Write Off Un-Paid Property Taxes

Council Meeting

TO: Council DATE: November 9, 2011 FROM: Kathleen Day, Director of Finance MEETING DATE: November 15, 2011

Write Off Un-Paid Property Taxes

RECOMMENDATION:

THAT Council requests the Honorable Ida Chong, Minster of Community, Sport & Cultural Development, to confer the power to the council for the Town of View Royal, to write off unpaid property taxes of the following Federal Lease Property:

• Roll No. 401.18300.000 $ 5,240.69

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

PURPOSE OF REPORT:

Section 315.3 of the Local Government Act states “the minister may confer on a local government further powers to manage and dispose of assets, including taxation revenue, that the minister considers necessary or advisable”.

BACKGROUND:

The Bowater Forest Products Lease of Federal foreshore lands expired in 2009. BC Assessment Authority did not receive notice of the lease cancellation and the land continued to be assessed and taxed in the year 2010.

Due to the bankruptcy of Abitibi-Consolidated Inc., the Town filed a claim for unpaid 2009 and 2010 property taxes owing from Bowater Canadian Forest Products Inc (subsidiary of Abitibi-Consolidated Inc.) It was at this point we were advised that the lease with the Federal Government had expired in October 2009.

The Towns claim against Abitibi-Consolidated Inc. was accepted for the unpaid 2009 property taxes only and the Town received approximately 30 cents on the dollar. This settlement still left $24,024.81 of 2009 taxes still outstanding (including the 10% penalty and accumulated interest), and $25,177.60 of 2010 property taxes outstanding (including the 10% penalty and accumulated interest).

Subsequent to the claim settlement, staff re-submitted its 2010 Federal Payment in Lieu of Real Property Taxes applications to Public Works and Government Services Canada with the addition of this leased property. In addition to the request for payment of the 2010 grant in lieu of taxes for this property, staff requested the remaining 2009 property taxes to be paid.

Public Works and Government Services Canada paid the remaining 2009 property taxes and the 2010 grant in lieu of taxes, which paid for all the unpaid taxes for 2009 and 2010 plus interest. However, the 10% penalty amounts plus a small interest amount remains outstanding.

BUDGET IMPLICATIONS:

The anticipation was that the Town may not receive any assistance from the Federal Government in regard to the unpaid property taxes; thus, at the December 31, 2010 year end, staff set up a liability of $10,857.77 in anticipation of not receiving some or all of the 2009 and 2010 property taxes (municipal portion).

Thus, even though we have to write off $5,240.69, we are actually ahead by $5,617.08. The $5,617.08 is the remainder of the $10,857.77 that we can now bring back into revenue.

POLICY IMPLICATIONS:

The property in question will not be added to the 2012 Grant Roll for continued payment under the PILT program, as the property does not really exist anymore and BC Assessment has advised the Town that there is nothing left to assess.

ALTERNATIVES TO STAFF RECOMMENDATION:

None.

RECOMMENDATION:

THAT Council requests the Honorable Ida Chong, Minster of Community, Sport & Cultural Development, to confer the power to the council for the Town of View Royal, to write off unpaid property taxes of the following Federal Lease Property:

• Roll No. 401.18300.000 $ 5,240.69

SUBMITTED BY: Kathleen Day, Director of Finance

REVIEWED BY: Kim Anema, Chief Administrative Officer