 3) Many taxpayers prefer to pay their taxes monthly to their financial institution with their mortgage payment as it's one fixed amount from their account, and therefore easier to budget. At this time Staff considers that it maybe premature to pass a resolution as outlined in 2a and 2b of Mr. Clulows letter to recommend these methods of tax payments to outside agencies until Staff has had the opportunity to study the impact of adopting such methods. CONCLUSION It is recommended that the Town of Newcastle continue with its current method of tax payments, but study alternative methods some of which have been put forth in Mr. Clulow's letter. TR-23-92 Page 3 Respectfully submitted, Recommended for presentation to the Committee r � Marie A. Marano, H.BSc . , A.M.C.T. a rence E,!. Kotseff Treasurer Chief Administrative Officer MAM/RS/ges Attachment i I i i i IN VIEW OF THE AFOREMENTIONED. I SUBMIT THE FOLLOWING RECOMMENDATIONS AND HOPE THAT THE VARIOUS COUNCILS WILL SUPPORT THESE RECOMMENDATIONS BY: 1/ IMPLEMENTING THE FOLLOWING; A/ OFFER AN OPTIONAL MONTHLY FORM OF TAX PAYMENT PROBABLY BY WAY OF PRE AUTHORIZED CHEQUING OR POST DATED CHEQUES. OFFER A REDUCTION TO THE TAXPAYER UTILIZING THIS METHOD OF PAYMENT OF A RATE SLIGHTLY LESS THAN THAT WHICH THE MUNICIPALITY CITY ETC. WOULD HAVE HAD TO PAY TO THE FINANCIAL INSTITUTIONS TO BORROW THIS SAME MONEY. 2/ PASSING A RESOLUTION TO BE FORWARDED TO THE PREMIER OF ONTARIO, THE FAIR TAX COMMISSION AND AMO. THAT; A/ THIS METHOD OF TAX PAYMENT BE MADE AVAILABLE PROVINCE WIDE, BUT (subject to 2b) STRICTLY ON A OPTIONAL BASIS. B/ THAT LEGISLATION BE PASSED THAT FINANCIAL INSTITUTIONS NO LONGER BE ALLOWED TO FORCE PEOPLE TO PAY AN ESTIMATED AMOUNT OF TAX TO THE FINANCIAL INSTITUTIONS ON A MONTHLY BASIS BUT INSTEAD BE ABLE TO DIRECT THE MORTGAGOR TO UTILIZE THE MONTHLY PAYMENT PLAN AVAILABLE IN THEIR AREA AND THAT THE MUNICIPALITY, CITY ETC. ISSUE A QUARTERLY STATEMENT TO THE MORTGAGEE. IT IS MY BELIEF THAT THE AFOREMENTIONED RECOMMENDATIONS, RESOLUTIONS AND LEGISLATION WOULD HELP THOSE MOST IN NEED OF HELP 1/ FIRST TIME HOMEBUYERS 2/ THE ELDERLY AND ANY ONE ELSE WHO LIVES ON A FIXED INCOME OF ANY NATURE. THE AFOREMENTIONED WOULD ALSO HELP ELIMINATE LARGE AMOUNTS OF MONEY HAVING TO BE BORROWED BY THE VARIOUS FORMS OF MUNICIPAL GOVERNMENTS AND PROVIDE THEM WITH A MEANS OF A STEADY CASH FLOW FOR DAY TO DAY OPERATIONS. I SINCEREL DIST1R 3t�T10� 9W. CLERK __.ACK. BY,- - �-- ------ ORIGINAL T� BARRIE CLULOW COPIES T COPY TO: THE PREMIER OF ONTARIO THE FAIR TAX COMMISSION AND SEVERAL LOCAL NEWSPAPERS 2 BA RRI E GL UL f?W ATTACHMENT l w v SECci'vb R VE UXBRSOGE� pNTARIO L.9P. 7/✓9 1-416 $52-5142 DECEMBER 6TH, 1991 TO THE MAYOR AND COUNCILLORS OF THE: TOWNSHIP OF UXBRIDGE, CITY OF OSHAWA, TOWNSHIP OF SCUGOG, TOWN OF PICKERING, TOWN OF WHITBY, TOWN OF AJAX, TOWNSHIP OF BROCK, THE TOWNSHIP OF NEWCASTLE, AND THE CHAIRMAN OF DURHAM REGION AND ALL REGIONAL COUNCILLORS DEAR MAYORS, COUNCILLORS, REGIONAL CHAIRMAN AND REGIONAL COUNCILLORS IT IS MY UNDERSTANDING THAT VARIOUS COUNCILS ON OCCASION HAVE TO BORROW MONEY FROM A VARIETY OF FINANCIAL INSTITUTIONS TO TIDE THEM OVER UNTIL THE QUARTERLY TAX REVENUE BEGINS IN IN. THE FOLLOWING.D MONEY PLUS INTEREST FROM TAX REVEN UE WHEREAS MANY PEOPLE ARE FORCED AS A CONDITION OF THEIR MORTGAGE TO PAY A PORTION OF THEIR TAX BILL ON' A MONTHLY BASIS TO THEIR MORTGAGE COMPANY. WHEREAS THESE FINANCIAL INSTITUTIONS SELDOM PAY ANY INTEREST TO THE PROPERTY OWNER. WHEREAS THESE SAME FINANCIAL INSTITUTIONS THEN LEND MONEY TO THE VARIOUS MUNICIPALITIES AND COLLECT INTEREST ON THIS MONEY. I WHEREAS SOME PEOPLE LIVE ON FIXED MONTHLY INCOMES AND MAY HAVE SOME DIFFICULTY IN PAYING THESE TAX BILLS IN THE TIME FRAME ALLOWED THUS INCURRING A PENALTY OR INTEREST CHARGE. WHEREAS SOME MUNICIPALITIES ALREADY OFFER AN OPTIONAL MONTHLY PAYMENT PLAN OF TAXES BY WAY OF PREAUTHORIZED CHEQUING. i I i 1 � i 704 I