Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures

(City Council at its regular meeting held on October 3, 4 and 5, 2000, and its Special Meetings held on October 6, 2000, October 10 and 11, 2000, and October 12, 2000, adopted this Clause, without amendment.)

The Administration Committee recommends:

(1) that tax arrears information be publicly disclosed where the property is owned by a corporation;

(2) that Council adopt a policy to aggressively pursue industrial/commercial tax debtors who refuse to pay because of an outstanding appeal; (3) that the Chief Financial Officer and Treasurer be directed to make public, with the exception of the comments section, the confidential document entitled “Largest 20 Tax Debtors - Appendix A and Appendix B”; and that such document include a mailing address where one has not been identified; (4) the adoption of the report (June 7, 2000) from the Chief Financial Officer and Treasurer, entitled “Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures”, subject to:

(a) amending Recommendation No. (1) by adding thereto the following words “such report to identify what efforts have been made to collect taxes and if a bailiff has been used in the collection method; and report, in-camera, those properties owned by individuals”, so that Recommendation No. (1) now reads as follows:

“(1) The Chief Financial Officer and Treasurer report to Administration Committee on a quarterly basis identifying those properties with tax arrears of $500,000 or more, that are owned by a corporation (i.e., reports will be submitted identifying tax arrears of $500,000 or more as at March 31st, June 30th , September 30, December 31); such report to identify what efforts have been made to collect taxes and if a bailiff has been used in the collection method; and report, in-camera, those properties owned by individuals”; and

(b) striking out Recommendation No. (2);

(5) that the process used by the former City of Scarborough, as it applies to commercial, industrial and multi-residential properties, be adopted by the City of Toronto, save and except the issuance of final notices after interim installments, and the Chief Financial Officer and Treasurer be requested to submit a report thereon in one years’ time on the results of adopting this policy; (6) that the Chief Financial Officer and Treasurer be authorized to employ bailiffs at an earlier opportunity in the process;

(7) that the City Solicitor be requested to vigorously oppose the appeal to the OMB in support of the North York Committee of Adjustment decision to defer consideration of the application of the owner of 1000 Finch Avenue West; and be authorized to utilize any expertise that may be required in this regard if necessary; and

(8) that the Chief Financial Officer and Treasurer be requested to report to the Administration Committee in four months’ time respecting owner occupied residential property collection procedures, such report to be limited to no more than three pages.

The Administration Committee reports, for the information of Council, having requested the Chief Financial Officer and Treasurer to submit a report directly to Council for its meeting scheduled to be held on October 3, 2000, on the timetable and process to be utilized for the collection of taxes.

The Administration Committee submits the following report (June 7, 2000) from the Chief Financial Officer and Treasurer, entitled “Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures”:

Purpose:

To respond to a request of the Administration Committee with respect to the public disclosure of tax arrears information and a strategy to aggressively pursue industrial/commercial tax debtors.

Financial Implications:

N/A.

Recommendations:

It is recommended that:

(1) the Chief Financial Officer and Treasurer report to Administration Committee on a quarterly basis identifying those properties with tax arrears of $500,000 or more, that are owned by a corporation (i.e., reports will be submitted identifying tax arrears of $500,000 or more as at March 31st, June 30th, September 30, December 31); and

(2) the strategy described in this report regarding the collection process for industrial and/or commercial tax debtors be endorsed. Background:

At its meeting held May 16, 2000, the Administration Committee requested that:

(a) tax arrears information be publicly disclosed where the property is owned by a corporation; and the Chief Financial Officer and Treasurer, in consultation with the City Clerk and the City Solicitor, be requested to report on the implementation of this recommendation to the next meeting of the Administration Committee; and

(b) Council adopt a policy to aggressively pursue industrial/commercial tax debtors who refuse to pay because of an outstanding appeal; and the Chief Financial Officer and Treasurer be requested to report to the next meeting of the Administration Committee on a strategy in regard thereto.

Comments:

(a) Public Disclosure of Tax Arrears Information:

At its meeting held on May 16, 2000 the Administration Committee had before it a report (May 2, 2000) from the City Clerk on “Access Legislation and Tax Arrears Information”. All corporate records relating to tax arrears are subject to the Municipal Freedom of Information and Protection of Privacy Act (the Act) and may only be disclosed in accordance with the Act. Tax arrears information constitutes the financial information of the respective property owner(s). Consideration, therefore, must be given to individual privacy rights and potential harm to the financial and/or competitive positions of organizations and business entities. The Act also provides for the protection of information where disclosure would prejudice the City’s economic interests. The City has an economic interest in guarding against the potential harm to a business entity, which may be caused by disclosure of their tax arrears information. For instance, prospective tenants may walk away and existing leases may not be renewed. The consequent financial losses may result in a diminished capacity to pay tax arrears or meet negotiated payment schedules. The Act strictly prohibits the release of personal information, including tax arrears information, related to an individual person. With respect to a corporate or business entity, strict compliance with the Act is critical in building and maintaining public trust in the City.

Following consideration of the report from the City Clerk, “Access Legislation and Tax Arrears Information”, the Administration Committee directed the Chief Financial Officer and Treasurer, in consultation with the City Clerk and the City Solicitor, to report on a strategy for disclosing tax arrears information where the property is owned by a corporation.

If tax arrears information for properties owned by corporations is to be disclosed, the following strategy is recommended: (a) The Chief Financial Officer and Treasurer report to Administration Committee on a quarterly basis identifying those properties with tax arrears of $500,000 or more, that are owned by a corporation (i.e., reports will be submitted identifying tax arrears of $500,000 or more as at March 31, June 30, September 30, December 31); and

(b) The aforementioned report identify the property address, property classification, assessed address, mailing address; ownership information (corporations only), current years assessed value and outstanding property taxes.

The information included within the report will be subject to a Supervisor and Managers’ review in order to ensure all data is accurate. However, the inadvertent disclosure of inaccurate information could expose the City to legal liability. For example, where a debtor makes a payment at a financial institution on or about the reporting dates, we may be overstating the taxes receivable as payments made at financial institutions can take anywhere from 2-5 business days to be transmitted to the City. This payment will not be applied to the account until we receive the payment information from the financial institution. Furthermore, tax arrears information will be reported on as at a specified date and time, and may be the subject of outstanding assessment and/or tax appeals.

Staff from the City Solicitor’s office and City Clerk have been consulted on the recommended strategy of public disclosure of tax arrears information.

(b) Aggressive Collection Policy for Industrial/Commercial Tax Debtors:

With respect to business properties (commercial, industrial and multi-residential), the introduction of CVA and the elimination of business occupancy taxes in 1998 greatly enhances the City’s ability to collect its full share of property tax revenue.

Currently, the tax collection process has been in a transition period. Attention is being focussed on the collection of outstanding business taxes, and accounts are being forwarded to bailiffs and collection agencies to assist in the clean up of these outstanding business tax accounts. It is noted that the business occupancy tax (BOT) was eliminated in the taxation year 1998, with the implementation of Current Value Assessment (CVA). Based upon supplementary/omit assessment information received from the Ontario Property Assessment Corporation (OPAC), the City billed business occupancy taxes during 1998 and 1999 for businesses in operation in 1996 and 1997. Given that supplementary/omit assessments only go back a maximum of 2 years, we will no longer be billing business taxes effective this year. By September 2000, all outstanding business tax accounts will have been reviewed and will either continue to be collected upon by an internal revenue collector, or issued to a bailiff or collection agency.

Beginning immediately, future collection efforts will focus on the use of municipal tax sales proceedings as the most effective collection tool for realty taxes. Future collection efforts will include the continued production and mailing of tax arrears statements, automated collection letters based upon aged accounts receivable, and continued telephone contact with the taxpayers. Staff will also investigate the possible use of an automated phone call/messaging system that would be linked to our revenue system. The introduction of this new technology will facilitate the automatic calling of taxpayers with tax arrears to notify them of the arrears. Revenue collectors will continue to work with taxpayers on securing a firm repayment plan. In the case of properties that are tenanted, bailiffs will be used to attorn rents, particularly where outstanding taxes approach 50 percent or more of the assessed value of the property. If after three years the tax arrears are not cleared municipal tax sales proceedings will be commenced.

The use of the municipal tax sales proceedings, as prescribed in the Municipal Act and the Municipal Tax Sales Act, is a very effective and proven tool in the collection of realty taxes. Municipal tax sales proceedings can commence once taxes have been in arrears for three years (for lands with a building) or two years for vacant land. It is the Finance Department’s policy that tax sales proceedings are only commenced after all other collection efforts have been exhausted. If staff are unable to achieve payment or a firm, and suitable repayment plan to address the arrears of taxes, they proceed with the steps as outlined in the Municipal Tax Sales Act (the “Act”) to collect the tax arrears. The debtor has one year from the date of registration of a Tax Arrears Certificate on title of the property, to pay the cancellation price which includes all of the taxes levied, all accrued interest/penalties and costs. Failing payment within that year, or the entering into of an extension agreement, the Treasurer is required to proceed to a sale through a public auction or public tender of the property.

Revenue collectors will continue to monitor accounts with large tax arrears to ensure the outstanding taxes do not approach the CVA prior to the 3-year period when tax sales proceedings can commence. Bailiffs will be used to collect on those accounts where the taxes outstanding are greater than 50 percent of the CVA. Revenue collectors will also monitor properties under bankruptcy/receivership protection to ensure that the Trustee/Receiver is making regular payments on any tax arrears.

It is not uncommon for a taxpayer to be hesitant or even completely unwilling to pay their taxes when there is an outstanding pending appeal on their property. In many cases the taxpayer is adamant and actually refuses to make even a partial payment until their account reflects any changes the appeal would create. These appeals can be initiated pursuant to applicable sections under either the Municipal Act or the Assessment Act. Although a property may have a pending appeal, all taxes, penalty and interest are to be paid in full as levied. The fact that an appeal hearing has or has not been scheduled does not eliminate the liability for full payment of all taxes, penalties and interest.

Many owners of either industrial or commercial properties feel they should not have to pay their taxes until such time as the appeal hearing has reduced the property assessment and/or taxes. However, in accordance with the provisions of section 37 (6) of the Assessment Act, the taxes levied and payable with respect to the assessment shall be adjusted accordingly and any overpayment shall be refunded by the municipality. Therefore, simply stated, all taxes are due and payable as levied. Only upon receipt of a Notice of Decision can the municipality alter the assessed value of the property. Attempts will be made to resolve pending appeals, but if the taxpayer remains unwilling to pay the tax arrears, and where the revenue collector is unable to obtain a firm suitable repayment plan, the account, will be assigned to a bailiff for further collection activities. The bailiff will be issued a Warrant to Distrain for unpaid taxes in accordance with the provisions of section 400 (1) of the Municipal Act. The Revenue Division will continue to proceed with tax registrations for all commercial and industrial properties regardless of outstanding appeals.

On properties which have tax arrears of 2 ½ years or more, the Revenue Division will initiate preliminary steps of registration which may include requesting a title search from Legal Services and upon receipt of said title search, contact the mortgagee(s) appearing on title. Once the account is three years in arrears, failing firm payment arrangements, registration of a tax arrears certificate will occur.

In summary, the following strategies will be used in the collection of outstanding realty tax arrears for commercial and industrial properties, regardless of any unresolved/outstanding appeals:

(a) production and mailing of tax arrears notices/statements;

(b) production and mailing of collection letters;

(c) telephone contact with the taxpayer;

(d) meetings and discussions with the taxpayer to secure a firm repayment plan;

(e) bailiff services will be used in the case of tenanted properties to attorn rents

(f) bailiff services will also be used in cases where the outstanding taxes are under three years in arrears and are greater than 50 percent of the CVA of the property. Bailiff recovery methods include serving a warrant to the assessed address; mailing of notices to the owner of the property advising that a warrant has been issued and the amount of the warrant; telephone calls; title searches with contacts made to the mortgagee(s); and site visits to collect upon the debt and ultimately to seize the goods if payments are not made; and

(g) If after three years the tax arrears are not cleared, and there are no firm payment arrangements, municipal tax sale proceedings will be commenced.

Conclusion:

The Finance Department has a team of revenue collectors who actively pursue collection of outstanding receivables. Although a property may have a pending appeal, all taxes, penalty and interest are to be paid in full as levied. The fact that an appeal hearing has been scheduled does not eliminate the liability for full payment of all taxes, penalties and interest. Effective immediately, follow-up with the Assessment Review Board (ARB) for outstanding appeals will occur for all accounts with a balance of greater than $250,000. If there is a Notice of Decision, we will expedite resolving the status of an appeal. At the same time, we will continue to reach a firm repayment plan with the debtor, regardless of any outstanding appeals. Failing to reach mutually agreeable payment arrangements, the account will be issued to the bailiff pursuant to the Municipal Act.

On properties that have tax arrears of 2 ½ years or more, the Revenue Division will initiate preliminary steps of registration. Once the account is three years in arrears, the Revenue Division will start registration of a tax arrears certificate pursuant to the Municipal Tax Sales Act, regardless of any outstanding appeals.

Contact Names:

Giuliana Carbone, Director, Revenue Services Division Phone: (416) 392-8065; Fax: (416) 395-6811, Email: [email protected]

Margo L. Brunning, Manager Collections/Receivables, Payments and Regional Customer Service Phone: (416) 395-6789; Fax: (416) 395-6703; Email: [email protected]

The Administration Committee also submits the following report (June 28, 2000) from the Chief Financial Officer and Treasurer, entitled “Comparison of Current and Future Collection Strategies to those used by Former City of Scarborough”:

Purpose: To respond to a request of the Administration Committee requesting staff to review the collection practices of the former city of Scarborough and describe how the new City’s current and proposed collection strategies compare to those used by former Scarborough.

Financial Implications:

None.

Recommendation:

It is recommended that this report be received for information.

Background: At its meeting held on Tuesday June 13, 2000, the Administration Committee had before it a report (June 7, 2000) from the Chief Financial Officer and Treasurer entitled “Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures”. The Committee deferred consideration of this report and requested the Chief Financial Officer and Treasurer to review the collection practices of the former city of Scarborough and describe how the City’s current collection strategy, as described in the “Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures” report compares to those used by former Scarborough.

Comments:

Appendix A, attached, sets out the practices used by the former municipalities in the collection of tax arrears and the collection strategy for the new City.

(a) Former City of Scarborough Collection Practice:

With respect to realty taxes, the collection practices of the former city of Scarborough centred on the issuance of past due notices. A “Tax Reminder” notice (brown in colour) was issued in April, after the last instalment of the interim bill. A “Notice of Taxes Overdue” (green in colour) was issued in October, after the last instalment of the final bill. If there was no response to either of these notices, a “Final Notice” (red in colour) was issued in early November advising the taxpayer that they had 21 days to pay their taxes, or enter into a payment arrangement with the City, or their account would be issued to a bailiff for collection. All accounts that failed to respond to the “Final Notice”, were issued to the bailiff in January of the following year. This practice was followed for all property types (i.e., residential, commercial, industrial, multi-residential) whether they were owner or tenant occupied.

In the event that the bailiff was unsuccessful in their attempts to secure firm repayment arrangements, the bailiff would be authorized by the former City to either attorn the rent or seize any assets of the debtor such as vehicles, boats and motor homes.

Former Scarborough did not follow-up or initiate telephone contact with any debtor, relying solely on the issuance of past due notices. Payments arrangements would be entered into for debtors who contacted the former city of Scarborough tax office.

The former cities of East York and York followed similar collections practices to that used by Scarborough. In the mid-1990’s the former cities of Toronto, North York and Etobicoke discontinued issuing bailiff warrant to distrain for unpaid taxes on residential owner-occupied properties. Instead, internal revenue collectors would attempt to reach a firm suitable repayment arrangement by means of telephone contact, collection letters, meetings and site visits. Failing suitable repayment arrangements, and upon 2 ½ years tax arrears, the preliminary steps prior to tax sale proceedings would be initiated. The first step would be to request a title search and once received, the internal revenue collector would contact the mortgagee(s) appearing on title and inform them of the outstanding tax arrears. In most cases, once the mortgagee is made aware of the tax arrears, all outstanding taxes would be paid in full. If there are no mortgage(s) on listed on title or the interested parties are not willing to pay the tax arrears, once the account is three years in arrears, the registration process would proceed in accordance within the provisions of the Municipal Tax Sales Act. (b) Collection Strategies / Procedures for the New City:

The following reports from the Chief Financial Officer and Treasurer submitted to this Committee over the past few month outline the various collection strategies currently in place for dealing with tax arrears:

(i) “Update of Largest Tax Receivables, including 1000 Finch Avenue West” (March 17, 2000);

(ii) “Use of Bailiffs in the Collection of Taxes” (May 8, 2000);

(iii) “Public Disclosure of Tax Arrears Information and Strategy for Aggressive Collection Procedures” (June 7, 2000).

Currently the tax collection process is in a transition period. The business occupancy tax (BOT) was eliminated in the taxation year 1998, with the introduction of Current Value Assessment (CVA). Based on supplementary/omit assessment information received from the Ontario Property Assessment Corporation (OPAC), the City billed business occupancy taxes in 1998 and 1999 for businesses in operation in 1996 and 1997. Given that supplementary/omit assessments only go back a maximum of two years, we will no longer be billing business occupancy taxes effective this year.

Given that the City will only be billing realty taxes from 2000 onward, future collection efforts center on the use of bailiffs for all properties other than residential owner-occupied and the greater use of the municipal tax sales proceedings as prescribed in the Municipal Act and the Municipal Tax Sales Act.

Appendices B, C and D outline the collection strategies for the new City in dealing with tax arrears. Appendix B presents the procedures employed in the collection of realty tax arrears for owner-occupied residential properties. Appendix C sets out the procedures used in the collection of realty tax arrears for all properties other than owner-occupied residential properties. Appendix D outlines the procedures used in the collection of outstanding business occupancy taxes.

Bailiffs continue to play a key role in the collection of outstanding realty taxes, as well as outstanding business taxes, for all properties other than residential owner-occupied properties. Bailiff recovery methods include serving a warrant to the assessed address; mailing of notices to the owner of the property advising that a warrant has been issued and the amount of the warrant; telephone calls; title searches with contacts made to the mortgagee(s); and site visits to collect upon the debt and ultimately attornment of rent or seizure of goods if payments are not made.

In summary, the following strategies will be used in the collection of outstanding realty tax arrears for all properties other than residential owner-occupied, regardless of any unresolved/outstanding appeals: (a) production and mailing of tax arrears notices/statements;

(b) production and mailing of collection letters;

(c) telephone contact with the taxpayer;

(d) meetings and discussions with the taxpayer to secure a firm repayment plan;

(e) bailiff services will be used in the case of tenanted properties to attorn rent(s);

(f) bailiff services will also be used on owner occupied properties for seizure of goods or chattles;

(g) bailiff services will also be used in cases where the outstanding taxes are less than three years in arrears and the outstanding taxes are greater than 50 percent of the CVA of the property;

(h) If after three years the tax arrears are not cleared, and there are no firm payment arrangements, municipal tax sale proceedings will be commenced.

This practice is similar to that used by the former Scarborough. The key difference is that an overdue account is first assigned to an internal collector two weeks after the last instalment due date. At this time the collector issues a collection letter and statement of account, advising that taxes are past due and that payment in full or a series of post-dated cheques to clear the account is required. Failing to reach a suitable repayment plan, they will attempt to make contact by telephone for payment arrangements. If after 75 days, approximately end of November of each year, internal collection efforts (including a variety of letters, phone calls, site visits and meetings) fail to achieve a firm repayment plan, the debtor is advised in writing that a title search of the property will be conducted for the purpose of notifying all interested parties of the tax arrears. Internal collectors will continue with telephone calls, visits, meetings, etc. until such time as the title search information is received. After receipt of the title search, the internal collectors will contact the debtor one last time to advise that the title search is complete. If payment plans are not firmly secured, all mortgagees are immediately contacted. When it gets to this stage, often debtors will make suitable payment arrangements to avoid having their mortgage company contacted and advised of the tax arrears. Where there is no mortgage, bailiffs will be used and provided authorization to attorn rents and/or seize assets. If after three years the tax arrears are not cleared, and there are no firm payment arrangements in place, municipal tax sale proceedings will be commenced.

Current legislation provides that provides that three years of taxes can remain unpaid (with interest accumulating at 1.25 percent per month) for lands with a building, before municipal tax sales proceedings can begin. For vacant land, the municipal tax sales process begins when property taxes are three years in arrears. The City is “first in line” to collect its taxes owed on any property sold in this manner. To assess how much risk is associated with delinquent accounts that are three years in arrears, it is important to consider the following analysis:

Average 3 Years Taxes Average Tax Annual Accumulated Outstanding CVA Rate Taxes Tax Plus as a % of CVA Interest ( %) ( $ ) ( % ) ( $ ) ( $ ) Residential 220,000 1.213702 2,670 9,955 4.52 Commercial 2,000,000 7.510851 150,217 560,497 28.02 Industrial 2,000,000 10.293863 205,877 768,179 38.41

The conclusion is that the City’s interests in collection of realty taxes are extremely secure. In the extreme, if the City undertook no collection activity there is little or no risk of financial loss to the City. Even if CVA values are overstated by 25 percent to 50 percent, the City’s interests are secure.

Approximately 92 percent of properties in the City are residential homes. Given that the majority of residential homeowners pay their property taxes on time (96 percent), and given that the accumulated tax arrears on any given residential property, over a three year period, are small in comparison to the assessed value of the home, future collection efforts for these properties will focus on the continued automated production and mailing of tax arrears statements, automated collection letters based upon aged accounts receivable, and continued telephone contact with the taxpayers. Appendix B outlines the collection strategy used in the collection of owner-occupied residential properties. Work is currently underway in automating the production of collection letters. The project should be completed by the end of June 2000. Shortly thereafter, staff will investigate the possible use of an automated phone call/messaging system that would be linked to our revenue system. The introduction of this new technology will facilitate the automatic calling of taxpayers with tax arrears to notify them of the arrears. Revenue collectors will continue to work with taxpayers on securing a firm repayment plan. If after three years the taxes are not paid, municipal tax sales proceedings will be commenced.

It is the Finance Department’s policy that tax sales proceedings are only commenced after all other collection efforts have been exhausted. If staff are unable to achieve payment or a firm, suitable repayment plan to address the arrears of taxes, they proceed with the steps as outlined in the Municipal Tax Sales Act to collect the tax arrears. The debtor has one year from the date of registration of a Tax Arrears Certificate on title of the property, to pay the cancellation price which includes all of the taxes levied, all accrued interest/penalties and costs. Failing payment within that year, or the entering into of an extension agreement, the Treasurer is required to proceed to a sale through a public auction or public tender of the property. Conclusion:

The Finance Department has incorporated into its collection procedures, former Scarborough’s practice of issuing overdue notices and forwarding accounts to bailiffs. The key differences are:

(a) The Finance Department will not be issuing owner-occupied residential accounts to a bailiff; and

(b) Internal collection efforts, including telephone contact, collection letters, meetings, site visits and title searches, are used for commercial, industrial, multi-residential and tenanted residential properties, prior to the issuance of an account to a bailiff.

Only after failing to reach firm suitable payment arrangements, will an account be issued to the bailiff.

On properties that have tax arrears of 2 ½ years or more, the Finance Department will initiate the preliminary steps of tax registration. Once the account is three years in arrears, the Department will proceed with registration of a Tax Arrears Certificate on the property pursuant to the Municipal Tax Sales Act.

Contact Name:

Margo L. Brunning, Manager, Collections/Receivables, Payments and Regional Customer Service, Phone: (416) 395-6789, Fax: (416) 395-6703, Email: [email protected]

Giuliana Carbone, Director, Revenue Services Division, Phone: (416) 392-8065, Fax: (416) 395-6811, Email: [email protected]

(A copy of Appendices A and B attached to the foregoing report was forwarded to all Members of Council with the September 12, 2000, agenda of the Administration Committee and a copy thereof is on file in the office of the City Clerk.)

The Administration Committee also submits the following communication (June 12, 2000) from the City Clerk:

City Council at its meeting held on June 7, 8 and 9, 2000, had before it, Clause No. 6 of Report No. 13 of The Administration Committee, headed “Update on Largest Tax Receivables, Including 1000 Finch Avenue West”.

Council struck out and referred this Clause back to the Administration Committee for further consideration and to permit the Bailiffs an opportunity to address the Committee in this regard. (Clause No. 6 of Report No. 13 of The Administration Committee, entitled “Update on Largest Tax Receivables, Including 1000 Finch Avenue West.)

(City Council on June 7, 8 and 9, 2000, struck out and referred this Clause back to the Administration Committee for further consideration, and to permit the Bailiffs an opportunity to address the Committee in this regard.)

The Administration Committee recommends that:

(1) tax arrears information be publicly disclosed where the property is owned by a corporation; and the Chief Financial Officer and Treasurer, in consultation with the City Clerk and the City Solicitor, be requested to report on implementation of this recommendation to the next meeting of the Administration Committee;

(2) Council adopt a policy to aggressively pursue industrial/commercial tax debtors who refuse to pay because of an outstanding appeal; and the Chief Financial Officer and Treasurer be requested to report to the next meeting of the Administration Committee on a strategy in regard thereto; and

(3) the Chief Financial Officer and Treasurer be directed to make public, with the exception of the comments section, the confidential document entitled “Largest 20 Tax Debtors - Appendix A and Appendix B”; and that such document include a mailing address where one has not been identified.

The Administration Committee reports, for the information of Council, having received the following:

(i) joint confidential and public report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor, entitled “Update on Largest Tax Receivables, including 1000 Finch Avenue West”;

(ii) report (May 2, 2000) from the City Clerk, entitled “Access Legislation and Tax Arrears Information”; and

(iii) report (May 8, 2000) from the Chief Financial Officer and Treasurer, entitled “Use of Bailiffs in the Collection of Taxes”.

The Administration Committee submits the following joint report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor, entitled “Update on Largest Tax Receivables, including 1000 Finch Avenue West”:

Purpose:

To respond to a request of Council for a report on the status of the twenty (20) largest tax receivable accounts and on a variety of matters related to the tax arrears for the property located at 1000 Finch Avenue West. Financial Implications:

N/A.

Recommendation:

It is recommended that this report be received for information.

Background:

At its meeting held on February 29 to March 2, 2000, Council requested the Chief Financial Officer and Treasurer to report to the next Administration Committee on the:

(1) full chronology of events surrounding 1000 Finch Avenue West from the time of first delinquency to the present;

(2) areas in the collection process of 1000 Finch Avenue West where improvements could be made;

(3) current policy in collection efforts for outstanding taxes and the corrective action being taken to ensure that all the City’s tax receivables are secured and not at financial risk;

(4) outstanding tax arrears, penalties and interest and collection efforts connected therewith, identifying all those accounts in litigation; and

(5) status of the largest twenty (20) tax receivable accounts.

Comments:

At its meeting held on December 14, 1999 Council received a report dated November 22, 1999, from the Chief Financial Officer and Treasurer regarding the twenty (20) largest outstanding tax receivable accounts. The report also outlined the steps the City can take to reduce the balance of receivables, and provided an aged analysis of the receivables as at December 31, 1998, with a comparison to outstanding taxes as at October 31, 1999.

Appendix A provides the list of the largest 20 tax debtors as reported in the November 22, 1999, report from the Chief Financial Officer and Treasurer, with a comparison to the current taxes outstanding of the identified properties. The outstanding taxes for the 20 properties have decreased by over $27 million from October 7, 1999 ($67.9 million) to February 29, 2000 ($34.8 million).

Appendix B lists the 20 properties in the City with the largest outstanding taxes, of more than 1 year, as of February 29, 2000. The Municipal Freedom of Information and Protection of Privacy Act applies to the financial information of identifiable individuals and commercial entities. Accordingly, appendices A and B list the properties as 1 through 20 without reference to the identifying factors of name, property location or assessment roll number. All of the properties listed are “business” properties, most of which are in the “Commercial” property class.

Four of the 20 properties identified in Appendix B are contaminated properties. When a property is contaminated, the City pursues the recovery of the tax arrears however, the City does not normally register a Tax Arrears Certificate on title of the property because it does not want to run the chance of the property becoming vested in the City. If vested in the City, the City may very well have to assume the clean-up costs on the property, which can be quite significant depending on the level of contamination and could exceed the value of the property. Finance’s Development Policy and Research section, Legal and Economic Development are actively working on the development of a policy with respect to contaminated properties. We anticipate that this report will be forwarded to the Administration Committee at its meeting in May or June of 2000.

Appendix D is a condensed chronology of events surrounding 1000 Finch Avenue West.

Areas for Improvement:

The following points identify areas where improvements can be made in the collection process:

(1) Court Appointed Receivers and Court Orders Prohibiting Parties from Proceeding Against the Receiver/Manager or Property:

Often when a receiver/manager is appointed by court order of a debtor’s property, the Courts will issue an order that, among other things, prohibits any party from dealing with the property without first obtaining leave of the court.

In future, when the City is notified of a Court Order appointing a Receiver/Manager, Finance staff will review the tax account for the property in question. If there are outstanding taxes on the property, City Legal will be notified and a written communication will be forwarded to the Receiver/Manager advising of the outstanding taxes and reminding them that the City has a first priority lien on the property. A Revenue Collector will be assigned to monitor the status of the proceedings and to stay in regular contact with the Receiver/Manager.

If regular payments are not made by the Receiver/Manager against the tax arrears, and the tax arrears are approaching the CVA value of the property and are at least 30 months in arrears, Finance staff will request City Legal to initiate legal action to protect the City’s interest, which may include requesting leave of the Courts to issue a Tax Arrears Certificate against the property. If leave is granted, the City will proceed with pre-registration and registration of the Tax Arrears Certificate. (2) Receiver/Manager made Payments to a Secured Creditor, instead of the City:

As mentioned above, once the City is notified of a Court Order regarding receivership of a property, steps will be taken to notify the Receiver/Manager that the City has a first priority lien on the property.

In addition to the improvements described under point “1” above, City Legal and Finance staff will work together to ensure that the City is kept informed of all payments being made by the Receiver/Manager with the intention of ensuring that taxes are paid first. The Revenue Collector monitoring the account will be in regular contact with the Receiver/Manager. If payments cease to be made to the City by the Receiver/Manager, or substantially decrease, Finance staff will follow-up with both the Receiver/Manager, and if required, notify and involve City Legal.

Finance staff are currently in the process of reviewing all known property accounts that are in receivership (i.e., properties that have a Court Order prohibiting any party from dealing with the property) and have outstanding taxes. There are currently 37 realty accounts with a total outstanding value of approximately $106,742.00 which, have filed in accordance with the Bankruptcy and Insolvency Act in 1999. Only one of these accounts has tax arrears of more than three years, as such, has recently been sold by the mortgagee under the power of sale. Revenue Services is currently developing a report in order to determine the CVA to tax ratio of all realty accounts which have filed either Bankruptcies, Receiverships and (C.C.A.A.) Companies Creditors Arrangement Act. Once this report has been completed, any account which has a CVA to tax ratio greater than 70 percent will be given to Legal Services in order to attempt to obtain a leave of court. In the event leave is granted, the City will pursue collections by either internal Revenue Collector, Bailiff or tax sale procedure. Finance staff will be working with City Legal to ensure that the new processes outlined in points 1 and 2 are applied to these accounts.

(3) Follow-up between Finance and Legal to ensure that Tax Arrears Certificates and Title Searches are completed in a timely manner:

Finance staff, in consultation with City Legal, are in the process of implementing an automated tracking system for follow-up of accounts where registration documents were prepared and sent to Legal.

A review confirms that there are currently no situations similar to 1000 Finch Avenue West, where a Tax Arrears Certificate has been registered on title to a property, where we are approaching the 60 day limitation for notifying parties and have not received the title search information.

Collection Procedures – Realty Taxes:

The City of Toronto, Revenue Services Division of the Finance Department employs approximately 20 revenue collectors who handle the collection of tax, water and other accounts receivables which have been added to the tax rolls. Throughout the year, after each tax installment due date has past, all accounts greater than $5,000 are reviewed by a supervisor for collection action. With respect to realty taxes, collection efforts include, but are not limited to, the following:

(i) Assignment to an internal revenue collector five days after an installment due date for accounts greater than $5,000. Revenue Collectors contact the taxpayer by telephone and/or letter to arrange suitable firm payment arrangements. There are at least three calls placed and one letter sent within a 2-month period.

(ii) Scheduled meetings with the taxpayer(s) if there is no response to letters or phone calls.

(iii) Property title search and contact with interested parties on title (e.g., Mortgagee) when no firm, suitable payment arrangements are obtained within three months of assignment to collector. Upon receipt of the title search further attempts to collect by making at least two more telephone calls within the next 30 days prior to notifying all interested parties.

(iv) Business properties (Commercial, Industrial and Multi-Residential) where no suitable payment plan is successfully arranged are issued to a Bailiff, pursuant to section 400 (1) of the Municipal Act. When firm payment arrangements are not successful, a final notice letter is mailed, giving 14 days to make arrangements, or account will be issued to the bailiff. If the Bailiff is unsuccessful in the recovery of taxes, a Notice of Attornment of Rent is issued pursuant to section 384 (1) of the Municipal Act. A rent attornment letter is given when the bailiff is unsuccessful in seizing goods and chattels.

Revenue Services completed a Request for Proposal for Bailiff Services on June 23, 1999. In preparation for the RFP, Revenue Services conducted a survey of former municipalities’ collection policies and procedures. The results of the survey indicated that former municipalities’ bailiff collection practices varied with respect to residential owner occupied properties. While most former municipalities did not use a bailiff for residential owner occupied properties, others used a bailiff and even proceeded with the seizure of personal properties such as vehicles. Although section 400 (1) of the Municipal Act does permit the municipalities use of a bailiff for residential owner occupied properties, most municipalities did not favour this practice because of the additional burden on the taxpayer for the bailiff costs. Currently, Revenue Services does not use a bailiff for residential owner occupied properties.

Appendices E and F provide a flowchart of the various steps taken to collect on realty tax arrears, prior to registration of a Tax Arrears Certificate. Appendix E pertains to owner-occupied properties and Appendix F to tenanted properties.

In the case of realty taxes, municipal tax sales proceedings can commence once taxes have been in arrears for three years (for lands with a building) or two years for vacant land. It is the Finance Department’s policy that tax sales proceedings are only commenced after all other collection efforts have been exhausted. If staff are unable to achieve payment or a firm, and suitable repayment plan to address the arrears of taxes, they proceed with the steps as outlined in the Municipal Tax Sales Act (the “Act”) to collect the tax arrears. The debtor has one year from the date of registration of a Tax Arrears Certificate on title of the property, to pay the cancellation price which includes all of the taxes levied, all accrued interest/penalties and costs. Failing payment within that year, or the entering into of an extension agreement, the Treasurer is required to proceed to a sale through a public auction or public tender of the property.

There are currently 5 properties (identified in the chart below) where there has been a Tax Arrears Certificate registered on title to the property and the one year period for paying the Cancellation Price has not expired. There are approximately 1,291 accounts that are in a position to be registered as of January 1, 2000. Title searches have been requested, but are still outstanding on 380 of these properties. The balance of accounts (911) either have a firm suitable payment arrangement or are still negotiating for a firm suitable payment arrangement. Again, it is the policy that tax sale proceedings are only commenced after all other collection efforts have been exhausted. Upon receipt of the title searches, we will advise the debtor, as a final attempt to collect, that we will notify all interested parties of the arrears of taxes if a firm suitable repayment plan is not made by mid year. There are no outstanding title search requests where a Tax Arrears Certificate has been registered.

Tax Sales Registration – Tax Arrears Registered Properties Property Interest to Certificate File No. Years Taxes March 31/00 Total Expiry Date 99-1 1994 – 2000 $ 23,250.51 $ 11,307.85 $ 34,558.36 April 28, 2000 99-2 1993 – 2000 $ 373,102.97 $ 112,777.37 $ 3,186,421.38 May 20, 2000 99-3 1995 – 2000 $1,644,067.44 $ 502,515.62 $ 2,146,583.06 December 20, 2000 00-1 1994 – 2000 $ 7,920.46 $ 3,061.31 $ 10,981.77 February 16, 2001 00-2 1994 – 2000 $7,655,926.53 $2,753,550.38 $10,409,476.91 March 3, 2001

Past experience of accounts that are in a position of registration indicates the following:

(i) Approximately 75 percent pay or make firm suitable re-payment plans;

(ii) 75 percent of the remaining accounts, pay within the one year period; and

(iii) the balance, would proceed to sale one year from registration.

The following is a summary of the steps taken prior to registration of an account and throughout the registration process:

(1) Finance manager review the account to ensure all collection efforts have been exhausted;

(2) Finance staff request a search of title of the property from Legal Services;

(3) Finance prepares a Tax Arrears Certificate, signs it and forwards it to Legal Services; (4) Legal registers the Tax Arrears Certificate on title at the Lands Registry Office. The Land Registry Office assigns and stamps an instrument number on the Tax Arrears Certificate. Legal undertakes a full title search to determine all parties entitled to be served with notice;

(5) Legal returns a copy of the registered Tax Arrears Certificate to Finance together with detailed listings of the parties to be served and required addresses. Normally this certificate is returned to Finance within three weeks;

(6) Finance prepares and mails a Notice of Registration to owner(s) and all interested parties advising them that the property is registered, what the instrument number is, and what the expiry date for paying outstanding taxes is (expiry date is 12 months from the date of registration). These notices must be sent to all interested parties within 60 days of the date of registration of the Tax Arrears Certificate;

(7) Finance prepares, sends to Legal to register the statutory declaration (verifies that step 6 above was completed);

(8) within 30 days, after 280 days from the date of registration of the Tax Arrears Certificate, Finance sends a final notice to all interested parties;

(9) Finance prepares and executes a statutory declaration, which does not need to be registered, (verifies that step 8 above was completed);

(10) if payment is received, Finance prepares and executes a Tax Arrears Cancellation Certificate;

(11) if payment is not received within the year, Finance prepares an advertisement for sale of property, by tender; and

(12) tender opening is held. If there is a successful tender/purchaser, a tax deed is prepared and registered. If there is no successful tender/ purchaser, the property vests in the City.

Additionally, although not prescribed by legislation, staff sometimes attends at the property to try to speak with the owner or to determine the whereabouts and situation of the owner. A notice is left at the premises advising of the visit, who to contact, and of next steps the City intends to take. At the time of attendance, if staff is able to talk to the debtor, they advise of the next steps that will be taken if no suitable payment arrangements are made. In addition, they observe the property by looking for any environmental concerns. Proceedings under the Act are reviewed carefully by senior finance staff.

Furthermore, taxpayers suffering from personal financial difficulties are referred to a non-profit credit counselling service. The industry standard for such credit counselling is usually free for their first visit and an average charge of 10 percent if debt consolidation and advice is required. Collection Procedures – Business Taxes:

It is noted that business taxes were eliminated in the taxation year 1998, with the implementation of Current Value Assessment (CVA). We have billed businesses based upon supplementary/omit assessment information provided to the City by the Ontario Property Assessment Corporation (OPAC), during 1998 and 1999 for their period of operation in 1996 and 1997. For the tax years 1996 and 1997, Revenue Service Division billed in 1998 and 1999 $23,657,347.10 and $270,540.57 respectively. We will no longer be billing business taxes but are collecting upon them still as follows:

(i) Assignment to an internal revenue collector five days after an instalment due date for accounts greater than $1,000. Revenue Collectors contact the taxpayer by telephone and/or letter to arrange suitable firm payment arrangements. There are at least two calls placed and 1 letter sent within a 1-month period.

(ii) Scheduled meetings with the taxpayer(s) if there is no response to letters or phone calls.

(iii) Review account with supervisor to ensure that all actions have been done, to determine if bailiff action is necessary. The account is then issued to the bailiff in accordance with the Municipal Act to distrain against the goods and chattels of the business.

(iv) In the case of Business Occupancy Taxes, if a Bailiff is unable to make suitable payment arrangements, they may be instructed to serve a Notice of Seizure of goods and chattels. In the event that the business leaves the assessed address, the account is assigned to an external Collection Agency for skip trace collection methods.

Currently, there are approximately 2,700 accounts (558 for approximately $3.3 million with the bailiffs and 2,138 for approximately $6.5 million with collection agencies) that have been assigned to either a bailiff or collection agency to collect the realty or business taxes of the City. The costs associated with the bailiff are added to the warrant and are an expense of the debtor.

Costs for accounts collected through a collection agency are an expense to the City. The fee is 25 percent and is based upon a percentage of the monies received. Therefore, the accounts issued to a collection agency are where the bailiff has been unable to collect the taxes and/or the business has vacated the premises and skip tracing is required.

Business Occupancy Taxes arrears are recovered by the usual means of Revenue Collector telephone calls, mailing collection letters, final notices and the use of bailiffs and collection agencies. However, in some circumstances the businesses have no goods or chattels of any value and therefore the bailiff is unable to recover by seizure of said goods and chattels. If the amount of the tax arrears is sufficient to warrant the use of City Legal, the account information is sent to City Legal to obtain a Judgement from the courts for the repayment of taxes. In essence the fact that the judgement is filed against the business, does not ensure that the balance will be paid. Currently there are approximately 85 accounts with City Legal representing outstanding business taxes and interest in the amount of approximately $3.0 million. Once a judgement is obtained against the business, Legal Services pursues the collection of the taxes. On occasion, Legal Services suggest settlement offers which result in a portion of the taxes being deemed uncollectable and therefore, these taxes will be recommended by Finance to Council for write-off later in the year. Currently there is only one realty account with Legal Services actively pursuing litigation.

Appendix G provides a flowchart of the various steps taken to collect on business tax arrears.

Strategies to Improve Collections:

It must be noted that since amalgamation, the Revenue Services Division has largely been focused on amalgamation related issues and those related to the implementation of the Current Value Assessment system. During 1998, the focus was on conversion to a unified tax system, development of consistent tax policies, particularly regarding Current Value Assessment and establishment of an appropriate structure for the Division. The selection process for management staff was not completed until October of that year. During the early part of 1999, staff were engaged in the creation of a new tax bill and on ensuring that the calculations identified on the bill were accurate and consistent with Council’s policies re: phase-in and capping. Also, it soon became apparent that a significant backlog in appeals processing needed to be addressed. This backlog was partly due to appeals that had not been processed in the former municipalities and an increase in appeals resulting from CVA. Also, under pressure was the Revenue Services Call Centre, which was not staffed to deal with the many calls, pertaining to CVA and phase-in and capping. Staff from all areas of the Division and in particular Collections was redeployed to help with customer calls during the billing periods. Finally, the later part of 1999 was dedicated to the implementation of a unified water billing system that was Y2K compliant. The centralization of Collection staff was not completed until December of 1999.

In a recent study conducted, Revenue Services have found that most former municipalities did not have automated methods of collections and all required human intervention. Notices, letters and other correspondence were processed either on a mainframe network by systems support staff or manually on an individual basis in WordPerfect. The current tax system has the capabilities of numerous automated collection tasks. The current tax system is capable of providing reports, generating letters, making notes and various other functions. With the newly enhanced recommendations and the implementation included within this report, the collections process will be streamlined and thus more effective and cost efficient.

We are currently in the process of implementing the feature of automated collection letters, with the intent of reducing staff time associated with producing same, so they will therefore be able to concentrate their efforts on calling and meeting with our delinquent customers to bring about firm, suitable repayment plans that are mutually beneficial. In addition, we are reviewing our collection strategies to determine which is most beneficial based upon the age of the receivable, the dollar amount outstanding, or the type of collector handling the account (i.e., bailiff, collection agency or legal).

It is our belief that customers come to us to assist them in finding solutions to their financial hardships. Our collectors must be understanding of the various situations that bring about taxpayer financial difficulties. Staff review delinquent accounts and work with taxpayers in establishing a suitable payment plan, which addresses the taxpayer’s current situation and enables the City to collect its revenue over a reasonable period of time. A reasonable repayment plan is suggested with the goal of having all taxes paid up-to-date within a time period, with consideration given to the dollars owed and number of years involved. Other payment options are discussed, such as our pre-authorized payment plans, paying taxes through their mortgage company or reverse mortgages, where appropriate.

Based upon legislation and by-laws, we add a penalty/interest charge of 1.25 percent per month on the first day of default of payment and on each subsequent month until the taxes are paid, thus ensuring that the City is not out of pocket when taxes continue to be unpaid.

In addition to the improvements discussed under the section headed “Areas for Improvement”, the Finance Department had identified in the approved 2000 – 2005 Capital Works Program submission, additional improvements in its collection procedures and systems as follows:

(i) Use the systems automated letter process for collectors – this would allow collectors the ability to request letters online that would be automatically generated, sent to the customer, and a note entered on the file.

(ii) Use the systems electronic work queues i.e., tickler system – this would allow collection staff the ability to work online and provide management with the tools to automate processes and provide management the ability to track collector performance by reviewing at least weekly their account activity and items not dealt with.

(iii) Review aged accounts – Based upon the age and activities on the accounts, the various collection letters, notices, search requests, etc would be automatically generated. In addition, accounts could automatically move to the Pre-Registration work queue after 2 ½ years of taxes owing.

(iv) Reporting – Utilize additional developed reports, which will identify areas that require attention or further action. These will include but are not limited to reports which:

(a) identify tax accounts receivable of greater than a specified dollar value, such as $250,000, but which is flexible enough to accommodate any value;

(b) age the accounts receivable, by tax year, to ensure accounts move into the pre-registration status once the taxes outstanding reach 2 1/2 years;

(c) compare the taxes outstanding to the CVA value of a property and highlight those accounts where the taxes are approaching a certain percentage of the CVA (i.e., debt/equity ratio). In fact, this report has already been generated and considered by staff. The report identifies that there are 45 accounts where this appears to be the case. Staff are aware of the particular circumstances which pertain to each account and are making every effort to resolve all issues. (v) Utilize more extensively Third Party Management – automatic assignment and recall of accounts to either a Bailiff or Collection Agency based on Management –defined parameters.

(vi) Develop Promise Payment Tracking – develop a module in the system that would allow collectors to enter payment arrangements and the system would automatically follow up on these terms. The system would monitor the promise on a daily basis until the promise is kept or broken.

(vii) Implement Performance Management – Review Department and Collector performance on a monthly basis to identify areas of improvement, improve efficiency and effectiveness, and reduce costs. This would be accomplished by creating benchmarks and standards in order to reward or train staff accordingly. Develop a parameter that would automatically transfer accounts to a Supervisor work queue once accounts reach a certain stage i.e., No activity in 30 days.

(viii) Accounts greater than $250,000 – assign these accounts to a Senior internal collector to ensure the accounts are prioritized and reviewed on a consistent basis. A weekly, bi-weekly, and/or monthly meeting would be held with the Supervisor. In addition, a monthly report would be generated to the Manager detailing activity on the accounts.

Aged Receivables Analysis:

Finance is finalizing its year-end analysis of the 1999 financial records. A full analysis of the aged receivables for tax will be submitted at the April Administration Committee, once the year-end financial statements are finalized.

Conclusion:

The Finance Department has a team of revenue collectors who actively pursue collection of outstanding receivables. In the case of property taxes, the Municipal Tax Sales Act stipulates that tax sale proceedings can commence once taxes have been in arrears for any part of three years (for land with a building) or two years for vacant land.

Efforts are being focused on continued improvements to our collection methods, including automation of our collection letters; review of collection strategies; and expansion of technologies to automate current manual functions. This will enable staff to focus their efforts and expertise on informing our customers of the implications of delinquent accounts and negotiating mutually acceptable payment plans.

A number of improvements have been identified in this report, and will be implemented over the next few weeks. Staff will continually review and enhance collection efforts to ensure that the City’s financial interests are preserved. Contact Name:

Giuliana Carbone, Director, Revenue Services Division, Phone: (416) 392-8065, Fax: (416) 395-6811.

(A copy of the Appendices referred to in the foregoing report was forwarded to all Members of Council with the May 16, 2000, agenda of the Administration Committee, and a copy thereof is also on file in the office of the City Clerk.)

The Administration Committee also submits the following report (May 2, 2000) from the City Clerk, entitled “Access Legislation and Tax Arrears Information”:

Purpose:

To advise the Administration Committee with respect to disclosure of tax arrears information in a manner consistent with the Municipal Freedom of Information and Protection of Privacy Act.

Financial Implications and Impact Statement:

There are no municipal costs associated with the matter.

Recommendation:

It is recommended that this report be received for information.

Background:

All corporate records relating to tax arrears are subject to the Municipal Freedom of Information and Protection of Privacy Act (the Act) and may only be disclosed in accordance with the Act. Tax arrears information constitutes the financial information of the respective property owner(s). Consideration, therefore, must be given to individual privacy rights and potential harms to the financial and/or competitive positions of organizations and business entities.

The Act also provides for the protection of information where disclosure would prejudice the City’s economic interests. The City has an economic interest in guarding against the potential harm to a business entity which may be caused by disclosure of their tax arrears information. For instance, prospective tenants may walk away and existing leases may not be renewed. The consequent financial losses may result in a diminished capacity to pay tax arrears or meet negotiated payment schedules. For the above noted reasons, tax arrears information is provided to Members of Council in confidence.

When a request for tax arrears information is received, compliance with the detailed requirements of the legislation is required. The Act provides for balancing the competing interests of requesters and third parties through statutory notification processes. Affected third parties are given notice of the request and an opportunity to consent to disclosure. Should consent not be forthcoming, third parties have 21 calendar days to make written representations as to the reasons they believe disclosure would contravene the Act. Within 10 days of receiving and considering these representations, a written decision on disclosure must be provided to the requester and third parties. Should any party not agree with any aspect of the decision, they have 30 days to apply to the Information and Privacy Commissioner/Ontario for an independent adjudication of the access decision. Following appeals processes, an Order disposing of the matter is then issued.

Conclusion:

The Municipal Freedom of Information and Protection of Privacy Act requires a high standard of professionalism in the management of personal and financial information belonging to the citizens of Toronto. Compliance with these standards is central to building and maintaining public trust in the City. Accordingly, tax arrears information necessary to the review and deliberation processes of Committee and Council is provided in confidence. The rights of both requesters and affected parties under access legislation related to tax arrears information are respected through compliance with statutory notification and decision making processes under the Act.

Contact Name:

Rita Reynolds, Director of Corporate Access and Privacy, 392-9683.

The Administration Committee also submits the following report (May 8, 2000) from the Chief Financial Officer and Treasurer, entitled “Use of Bailiffs in the Collection of Taxes”:

Purpose:

To respond to a request of Administration Committee for a report on the use of bailiffs.

Financial Implications:

N/A.

Recommendation:

It is recommended that this report be received for information.

Background:

At its meeting held on March 21, 2000, the Administration Committee requested the Chief Financial Officer and Treasurer to report on the use of bailiffs.

At its meeting held on March 21, 2000 the Administration Committee had before it a confidential report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor providing an update on the largest tax receivables. Included in that report is a section which describes in detail the procedures used in the collection of realty and business occupancy taxes. The City of Toronto bills approximately 579,000 property tax accounts per year (541,000 residential and multi-use properties, and 38,000 pure commercial, industrial and multi-residential properties). In 1999, the total of all billings was $4.5 billion (City plus Education) of which 96 percent was collected by the end of the calendar year, leaving $185.7 million, excluding current year’s interest and fees, as the current receivables. The City share of 1999 billings was $2.5 billion. This is the amount that balanced the City’s 1999 Operating Budget i.e., revenues equalled expenditures. As taxes are collected, the cash is used to pay the City’s expenditures. At the end of 1999, the amount not collected incurred penalty and interest to compensate the City for cash flow deficiencies. Collecting prior years taxes outstanding therefore does not “balance” a current year’s budget.

Appendix A provides an aged analysis of outstanding property taxes (business and realty) as at December 31, 1999 with a comparison to 1998. Taxes receivables include all accrued interest/penalties, fees, adjustments and other charges added to the roll. The receivables also include any credit balances as a result of overpayments and appeals. It is noted that the business occupancy tax (BOT) was eliminated in the taxation year 1998, with the implementation of Current Value Assessment (CVA). Based upon supplementary/omit assessment information received from the Ontario Property Assessment Corporation (OPAC), the City billed business occupancy taxes during 1998 and 1999 for businesses in operation in 1996 and 1997. Given that supplementary/omit assessments only go back a maximum of two years, we will no longer be billing business taxes effective this year.

Context:

In assessing the risk associated with collecting property taxes, it is important to have the proper context. As noted, on a go forward basis, the City will only be billing realty taxes. Current legislation provides that three years of taxes can remain unpaid (with interest accumulating at 1.25 percent per month) for lands with a building, before municipal tax sales proceedings can begin. For vacant land, the municipal tax sales process begins when property taxes are two years in arrears.

The City is “first in line” to collect its taxes owed on any property sold in this manner. To assess how much risk is associated with delinquent accounts that are three years in arrears, it is important to consider the following analysis:

Average 3 Years Taxes Average Tax Annual Accumulated Outstanding CVA Rate Taxes Tax Plus as a % of ( $ ) ( % ) ( $ ) Interest ( $ ) CVA ( %) Residential 220,000 1.213702 2,670 9,955 4.52 Commercial 2,000,000 7.510851 150,217 560,497 28.02 Industrial 2,000,000 10.293863 205,877 768,179 38.41 The conclusion is that the City’s interests in collection of realty taxes are extremely secure. In the extreme, if the City undertook no collection activity there is little or no risk of financial loss to the City. Even if CVA values are overstated by 25 percent to 50 percent, the City’s interests are secure.

It should also be noted that beginning in the taxation year 2004, the Ontario Property Assessment Corporation will provide the City with annual assessment updates. For 1998, 1999 and 2000, assessments have been based on market values as at June 30, 1996. For taxation year 2001 we will be receiving new values based on June 30, 1999. By 2004 assessed values will be updated annually, based on market values as at June 30 of the previous year (e.g., For the 2004 taxation year, assessed values will be based on market values as at June 30, 2003). Beginning in 2006, annual assessment updates will be an average of market values on June 30 of the three previous years (e.g., for the taxation year 2006, assessed value is the average of market value on June 30, 2005, 2004, 2003).

Vision 2001:

Currently, the tax collection process is in a transition period. Attention is being focussed on the collection of outstanding business taxes, and accounts are being forwarded to bailiffs and collections agencies to assist in the clean up of these outstanding business tax accounts.

Given that on a go forward basis the City will only be billing realty taxes, our vision for future collection efforts center around the greater use of the municipal tax sales proceedings. As noted above, municipal tax sales proceedings as prescribed in the Municipal Act and the Municipal Tax Sales Act, are a very effective and proven tool in the collection of realty taxes.

Approximately 92 percent of properties in the City are residential homes. Given that the majority of residential homeowners pay their property taxes on time (96 percent), and given that the accumulated tax arrears on any given residential property, over a three year period, are small in comparison to the assessed value of the home, future collection efforts for these properties will focus on the continued automated production and mailing of tax arrears statements, automated collection letters based upon aged accounts receivable, and continued telephone contact with the taxpayers. Work is currently underway in automating the production of collection letters. The project should be completed by the end of June 2000. Shortly thereafter, staff will investigate the possible use of an automated phone call/messaging system that would be linked to our revenue system. The introduction of this new technology will facilitate the automatic calling of taxpayers with tax arrears to notify them of the arrears. Revenue collectors will continue to work with taxpayers on securing a firm repayment plan. If after three years the taxes are not paid, municipal tax sales proceedings will be commenced.

With respect to business properties (commercial, industrial and multi-residential), the introduction of CVA and the elimination of business occupancy taxes in 1998 greatly enhances the City’s ability to collect its full share of property tax revenue. Once the outstanding business occupancy tax accounts are cleared, future collection efforts will focus on the use of municipal tax sales proceedings as the most effective collection tool for realty taxes. Future collection efforts will be similar to those described in the above paragraph – automatic production and mailing of tax arrears statements and collection letters, telephone contact, meetings with the taxpayer and the possible use of an automatic phone call/messaging system. In the case of properties that are tenanted, bailiffs may be used to attorned rents, particularly where outstanding taxes approach 50 percent or more of the assessed value of the property. If after three years the tax arrears are not cleared municipal tax sales proceedings will be commenced. Revenue collectors will continue to monitor accounts with large tax arrears to ensure the outstanding taxes do not approach the CVA prior to the 3-year period when tax sales proceedings can commence. Bailiffs will be used to collect on those accounts where the taxes outstanding are greater than 50 percent to 60 percent of the CVA. Revenue collectors will also monitor properties under bankruptcy/receivership protection to ensure that the Trustee/Receiver is making regular payments on any tax arrears.

Collection Assignments:

The City of Toronto, Revenue Services Division of the Finance Department employs 20 revenue collectors who handle the collection of tax, water and other account receivables, which have been added to the tax rolls. Throughout the year after each tax instalment due date has past, all accounts greater than $5,000 are reviewed by a supervisor for collection action. Collection efforts include, but are not limited to, assignment to an internal collector, contact with the taxpayer by phone, letter, and/or scheduled meetings; property title search and contact with interested parties on title, assignment to collection agencies and bailiffs. Appendices B and C flowchart the various steps currently taken to collect realty tax arrears prior to the registration of a Tax Arrears Certificate. Appendix D flowcharts the steps taken to collect on business occupancy tax (BOT) arrears. A more detailed description of collection procedures is contained in the confidential report dated March 17, 2000 from the Chief Financial Officer and Treasurer, entitled “Update on Largest Tax Receivables, Including 1000 Finch Avenue West”.

The current assignment of realty and business taxes receivable for collection, as at April 28, 2000, is as follows:

Realty Tax Accounts (as at April 28, 2000) Commercial, Industrial, Residential Multi-Residential $ Value $ Value No. Accounts (Million) No. Accounts (Million) Internal Collector 3,536 22.8 2,156 116.0 Bailiffs 20 .2 94 1.7 Collection Agency 1 .003 1 .006 Unassigned 21,753 36.4 5,517 41.7 Total 25,310 59.4 7,768 159.4 Business Tax Accounts (as at April 28, 2000) No. of Accounts $ Value (million) Internal Collector 1,730 $ 12.8 Bailiffs 762 $ 3.6 Collection Agency 3,161 $ 13.4 Under Review ** 2,747 $ 13.3 Total 8,400 $ 43.1

** Being reviewed to determine whether or not the business is still operating and if there are any outstanding appeals on the account. Review to be completed within two to three months and will either continue to be collected upon by internal revenue collector, or issued to a bailiff or collection agency.

A Request for Proposal (RFP) for bailiff services was completed in June 1999. On June 23, 1999 three (3) bailiffs were awarded contracts: S. Wilson & Co. Bailiffs Limited; P.D. Merrell Bailiffs Inc.; and A.O. Shingler & Company Ltd. for a period of two years.

After all internal collection efforts have been exhausted, including but not limited to, telephone calls, letters, meetings and title searches, an account is issued to the bailiff. The city can issue an account to the bailiff when the instalment due is 21 days past the due date. In actual fact, it is only after internal collectors have exhausted all collection efforts, which is approximately four months past the last instalment due date, that the account would be issued to the bailiff. If the bailiff is unsuccessful in a repayment plan, a rent attornment authorization is provided. For business tax arrears, authorization for seizing of goods and chattels is also provided once all efforts are exhausted in the collection of the arrears.

Bailiff tax recovery methods include:

(i) serving a Warrant to the assessed address (either the business address or municipal address);

(ii) mailing of notices to the owner of the property advising that a warrant has been issued and the amount of the warrant;

(iii) telephone calls;

(iv) title searches with contacts made to the mortgagee(s);

(v) site visits to collect upon the debt and ultimately to seize the goods if payments are not made.

When an account is issued to the bailiff, the additional cost of approximately 8 percent of the amount of the warrant issued (i.e., taxes and penalty/interest) is added to the warrant, and is an expense of the debtor/taxpayer and not of the City (see sample in chart listed below). If an account is recalled for any reason, such as issued in error, the expenses incurred are the liability of the City.

Bailiff Cost Sample Total Tax + Pen/Int. 8% Fee Subtotal GST Total Warrant $1,000.00 $80.00 $1,080.00 $75.60 $1,155.60

The fees added by the bailiff are only recoverable based upon the payment(s) made. For example, if the payment is for 50 percent of the original warrant, the fees recovered by the bailiff are 50 percent of their original fee. The City is remitted the net amount of the payment, after the applicable fees are taken.

Once an account is with the bailiff and the warrant has been properly served (i.e., the bailiff has distrained upon the goods and chattels), the taxpayer can remit payment to the City or directly to the Bailiff. In the event that the City receives the payment, the payment will be processed by first applying the payment to the oldest penalty/interest, the applicable fee for the payment, and then the principal. When a Notice of Attornment has been served upon all tenants of the building, the rents payable to the landlord are instead remitted to the bailiff for payment towards the warrant and then remitted to the City.

Revenue Services staff in the Finance Department monitor the productivity of bailiffs and collection agencies by reviewing the number of accounts that are returned by the bailiff and forwarded to a collection agency. Statistics indicate that there is a 49.4 percent recovery rate for business tax accounts and a 81.4 percent recovery rate for realty accounts. As a result of businesses vacating the assessed address, many times the bailiff is unable to locate the business operator and therefore returns the account to the City as uncollectable. The City in turn reviews and typically issues the account to the collection agency for skip tracing collections. With respect to realty tax arrears that are being collected by the bailiff, if the bailiff is unsuccessful in reaching a repayment plan with the debtor, they collect rent monies from the tenants (where the City has given prior approval for rent attornments).

If the bailiff is unsuccessful in the collection of an account after ninety (90) days, the account is returned to the City and re-assigned to a collection agency for further collection activities.

A Request for Proposal for Collection Agencies was completed in June 1999. Two collection agencies - D & A Collection Corporation and Collectcorp Inc. - were selected to act as agents for the City in recovering business tax arrears for a period of two years. The collection agency will pursue the taxpayer using such methods as telephone calls, letters, skip tracing and small claims court legal action, if necessary. Collection agencies are paid a flat commission on the receivables that they collect. This is an expense to the City, and not the debtor. There is no fee charged for accounts where no monies have been recovered. The commission rate ranges from 15 percent to 25 percent of the receivable collected. For example, if the collection agency obtains payment of $100 from a taxpayer, the City is charged $25 for that particular recovery, and the net recovery to the City is $75.00. Current Use of Bailiffs:

Appendix E summarizes the practices of the former municipalities with respect to bailiffs and outlines the process being followed in the City since amalgamation of all former municipalities, in January 1998. All of the former municipalities used bailiffs in the collection of unpaid Business Occupancy Tax and unpaid realty tax for business properties (commercial, industrial and multi-residential) and residential properties that are tenanted. Only three of the six former municipalities used bailiffs to collect unpaid realty tax for owner-occupied residential properties.

Currently, Revenue Services of the Finance Department is using bailiffs after all internal collection activity has been exhausted, in the recovery of:

(i) business occupancy tax arrears; where we know or believe the business operator is still at the assessed location;

(ii) realty tax arrears on commercial, industrial or multi-residential properties; and

(iii) realty tax arrears on residential properties that are tenanted.

Given the additional burden on the taxpayer for the bailiff costs, and the security of the City’s interests, bailiffs are not being used for owner-occupied residential properties.

For residential tenanted properties, accounts are issued to the bailiff after all internal collection efforts have been exhausted, including, but not limited to, telephone calls, letters, meetings and title search.

Business accounts are being issued to the bailiffs where we know or believe the business to still be at the assessed address. Internal collectors pursue the collection of the account, but failing firm payment arrangements the account is issued to a bailiff. If there are no assets of value for seizure, the account will go to either a collection agency for skip tracing or our legal division to obtain a court order judgement.

Realty properties in the commercial, industrial and multi-residential property class are issued to the bailiff after all internal collection efforts have been exhausted, including, but not limited to telephone calls, letters and meetings. If the bailiff is unsuccessful in a repayment plan, a rent attornment authorization is provided.

Appendix F identifies the number of warrants issued to bailiffs by former municipality between 1993 and 1999.

The elimination of the business occupancy tax in 1998 significantly impacted the number of accounts that were forward to bailiffs for recovery of tax arrears. Beginning this year, the City will no longer be issuing supplementary/omit bills for business tax pertaining to 1997 and prior years. In 1998 we issued 5,204 supplementary/omitted bills in the amount of $23.6 million for business occupancy tax (BOT) pertaining to 1996 and 1997 business operation. In 1999, we issued 48 supplementary/omitted bills in the amount of $270,540 for business occupancy tax (BOT) pertaining to 1997. Of these accounts, 2,059 accounts ($4.4 million) remain outstanding and are either:

(i) assigned to an internal collector (516 accounts totalling approximately $2.6 million);

(ii) bailiff (6 accounts totalling approximately $15,000);

(iii) collection agency (123 accounts totalling approximately $306,000);

(iv) or are being reviewed to determine if they should be issued to an external party for collection (1,414 accounts totalling approximately $1.5 million). Accounts are reviewed to determine if the business is still operating at the assessed address and if there are any outstanding appeals on the account.

Appendix G identifies the number of accounts with a bailiff or collection agency as at April 28, 2000. Staffs are currently reviewing over 2,747 business accounts (totalling approximately $13.3 million) to ascertain whether or not the business is still operating and if there are any outstanding appeals on the account. Following completion of the review within the next two to three months, the account will either continue to be collected upon by the internal revenue collector, or issued to a bailiff or collection agency. A bailiff will be used for accounts where we know or believe that the business is still operating at the assessed address and the internal collector has come to a standstill in achieving a firm repayment plan and where there is a tenant to attorn rents. A collection agency will be used for accounts where we know the business operator has vacated or has ceased operating at the assessed location.

Between 1993 and 1997, prior to amalgamation and the introduction of CVA, the former municipalities forwarded approximately 82,170 accounts to a bailiff for collection or an average of 16,400 per year. Of these, approximately 53,175 (65 percent) or 10,635 per year were for business occupancy tax. The balance, 28,995 (35 percent) or 5,800 per year were for outstanding realty tax.

In 1998 and 1999 a total of 10,357 account were issued to bailiffs, or an average of 5,179 per year. Of these, 7,064 (68 percent) or an average of 3,532 per year related to business tax and the balance of 3,293 (32 percent) or an average of 1,647 per year relates to outstanding realty tax. The supplementary/omit rolls that the City received pertaining to the 1998 tax year were not billed until late 1999. Therefore, the issuance of accounts for past-due amounts will not occur until 2000. Our review of the outstanding business accounts will be complete within the next two to three months.

In 1998 and 1999, the number of accounts issued to the bailiff decreased over previous years. This decrease is attributed to:

(a) The elimination of business occupancy tax effective January 1, 1998. Prior to 1998, 65 percent of warrants issued related to business tax accounts.

(b) The fact that some of the former municipalities issued owner-occupied residential properties to bailiffs. This practice has not been carried forward in the new city, given the security of the City’s interest, and the additional burden on the taxpayer for the bailiff costs.

(c) Since amalgamation, the Revenue Services Division has largely been focused on amalgamation related issues, the development and implementation of a consolidated property tax system for the new City, and the implementation of CVA, including the tax policies adopted by Council.

Owner-occupied realty taxes are not being forwarded to the bailiff for collections since the ultimate tax collection tool (i.e., the tax sale process) is in place. For all realty taxes, including commercial, industrial, multi- residential and single family residential, municipal tax sales proceedings can commence once taxes have been in arrears for three years (for lands with a building) or two years for vacant land. After all other collection efforts have been exhausted and a suitable payment plan has not been secured, staff proceed with the registration steps as outlined in the Municipal Tax Sales Act to collect the tax arrears. The debtor has one year from the date of registration of a tax arrears certificate on title of the property, to pay the cancellation price which includes all of the taxes levied, plus all accrued interest/penalty and costs. Failing payment within that year, or the entering into of an extension agreement, the Treasurer is required to proceed to a sale through a public auction or public tender process for the property.

With respect to outstanding realty accounts, residential tenanted properties are currently being issued to the bailiff. The bailiff is used to attorn rents particularity where taxes approach 50 percent or more of the assessed value of the property.

As noted, the use of municipal tax sales as a collection tool is more effective than any other collection method since the City is the “first in line” to collect upon the sale proceeds. The only risk relates to the sales value of the property being less than taxes owing. This risk relates only to commercial and industrial realty properties, and hence these accounts are monitored more closely.

Conclusion: The City of Toronto bills approximately 600,000 property tax accounts per year. In 1999, the total of all billings was $4.5 billion (city and education), of which 96 percent was collected by the end the calendar year.

Based upon the practices of the former municipalities, there were a number of business occupancy tax (BOT) accounts that had not been assigned for collection until after amalgamation. With the consolidation to one tax system in late 1998, this has allowed the supervisors to review accounts for assignment for collection. As such there are approximately 2,700 accounts that are being reviewed to determine if they should be issued to an external party for collection.

Accounts that are currently issued to the bailiff for collection include business occupancy tax (BOT) and realty accounts for commercial, industrial, multi-residential properties and residential properties, which are tenant occupied. These accounts are only issued to a bailiff after a Revenue Services internal collector has exhausted all attempts for the recovery of the outstanding taxes.

With the elimination of business occupancy tax (BOT), collectors will be able to focus their attention on the collection of realty accounts. Collection efforts will include automated notices, telephone calls leading up to tax registration, and if unpaid after 3 years the City will proceed to use tax sales to collect outstanding taxes.

Contact Name:

Margo L. Brunning, Manager, Collections/Receivables, Payments and Regional Customer Service, Phone: (416) 395-6789, Fax: (416) 395-6703, Email: [email protected]

Giuliana Carbone, Director, Revenue Services Division, Phone: (416) 392-8065, Fax: (416) 395-6811, Email: [email protected].

(A copy of the Appendices referred to in the foregoing report was forwarded to all Members of Council with the May 16, 2000, agenda of the Administration Committee, and a copy thereof is also on file in the office of the City Clerk.)

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The Administration Committee reports, for the information of Council, having also had before it:

(i) a joint confidential report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor, entitled “Update on Largest Tax Receivables including 1000 Finch Avenue West”, which was forwarded to all Members of Council with the May 16, 2000, agenda of the Administration Committee, and a copy thereof is also on file in the office of the City Clerk; and

(ii) a document entitled “Largest 20 Tax Debtors - Appendix A and Appendix B”.

(City Council on June 7, 8 and 9, 2000, had before it, during consideration of the foregoing Clause, a joint confidential report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor, such report to remain confidential in its entirety, in accordance with the provisions of the Municipal Freedom of Information and Protection of Privacy Act.)

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The following persons appeared before the Administration Committee in connection with the foregoing matter:

- Mr. Glenn Shingler, President, A. O. Shingler and Co. Ltd.; - Ms. Judith Merrell, P. D. Merrell Bailiff Inc.; and - Mr. Harvey Greber, S. Wilson and Co. Bailiffs Ltd. Councillor Howard Moscoe, North York Spadina, also appeared before the Administration Committee in connection with the foregoing matter.

(City Council at its regular meeting held on October 3, 4 and 5, 2000, and its Special Meetings held on October 6, 2000, October 10 and 11, 2000, and October 12, 2000, had before it, during consideration of the foregoing Clause, the following report (October 2, 2000) from the Chief Financial Officer and Treasurer: Purpose:

To provide information, as requested by the Administration Committee, on a timetable and process to be utilized in the collection of outstanding property taxes for commercial, industrial and multi-residential properties.

Financial Implications:

N/A

Recommendation:

It is recommended that this report be received for information.

Background:

At its meeting held on Tuesday September 19, 2000, the Administration Committee gave consideration to a number of reports related to the collection on taxes. In its consideration of this matter the Committee adopted the following motion and requested the Chief Financial Officer and Treasurer to submit a report directly to Council on the timetable summarizing the process to be utilized in the collection of outstanding taxes for commercial, industrial and multi- residential properties:

“that the process used by the former City of Scarborough, as it applies to commercial, industrial and multi-residential properties, be adopted by the City of Toronto, save and except the issuance of final notices after interim installments, and the Chief Financial Officer and Treasurer be requested to submit a report thereon in one year’s time on the results of adopting this policy.”

Comments:

Attached as Appendix “A” is a timeline of the activities that will be undertaken by the new City of Toronto in the collection of outstanding taxes for commercial, industrial and multi-residential properties, with a comparison to the collection activities utilized by the former City of Scarborough. Contact Names:

Giuliana Carbone, Director, Revenue Services Division Phone:(416) 392-8065; Fax: (416) 395-6811 Email: [email protected]

Margo L. Brunning, Manager, Collections/Receivables, Payments and Regional Customer Service Phone: (416) 395-6789; Fax: (416) 395-6703 Email: [email protected].

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Appendix “A”

TIMELINE OF PROPOSED COLLECTION PROCESS FOR TORONTO WITH Comparison to Former City of Scarborough ON NON-RESIDENTIAL PROPERTIES Month Toronto Scarborough January Interim Tax Mailed late January/early February Interim Tax Mailed early January, 21 days prior to Bill at least 30 days prior to 1st instalment Bill 1st instalment due date. Have 2 due due date. Have 3 due dates – March, dates due – February and April April and May February 1st Interim instalment due 1st Interim instalment due March 2nd Interim instalment due April 3rd Interim instalment due 2nd Interim instalment due May Final Tax Mailed late May at least 30 days Reminder Brown “Tax Reminder” notice, sent Bill prior to 1st instalment due date. Have Notices beginning of month after last interim 3 due dates - July, August and instalment due date (May) September June Internal 30 days after the last interim due date Final Tax Mailed early to mid June, 21 days prior Revenue (June), accounts with outstanding Bill to 1st instalment of final bill. Have 2 Collections taxes of $5000 or more are assigned due dates - July and September Activities to an internal collector. Collection (June to activities include mailing of October) collection letters and telephone calls. July 1st Final instalment due 1st Final instalment due

Internal collection activities continue. August 2nd Final instalment due

Internal collection activities continued. September 3rd Final instalment due 2nd Final instalment due

Internal collection activities continued October Statement 30 days after last final instalment due Notice of Green “Notice of Taxes Overdue” of Overdue date, all accounts with outstanding Taxes issued the beginning of the month after Taxes taxes and no firm payment Overdue the last due date (October) arrangements in place, are mailed a “Statement of Overdue Taxes”.

Internal collection activities continue. November Final “Final Notice” mailed to all property Final Red “Final Notice” mailed to all Notice owners who did not respond to Notice property owners who did not respond to previous “Statement of Overdue previous Green “Notice of Taxes Taxes”. The notice will advise that Overdue”. full payment or suitable, firm payment arrangements must be made within 21 days to avoid bailiff action.

Internal collection activities continue. December Internal collection activities continue. January Bailiff Approximately 30 days after the Bailiff Accounts that were a mailed “Final (following Warrants mailing of the Final Notices, accounts Warrants Notice” in December with no firm, year) with no firm, suitable payment suitable payment arrangements in place arrangements are issued to a Bailiff. are issued to a Bailiff.)

(City Council also had before it, during consideration of the foregoing Clause, a confidential joint report (March 17, 2000) from the Chief Financial Officer and Treasurer and the City Solicitor, such report to remain confidential in its entirety, in accordance with the provisions of the Municipal Act and the Municipal Freedom of Information and Protection of Privacy Act, given that it concerns personal matters about an identifiable individual.)