At the June 21st Council meeting, Director of Finance/Treasurer Kimberley Pope presented the annual Property Tax Arrears Update. It included a few surprises.
In 2020, due to the COVID-19 pandemic, the municipality waived all late payment penalties from March 16, 2020 to October 31, 2020 and held the collection process until after the final tax due date. In November 2020, the municipality re-commenced penalty and interest, following regular collection policy.
If property taxes are two calendar years in arrears, the Municipal Act allows the municipality to register a lien or Tax Arrears Certificate on the property. After three years, the municipality can move to sell the property through the provincial Tax Sale process to recover unpaid taxes.
As of May 31, 2021, there were 63 accounts that are eligible for Bailiff Action with a total outstanding balance of $236,371 and 48 accounts eligible for Tax Registration/Tax Sale with a total balance of $391,934. Property tax arrears in these categories have increased by 31% over last year. The 111 accounts in this group represent 2.5% of the township’s property tax accounts.
The township also collects fees for Water and Wastewater services. The outstanding balance on these accounts has risen to $111,609.01, from 179 accounts, or 19% of all water service accounts. Last year the water arrears account balance was roughly $40,000. Council found this increase troubling.
Ms. Pope explained that these arrears balances are rarely written off. To encourage prompt payment, late balances attract a 10% penalty, which is included in the reported numbers. Once an account falls 90 days in arrears, the outstanding balance is added to the property tax bill. When a property is sold, property tax balances are paid directly through the disbursements concluding the transaction. If an outstanding balance arises after a ratepayer has moved, the balance is collected through third party collection agencies.
Council requested an update on the Water/Wastewater account arrears be provided in six months rather than in one year to satisfy their concerns about this trend and asked that staff review their communication process regarding these charges to ensure it was clear and timely. KG