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Township of
Havelock-Belmont-Methuen
PO Box 10, 1 Ottawa St E
Havelock ON K0L 1Z0
Developed By:
Wendelin McConnell, Treasurer
Date: July 12, 2016
Department:
Finance
Adopted By:
Council
Date:
Resolution #
Effective:
Cross-Reference:
Revisions: Aug 8, 2017
To amend replace policy #44 dated March 6, 2017.
Council wishes to ensure prompt billing of the tax levy in order to meet the budgetary
expenditures of the Township for the fiscal year.
Council wishes to ensure prompt, efficient, courteous and consistent service to all
taxpayers of the municipality.
Council wishes to ensure that collection procedures are appropriate within the
requirements of the legislation relative to tax collection.
Therefore, Council wishes to establish this policy to ensure a consistent, effective and
appropriate Tax Billing and Collection Policy.
SCOPE:
This document is to provide guidance to staff and to provide a basis for decision-making
relating to Tax Billing and Tax Collection procedures for all taxpayers in the Township of
Havelock-Belmont-Methuen.
Policy Name:
Tax Billing & Collection Policy
Policy #44
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POLICY, PROCEDURE AND IMPLEMENTATION:
1.0
Purpose
The guidelines contained in this policy serve to supplement the Provincial legislation
that govern this area, especially for situations where Provincial legislation provides a
choice, allows for Treasurer discretion, and for issues on which the legislation is silent.
Legislation which should be reviewed within the context of this policy is the Municipal
Act, 2001, with particular attention to Parts VIII, IX, X, and XI.
2.0
Billing
➢ A levying By-law passed by Council is required in advance of either an Interim or
Final tax billing
➢ Interim tax billings shall be produced in January based on 50% of the annualized
taxes of the property for the previous calendar year. The tax billing may include
local improvement charges, area charges, and any special charges levied by the
Township or Provincial government. Outstanding charges authorized by
legislation shall be added to the interim billing at 100%.
➢ The tax billing will clearly identify the municipality, property and owner, state the
demand date, the annualized taxes for the prior calendar year, the percentage
used to calculate the interim taxes up to a maximum of 50%, and calculated
taxes levied and any arrears owing against the property.
➢ Final billings are produced subsequent to the passing of the annual municipal
budget and are based on tax rates established by By-law from the budget
requirements of the township and the Ministry of Finance, in relation to the
education tax rate. The tax billing will be calculated to produce a tax billing equal
to the current assessment and the appropriate tax rate, all local improvement
charges, area charges and any special charges levied by the Township or
Provincial government. The tax bill will fully comply with the Standardized Tax Bill
format as defined by legislation.
➢ The Municipal Act requires tax billings be postmarked and mailed not later than
twenty one (21) calendar days from the date of the first installment due date. Tax
bill can also be sent through email methods of an eBilling process.
➢ Arrears are included solely in the first installment due date amount. Installment
due dates will be indicated on the payment stubs. Billing messages may be used
on the face or reverse of the tax billing.
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3.0
Due Dates
➢ The specific due dates will be identified in both Interim and Final Levy By-laws for
the Township.
➢ Due dates for the payment of taxes shall be dependent, in the case of the Final
Bill, on the final approval of the Budget by Council and the subsequent passing of
a levy By-Law. Notwithstanding that there may be fluctuations as a result of
budget approval, tax billings will normally be as follows:
o Interim Bill
April and June (first Friday)
o Final Bill
August and October (first Friday)
4.0
Minimum Bills
➢ In accordance with the provisions permitted in the Municipal Act, section 355 (1),
the Township will have a minimum tax bill at the amount permitted under the Act.
Currently the maximum allowable under the Act for the minimum tax bill is $50
and the Township's minimum tax bill is $25. The amount levied in excess of the
assessment times the tax rate becomes part of the general funds of the
Township. The rationale behind this provision is to ensure the issuance of tax
bills is cost effective for the municipality.
5.0
Settlement of Accounts
➢ Payment will be in the form of cash, cheque, money orders, bank drafts, pre-
authorized payment plans, debit, credit cards online, internet and telephone
banking made payable to the Township of Havelock-Belmont Methuen. Cheques
which are post-dated to the tax due date will be accepted and held by the
Treasurer. Payment of taxes will be accepted via mail to:
Township of Havelock-Belmont-Methuen
PO Box 10
1 Ottawa St E
Havelock ON K0L 1Z0
➢ Post-dated cheques once submitted cannot be returned for any reason (eg.
Changed bank accounts, sold property).
➢ "Third party" cheques will not be accepted.
➢ Change will not be returned for cheques accepted in excess of the amount due
on the tax account. Should a credit appear on the tax account as a result of the
payment, it will be applied to subsequent installments not yet due in the current
year. However, at the written request of a taxpayer, a refund cheque will be
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requisitioned, after allowing sufficient time (15 business days) for the taxpayer's
cheque to clear their financial institution. The minimum amount for a refund
request to be processed will be $25.
➢ Any cheques and/or pre-authorized payments returned for any reason will be
subject to a returned payment fee which, is set out in the Tariff of Fees By-law
unless, a replacement payment has been received prior to the Township's
notification of the returned cheque.
➢ Taxes are payable in Canadian funds only (CAD).
6.0
Collection - Payment Incentives
➢ There are five basic incentives set out by legislation to promote timely payment
of taxes as follows:
o Penalty / Interest
o Bailiff Action
o Collection Agency
o Rent Attornment
o Tax Registration / Tax Sale
➢ Penalty / Interest
o The rate at which penalty and interest is charged is set by By-Law.
Currently the rate is established under the provisions of the Municipal Act
Section 345. The Township may review this rate each year, but cannot
exceed the maximum percentage established at 1.25%. The purpose of
penalty is to persuade ratepayers to pay on time. Penalty and interest
shall be charged as set out in the legislation and By-Law. When payments
are made penalty and interest is cleared first then applied to the oldest
principal outstanding.
➢ Bailiff Action
o Section 349 of the Municipal Act provides that taxes may be recovered
with costs as a debt is due to the Township from the taxpayer originally
assessed for them and from any subsequent owner of the assessed land
or any part of it.
o The Township may issue a warrant to distain for property taxes if the taxes
remain unpaid for a period of fourteen (14) days after the installment due
date.
➢ Collection Agency
o Section 304 of the Municipal Act provides that if a municipality uses a
registered collection agency under the Collection Agencies Act to recover
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a debt including taxes, the collection agency may recover its costs as long
as the costs do not exceed the amount approved by the municipality.
➢ Rent Attornment
o Under Sections 350 of the Municipal Act, the municipality may seize the
rents of an income producing commercial property upon giving proper
notice. It is a severe action and should only be initiated after adequate
notice. Further information regarding Rent Attornment is provided within
this policy.
➢ Tax Sale Registration/Tax Sale
o Properties that are in arrears for two (2) years are eligible for tax
registration under the Municipal Act. The property owner or interested
party has one year from the date of registration in which to redeem the
property for all taxes, interest and penalty outstanding, including any
associated costs. A contracted tax registration firm may be used to
process the required statutory notices/declarations. The administration fee
associated with this process is in addition to charges by the third party firm
completing the required statutory notices/declarations and will be defined
in the Tariff of Fees By-Law for the Municipality.
o Registration is a last resort and should be avoided if possible by
encouraging the ratepayer to either make full payment or a mutually
agreed upon payment plan.
o It is imperative that the schedule for registration be adhered to. Letters
and correspondence should encourage payment. It is only as a last resort
or if numerous cheques are returned, that the property would become
subject to tax registration. Further information regarding tax sales is
provided within this policy.
➢ Additional Collection Tools
o The following additional tools are available to assist in the collection of
realty taxes:
- Reminder notices
- Form or personalized letters
- Telephone follow up after commitments made
- Interviews
- Title Searches - Interested Party Notification
7.0
Steps and Timing of Collection Procedure
➢ Interim tax billings are sent in January, Residential / Commercial Final tax billings
are sent in June subsequent to the passing of the Municipal Budget. Tax arrears
carry forward amounts are only included on the Interim tax billings.
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➢ Late payment charges are charged according to municipal By-Law.
➢ Reminder notices are sent on the 1st day of each month. Reminder notices for
$5.00 or less are not produced as well as credit reminder notices are not
produced.
➢ Any notice sent by ordinary mail is considered delivered to and received by the
addressee. Failure to notify the Tax Office of an address change in writing is not
an error. Section 343 of the Municipal Act identifies that tax bills shall be sent to
the taxpayer's residence or place of business or to the premises where the taxes
are payable for, unless the taxpayer directs the municipality otherwise. The
direction for the delivery of tax bills continues until it is revoked in writing by the
taxpayer (343(8)). It is the taxpayer's responsibility to provide the Township
with the correct mailing address.
➢ Priority of tax accounts for collection is:
o Tax accounts with two previous years outstanding
o Tax accounts with one previous year outstanding
o Tax accounts with current year only outstanding
➢ For tax accounts which indicate previous years taxes owing, a collection letter is
sent in the 1st quarter of the current year to the property owner(s) advising of the
tax arrears situation and asking for payment in full or satisfactory payment
arrangements to be made by a given date. If acceptable payment arrangements
are made, the account is monitored for compliance and follow up is done by
telephone or in writing as required. Telephone contact is only used when the
taxpayer has provided the municipality with a telephone number.
➢ Satisfactory payment arrangements would be a series of post dated cheques or a
commitment to make payments on prearranged dates via telephone or internet
banking or in person.
➢ If no reply is received within the timeline indicated in the collection letter:
o A report will be compiled by the Treasurer which will include
recommendations on which accounts to be forwarded for collection
outlined in this policy as well as a listing of accounts which have made
payment arrangements and/or commitments.
o Council will direct the Treasurer on what collection procedures will be
used.
o Any accounts included in the above report which, have made payment
arrangements and/or commitments and default on these arrangements will
be monitored by the Treasurer and will be sent to collection.
➢ A bailiff may be used if no reply has been received outlined in the collection letter
and Council agrees that these accounts will be forwarded onto bailiff collection
procedures. Costs associated to this action are the responsibility of the property
owner and are deducted by the bailiff, in accordance with legislation, prior to the
remittance of payment to the municipality.
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➢ Account(s) may be withdrawn from the bailiff if Council decides to withdraw it
and/or if Council decides that an account will be eligible under the Tax Sale
collection procedure.
➢ If rent attornment is chosen as a collection tool, the Treasurer will give notice to
the tenant(s) in writing requiring the tenant(s) to pay the rent normally paid to the
Landlord, to the Township as it becomes due, until the amount of taxes due and
any unpaid costs are paid in full.
➢ The tenant(s) are required by section 350(1) of the Municipal Act to comply with
this notice.
➢ The Treasurer has the same authority as the landlord of the premises to collect
the rent by seizure or otherwise to the amount of the taxes due and unpaid costs,
but by collecting the rent, the municipality does not assume the responsibilities of
the landlord.
➢ Amounts paid as a result of rent attornment, may be deducted by the tenant(s)
from the rent paid to the landlord.
9.0
Minimum Balance Write-off
➢ In some circumstance there remains a balance owing on a taxpayers account
after a payment is received, which is often a result of interest added to the
account after a payment amount was agreed upon and mailed in. When the
remaining amount is small enough that the additional cost of collection would not
be deemed worthwhile, it may be expedient to write the amount off. The
Township authorized the Treasurer to approve such write-offs for outstanding
amounts less than $10.00.
10.0 Late Payment Charge Adjustments
➢ Late payment charges are adjusted only in the following circumstances:
o Taxes are adjusted under sections 354, 357, 358 or 359 of the Municipal
Act
o Taxes are adjusted following an Assessment Review Board decision
o Taxes are adjusted in accordance with a decision of the Court(s)
o Taxes are adjusted under Minutes of Settlement or notification of any
assessment adjustment from MPAC.
o If interest and/or penalty was charged as a result of the Township's error
and/or omission. It shall be at the discretion of the Treasurer to decide
whether or not the interest and/or penalty amount should be adjusted in
such cases.