RECOMMENDATIONS:
THAT the report
dated June 20, 2005 entitled “Heritage Property Tax Reduction Program –
Region Participation” be received;
AND THAT at the June
23, 2005 Regional
Council meeting, Markham Regional Councillors encourage the Region to
participate in municipal heritage tax reduction programs.
PURPOSE:
This report provides information relating to action
taken by the Region of York in reaffirming its position not to participate in
municipal heritage tax relief programs in York Region. Only Markham and Newmarket have implemented heritage tax relief programs
in York Region.
EXECUTIVE SUMMARY:
This report provides information relating to a Region
report recommending that it not participate in municipal heritage rebate
programs.
BACKGROUND:
At its meeting of March 29, 2005 Council adopted a
report regarding the Town’s Heritage Property Tax Reduction program that
summarized the first year of the program and recommended that “the Region of
York be requested to re-consider its participation in municipal heritage tax
relief programs and that the Markham Regional Councillors raise this issue at
Regional Council at the earliest opportunity”.
At its meeting of June 2, 2005, the York Region Finance and
Administration Committee adopted a regional staff report that recommended that
the Region reaffirm that it will not participate in municipal heritage property
tax relief programs. This recommendation will go to Regional Council on June
23, 2005.
OPTIONS/DISCUSSIONS:
Region has the option to participate in municipal
heritage tax reduction programs
The Provincial legislation that authorized municipal
heritage tax relief programs includes a mandatory provision that the education
share of tax be included if a program is implemented by a municipality. When
the Town of Markham implemented its heritage program in 2003,
the education share was included but a request to participate had to be made to
York Region. The Council of York Region agreed
with a regional staff report and declined to participate. The Region was again
asked to participate by Markham Council in March 2005 and in a report before
the Region’s Finance and Administration Committee on June 2,
2005, the
committee adopted the recommendation not to participate.
Region’s Position
The Region’s position mainly relates to the following
reasons:
1. Administration fee
2. Unequal Benefit Among Municipalities
3. Other heritage relief mechanisms available
4. Unknown costs – unknown take-up
1. Administration fee
The Markham administration
fee for initial applications is 20% of the first year’s rebate. No fee is
charged for the second year and for the third year a renewal fee of 10% is
charged. From then on, each eligible property is charged a 10% renewal fee
every third year. The fees are charged to recover the costs of administration
of the program. Most of the work occurs in the first year of set up and
includes: review of property which may include site check, thorough review of
Town records to ensure there are no municipal infractions or tax arrears,
completion and registration of the heritage easement agreement. The $300 cost
of the preparation and registration of the easement agreement for this program
has been waived – a cost for which the administration fee helps to offset.
The Region’s report notes
that if Markham’s goal is to maximize the benefit to heritage property owners, it
should either reduce or eliminate its fee. As with any new program provided by
municipalities, there should be a cost benefit analysis included. The administrative
cost of providing a benefit for which tax relief is provided, funded by the
balance of municipal taxpayers, without some element of cost recovery, would
not be a prudent course of action. There are other programs and/or functions
that are the responsibility and cost of the lower tier municipality for which
the upper tier benefits, such as tax collection where full quarterly payments are
made to the Region whether or not full taxes are collected. These types of
functions are completed in their entirety by the lower tier for which the upper
tier benefits but does not either contribute or participate.
The Region also notes
that if it did participate, the administration fee on the full rebate would
increase significantly as it would be applied to 100% of the tax levy compared
to 53% (without the Region’s share)
currently. Again, the initial fee is a one time cost with renewals at 10% each
third year. As the Town’s heritage program continues, facets of it will likely
be reviewed, including administration fees.
2. Unequal Benefit
Among York Municipalities
The Region raises the
question of inequity among the nine lower tier municipalities, in that the two
municipalities that have heritage rebate programs – Markham and
Newmarket - would benefit while the remaining municipalities would share the
costs on the basis of their share of the annual tax levy. However, heritage
rebates are treated as tax write-offs. The Region’s share of any write-offs are
funded in the same proportion of the tax levy and it is likely that some
municipalities have write-offs that are disproportionate to their share. It is
also likely that despite the shares of the tax levy, some municipalities
essentially subsidize the costs of services provided to other York municipalities.
While the heritage rebate may be a similar circumstance, it is surely not
unique.
3. Other Heritage
Relief Mechanisms
The Region report
notes that other mechanisms exist to provide assistance to heritage property
owners and cites Vaughan with grants and low interest loans.
Although not mentioned, the Town of Markham
does have a heritage loan program which can be accessed by owners of heritage
property owners to obtain loans to restore and preserve heritage properties.
The Town has also
created the Commercial Façade Improvement Grant program to assist in the
exterior improvement of privately owned buildings in commercial use located
within the Town of Markham’s heritage districts. The financial assistance is available to
encourage the restoration and improvement of commercial building facades in the
heritage districts / main street areas. Both heritage and non-heritage
buildings in commercial use are encouraged to apply. The maximum grant is
$10,000 ($15,000 for heritage buildings). The assistance is in the form of a
50/50 matching grant which is paid upon completion of approved work.
In addition, Markham has
established a heritage subdivision in which vacant lots are offered to
potential purchasers at favourable costs to allow the purchaser to relocate a threatened
heritage home to the lot for a residence. This initiative ensures that heritage
homes are saved and the Town provides land at preferred rates. The heritage
subdivision initiative is unique in Canada. The
Town also exempts development charges for houses that are relocated to the
heritage subdivision.
4. Unknown Future
Costs and Unknown Future Take Up
Uncertainty regarding
heritage rebate costs are highlighted as a serious concern should the Region
agree to participate. Prior to the implementation of Markham’s
program, the Region estimated that its costs could range from $149,000 to $1.49
million annually. In fact, the take up by Markham and
Newmarket heritage property owners was significantly less and based on it, the
Region cost would be only in the range of $15,000. Given its concerns, the
Region could cap its annual contribution
to the program so that while the relief might be less than its full share, there
is still a contribution.
Regional
Plan
One of the objectives
of the York Region Official Plan is to recognize, conserve and promote cultural
heritage resources and to perpetuate their value and benefit to the community.
Regional Council has adopted policies to promote the preservation of heritage
resources. One tangible way in which the Region can assist in the preservation
of the Region’s resources is to participate in this type of tax relief program
which through the Heritage Easement Agreement, ensures the resources are
retained for future generations.
Summary
The issue of Regional
participation in municipal heritage tax reduction programs will be before
Regional Council on June 23, 2005. It is recommended that
Markham Regional Councillors encourage the Region to participate in the
program.
FINANCIAL CONSIDERATIONS:
None
ATTACHMENTS:
None
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Andy Taylor, Commissioner, Corporate Services
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Q:\Finance and Administration\Finance\SHARED\2005
General Committee Finance\0526a Heritage Rebate Program Region Response.doc
