Historical Records of B/M File

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2 Historical Records of B/M File 1975 Original by-law that kicks off the marriage Town was concerned about development of Berhhardt, while Ministry was concerned about Airport in Morrisette 1984 after 9 years of back and forth appeals, OMB issues order CAO of the day, Sherratt questions the tax revenue and asks for internal analysis CAO of the day Gary Shay asks for a review of the calculation Attorney Murray Ellis opins downloading and transferring of costs create inequity 2016 KMPG report suggested using B/M to help offset infrastructure deficit. Increased taxation revenue (approximately $600,000 annually) resulting from the full assessment of rural properties that are currently taxed at a lower rate due to differences in municipal service levels. pg 29.

3 Recent rationale for why topic is raised 2017 in May - Council votes to remove wastewater from property taxes (Properties who receive sewer services have an neutral increase with wastewater now appearing as a direct bill, and those who don t get a net decrease) 2017 in May - Council votes to mistakenly increase B/M taxes from 35 40% as part of the budget - without following proper legal process in Oct CAO Avgoustis, catches this mistake and seeks Council reversal of 40 35% to respect OMB ruling in Oct CAO Avgoustis, identifies inequities in tax rates and services across municipality for B/M, Harvey Kirkland Drive and Goodfish road (Teck township) and seeks Council direction to hold a public meeting.

4 Current Status 2017 in Nov Public Meeting held, lots of speakers have a say and provide good feedback. Mr. Coghlan eloquently speaks at meeting and accurately identifies that no one in the room is a tax expert and makes a recommendation for a consultant who specializes in this stuff be hired. Over 22 letters addressed to Council and CAO, with 10 advocating/requesting a 3 rd party be brought in to review this in Jan CAO Avgoustis tables report, recommending Council hear delegates and then make a decision on 6 February. Citizens delegate and Council unanimously approves a motion to allows delegates for the Bernhardt Morrisette taxation issue another opportunity to delegate at the 6 February meeting and that the decision be pushed forward to a later meeting date. --- Decision date remains outstanding in Feb Councils asks for some fact checking and a legal opinion

5 Items that changed since School Board Taxes make up a significant portion (40%) of property tax levy. 2. Assessments were based on Areas & Regions in the province. 3. Assessments included dollar value ceiling/capping for improvements. 4. Hard rules to justify appeals. 5. Assessment calculation included historic built values. 6. Inconsistent re-assessments dates. 1. School Board Taxes make up a very small portion (1.75%) of property tax levy. 2. Property tax levy funds different services - LSR 3. Assessments are province-wide 4. Introduction of new classes of property, new phase-in procedures, new bands of permissible rate ratios, new municipal limitations, and new deadlines. 5. More burden placed on residential properties. 6. Calculation based on market-value assessment, not assessment based on value in current use. 7. Fixed re-assessment dates 8. New Assessment Review Board process easier rules to justify appeals, especially for commercial/industrial class. *** The basis of the math used by the OMB in 1984 to calculate costs has fundamentally changed as both the assessment scheme and property tax formula has changed in Ontario.

6 History of downloaded since 1984 Federal Government Impact Feds get out of the social housing in 1993 downloading all costs to province which in turn downloads costs to municipalities. Changes to airport grant funding in 1995 which is restricted to airports with scheduled year-round commercial passenger service. - Current example: Last grant received from Feds was in 1994, for our airport-specific snow blower. Since 1995 all operating & capitals costs have been paid by property taxes. Increased Transport Canada airport regulatory burden for emergency response, security, winter maintenance & wildlife control post 9/11 and ongoing. - Current example: Aviation SMS system & audit. Changes in cost-sharing and the growth of policing costs that local government pay for, but are under federal government control, have downloaded onto local governments. Current example: Upcoming marijuana legalization is a new cost download from the Feds to local police and local zoning. Province is getting money from Feds but have not said if municipalities will get any.

7 Items that changed since 1984 Provincial Government Impact Local Service Realignment (LSR) removes school board taxing powers and replace it with a slew of other services to be funded by municipalities. Net costs increase to municipalities Provincial-Municipal Fiscal Service Delivery Review province starts upload some costs from the 1998 LSR which take 10 years to fully implement Municipalities still have net costs from Internet search of Ontario municipal downloading identifies multiple sites and academic papers on topic.

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10 Ongoing downloading pressures Current example #1: As of 1 July 2018, municipalities will be responsible for the enforcement of rental unit maintenance standards as the Province gets out of it - new 2018 budget impact. Current example #2: Province requires Asset Management Planning regulations in place by 1 Jan new 2018 budget impact. Current example #3: Accessibility regulations for municipalities new 2018 budget impact. Current example #4: New Growth Plan for Northern Ontario significant costs for source-water protection, environmental regulations, land planning/omb appeals - new 2018 budget impact. Current example #5: Expanding powers for Ombudsman, & Integrity Commissioner investigations which municipality must fund as of 1 January 2019 new 2019 budget impact.

11 Subdivision Agreements Goodfish Lake Phase I Approved by MOH prior to annexation Bernhardt Dr Harvey Dr 5077 Road assumed by TKL after annexation Road was never brought up to TKL standard, only Rural MOH standard Never maintained by the TKL Bernhardt Dr. 108

12 Subdivision Agreements Goodfish Phase II Bernhardt Dr Harvey Dr Approved May 29/1984 All residential roadways and drainage works to be constructed and installed in accordance with TKL requirements Roads assumed by TKL: By-law passed on April 2, 1991 Bernhardt Dr. Airport Rd Goodfish Rd

13 Goodfish Area Approved Oct. 3/1989 Subdivision Agreements Harvey Drive assumed by TKL: By-law passed on April 2, 1991 Portion of Goodfish Road assumed by TKL: By-law passed on March 3, Bernhardt Dr Harvey Dr Airport Rd 65 NETTIE LAKE ROAD Goodfish Rd Bernhardt Dr

14 Nettie Lake Approved Oct. 1/2002 No road maintenance from Airport Road No road maintenance on internal roadways Subdivision Approvals SANDY DRIVE Deloye Cres Pinetree Rd Pinetree Rd NETTIE LAKE ROAD

15 Breakdown of all municipal owned roads in Bernhardt & Morrisette Townships Road Total km / residential assessed % municipal costs responsibility Airport Rd 1.06 / 2 res 100% (1.06 km) N/A Goodfish Rd 1.91 / 3 res 100% (1.91 km) N/A Harvey Dr / 7 res 100% (0.80 km) N/A % local residents costs responsibility Bernhardt Dr / 29 res 29.3% (0.44 km) 70.6% (1.06 km) Nettie Lake Rd 1.72 / 0 res N/A 100% (1.72 km) Pinetree Rd 1.20 / 16 res N/A 100% (1.20 km) Deloye Cres 0.29 / 5 res N/A 100% (0.29 km) Sandy Dr / 18 res + 1 island N/A 100% (1.50 km) Public Right-of-Way Unknown / 5 res N/A (not owned by town) 100% Other Unknown / 5 res N/A (not owned by town) 100% TOTAL 9.09 km / 91 res 46.3 % (4.21 km) 53.6% (4.88 km) *Approximate measurements.

16 What roads will need to be brought to municipal standards? Road Total km / residential assessed Municipal Standard Airport Rd 1.06 / 2 res Already to legal municipal standard no change Goodfish Rd 1.91 / 3 res Already to legal municipal standard no change Harvey Dr / 7 res Already to legal municipal standard no change Bernhardt Dr / 29 res 1.06km will need to be upgraded (29.3% is already legal standard) Nettie Lake Rd 1.72 / 0 res 1.72km will need to be upgraded Pinetree Rd 1.20 / 16 res 1.2km will need to be upgraded Deloye Cres 0.29 / 5 res 0.29km will need to be upgraded Sandy Dr / 18 res + 1 island 1.5km will need to be upgraded Public Right-of-Way Unknown / 5 res N/A (not owned by town) (Dorothy, Joyce, Lawgraves Lakes etc) Other Unknown / 5 res N/A (not owned by town) (Dorothy, Joyce Lawgraves Lakes etc) TOTAL 5.77km will need to be upgraded and assumed by the Town in the Official Plan to stop sending out invoices. Once a road is upgraded, will change assessment removing seasonal access discount.

17 Changes in Neighbourhoods In 1978, there were only a few year round homes recorded in Bernhardt and Morrisette. There was a total of 46 cottages and 3 service clubs on Nettie Lake and 3 recorded dwellings on Goodfish Lake. According to the 2016 MPAC, there are 51 houses assessed as yearround and 40 assessed as seasonal in all of Bernhardt & Morrisette.

18 Changes in MPAC Calculation In addition to the municipal tax rate area set by council, MPAC assesses some 200 factors for each property but also provides site-access adjustments as follows: No Access = Private Access = Right-of-Way Access = Seasonal Access = Water Access = Island Access = - 75% applied to the total property value - 10% applied to the total property value - 10% applied to the total property value - 10% applied to the total property value - 37% applied to the total property value - 37% applied to the total property value Source: Market Valuation Report Residential Properties - Rural Timmins Area, pg. 17

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20 Residential Building Permit Activity Teck Township 2016 & 2017: 82 permits issued Bernhardt & Morrisette 2016 & 2017: 4 permits issued

21 1. Can the municipality unilaterally amend the original By-law to another tax rate? a. No - Wishart Law to elaborate Legal Issues 2. Can B/M de-annex? (Wishart Law to elaborate if need be) a. IF Council votes for it, and IF the Province approves it. b. Going from organized to unorganized has never been done in Ontario. c. Morrisette has the airport within its boundary. d. Goes against the Growth Plan for Northern Ontario.

22 Factors to consider 1. Should a tax increase in B/M be revenue neutral or provide additional revenue for the town? (KMPG suggested new/additional, CAO suggested revenue neutral to redistribute the tax burden) 2. How does one determine a cost for wastewater off the property taxes? (KPMG had calculated it at 10% - but that may be inaccurate and low, as it didn t factor in program support costs) 3. How does one determine a cost associated with the downloading of rental unit property standards enforcement? The asset management regulations? Accessibility regulations? Planning Act regulations? - All recent burdens placed on the municipality. 4. What trigger or formula should be used to automatically kick in for future costs in 2019, 2022, 2025, 2030 that we do not know of today so we aren t back at this again under a new Council?

23 Factors to consider 5. Should we consider some type of reduced calculation for the houses along Goodfish Road on the Teck Township side, and Harvey Kirkland Drive properties that also don t get some services today? If no, could that be a form of discriminatory tax policy and open the municipality up for potential litigation? 6. How does one determine what services to include in the analysis? Hard infrastructure assets, soft services, and/or regulatory such as Planning Act? 7. If the town does nothing even after removing wastewater from the property taxes and realizing downloading costs has created an inequity, can the current 35% still stand? If so, could that be a form of discriminatory tax policy and open the municipality up for potential litigation? 8. Can future CAO s and/or Council s raise this issue up again?

24 CAO Thoughts & Recommendation Council should give notice: That at the 6 March 2018 Council meeting they will make a final decision so everyone is clear of the date, and can register to delegate if they wish. As a result of the complexities in conducting a defensible costing analysis and the potential for litigation, it is recommended: 1. Council hire an experienced professional to conduct an independent analysis and make recommendations for the 2019 tax year and, 2. Council create a formal sub-committee of Council, appointing members of the public to oversee the work of the consultant in an open and transparent process in accordance with all Municipal Act requirements. 3. All math calculations should be transparent, and defensible in court.