By Angelica Ingram
With municipal budgets taking shape for 2016 across the county more than $4 million is owed to the four municipalities due to tax arrears.
According to information provided by local treasurers Shannon Hunter Barbara Swannell Tammy McKelvey and Lorrie Blanchard a total of $4363377 is owed in tax arrears.
The municipality with the lowest amount of outstanding taxes is Algonquin Highlands which has $765530 in arrears as of Dec. 31 2015 McKelvey told the paper in an email.
Algonquin Highlands sends out reminders regularly regarding the outstanding amounts.
“For those tax accounts that are going to be in three years of tax arrears we send correspondence urging payments to avoid tax registration procedures” wrote McKelvey.
Dysart has the largest amount of arrears totalling nearly $1.5 million Swannell told the paper. The amount does not affect the municipality’s ability to budget for 2016 as Dysart has reserves to help bridge the gap said the treasurer.
“The annual budget is based on the calendar year (Jan. to Dec.)” Swannell wrote in an email to the paper. “The municipality has working funds contingency reserve of $1040000 that helps to bridge the cashflow cycle and alleviate any collection shortfalls for the year … The annual budget is balanced which means that all sources of revenue (whether they are collected or not) are expended therefore no wiggle room.”
In Minden Hills there is nearly $1.27 million owed to the township which Blanchard tries to collect through arrears notices collection letters and tax registration/sale of land.
Tax collection procedures are mandated for all Ontario municipalities by the Municipal Act.
Blanchard says the municipal budget is prepared regardless of the amount of outstanding taxes which will generate interest and penalty income which is estimated based on historical actuals.
“Because of the tax sale process we are almost always guaranteed repayment assuming that the outstanding taxes do not exceed the value of the property” she wrote to the paper. “As an added level or risk assessment we calculate some allowance for doubtful each year based on how long the taxes have been outstanding.”
Highlands East has $1.1 million in arrears Hunter told the paper.
“High outstanding taxes could affect a municipality’s cash flow and could possibly put the municipality in a position to borrow” Hunter said when asked how arrears can affect a municipal budget. “We don’t budget to compensate as the monies raised in taxation are for current year expenditures. We are diligently working towards decreasing the outstanding amount.”
All four treasurers said the reasons for outstanding taxes vary by property owner and that in the majority of cases are not disclosed to the municipality.