Loading...
HomeMy WebLinkAboutTR-18-85 CORPORATION OF THE TOWN OF NEWCASTLE TREASURY DEPARTMENT K. CAMPBELL, C.A., TREASURER 40 TEMPERANCE STREET TEL.(416) 623-3379 BOWMANVILLE, ONTARIO L1C 3A6 REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF APRIL 15, 1985 REPORT NO. : TR-18-85 SUBJECT: METHOD OF COLI:ECTION OF TAX INSTALLMENTS RECOMMENDATION: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council that this report be received for information. BACKGROUND AND COMMENT The Town' s current collection system allows that all current years taxes are payable without charge to the ratepayers at all branches of the Canadian Imperial Bank of Commerce in the Region of Durham and the Town of Port Hope. The bank charges a fee of 254 per tax stub handled. All arrears of taxes are payable only at the Town Hall in Bowmanville. In any given year the Town issues approximately 13,500 tax bills payable in four installments. That action provides for a potential of 54,000 transactions. Tf all of these transactions were paid directly through the bank, the cost to the Town would be $13,500.00. In 1984 the Town' s cost for the bank collection service was $7,578.90. This lessor amount resulted from the fact that the tax office processed thousands of payments received through the mail . The Tax Collector reports that during the past eleven years there have been very few complaints regarding the method of collection through the bank. Of the 71 bank locations within the area, 25 are Canadian �` V - 2 - TR-18-85 Imperial Bank of Commerce branches. The majority of tax bills paid at the bank are presented at the counters of the King and Temperance Street branch in Bowmanville, where the bank operates a separate wicket to receive those payments. Because we only use the municipali s bank for the collection service, the funds paid at locations outside Bowmanville are forwarded through their courier system and are credited to our account within two days. Payments received at other chartered banks would be sent by mail to our bank and credits would be delayed beyond the current two day period. This would result in a loss of investment income derived from funds held on deposit. In order to have collections made at all other chartered banks, we would be obliged to alter the format of our tax bills to include micro-encoding on the bills. The estimated increased cost to print and process these bills is approximately 64 per account or about $3,000.00 . The computer service which produces our tax bills has indicated that its clients have expressed dissatisfaction with the "all bank collection system" . There have been errors in penalty calculations, delays of two to three weeks in remittances, and the associated problem of penalties having been accrued to an account when in reality, the taxpayer presumes it paid on date received by their bank. Presently, we close our tax accounts receivable books three working days after the month end. This allows all taxpayments received at month end at remote CIBC branches in the area to be processed in our office before penalties are applied to outstanding balances. We could not possibly wait two and three weeks to apply the monthly penalties. The delay in receipt of remittances would cause confusion with our taxpayers as to the actual balance outstanding and numerous adjustments to penalties on a monthly basis. An additional consideration would be the problems encountered with - 3 - TR-18-85 items returned because of non-sufficient funds, post dated items, etc . to the other chartered banks. Currently, we receive such items daily from the bank for immediate follow up by staff. This process would be considerably longer and more involved if numerous banks were involved. The final hinderance to a change is the 75¢ charge levied by the other banks for the payments of bills at their locations. If we were to continue to pay this charge our costs would be significantly increased , plus persons who now mail in their remittance may choose to pay it at a bank for no cost to themselves. In conclusion, staff do not recommend any change from the current system of collection of tax payments. Respectfully submitted, Kath n A. Campbell , C.A. , B.Comm. , Treasurer *gf