HomeMy WebLinkAboutTR-29-85 ,\
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CORPORATION OF THE TOWN OF
NEWCASTLE
TREASURY DEPARTMENT K. CAMPBELL, C/\, TREASURER
4o TEMPERANCE STREET TsL.(416) e23-3379
oOWMANV|LLs. ONTAn0
UCoAe
REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF
MAY 6, 1085
REPORT NO.: TR-29-85
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SUBJECT: METHOD OF COLLECTION OF To 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 ooi |ocf|on system allows that all current years
foxes are payable without charge to the f a r of all branches of
the Canadian Imperial Bank of Commerce in the Region of Durham and the
Town of Port Hope. The bank charges o fee of 251; per fax stub handled.
All arrears of taxes are payable only at the Town Hall in Bowmanvi | |o.
In any given year the Town issues approximately 13,500 fox bills
payable in four installments. That action provides for a potential of
54,000 transactions. If 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 co| |*of|on service was $7,578.90. This
lessor amount r*au|fod from the fact that the fox office processed
thousands of payments received through the ma\ | .
The Tax Collector reports that during the past m|*von years there have
been very few complaints regarding the method of oo| |eofimn through the
bank. Of the 71 bank locations within the area, 25 are Canadian
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TR-29-85
Imperial Bank of Commerce branches. The majority of tax bi I Is 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 municipality' 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 69 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
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TR-29-85
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 750 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.
Staff have written to the chartered banks located within the Region of
Durham regarding the collection of our taxes and have received
responses from four of the five banks. Those responses indicate a
charge of 750 per transaction would be levied by the banks. Some of
the banks would require the change to the standard bill format approved
by the Canadian Banker's Association in order to process our payments.
Most of the banks would remit the settlements the next day by mail to
the C. I .B.C., Bowmanville. Any NSF items or other charge backs would
be debited directly against the Town's account at the C. I .B.C.,
Bowmanville.
In conclusion, staff do not recommend any change from the current
system of collection of tax payments.
Respectfully submitted,
Kathrly Campbell , C.A., B.Comm. ,
Tre :4u
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