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TO: |
Mayor and Members of Council |
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FROM: |
Barb Cribbett,
Treasurer |
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PREPARED BY: |
Paul
Wealleans, Director, Taxation |
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DATE OF MEETING: |
2005-May-30 |
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SUBJECT: |
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RECOMMENDATION:
THAT the report “Swan Lake
Village Condominium – Request to Establish a Task Force” be received for
information.
PURPOSE:
The purpose of this report is to respond to a
proposal from the Swan Lake Group and the Association of Markham Village
Townhouse Condominiums to establish a Task Force for Fair Taxation and Delivery
of Municipal Services. It is this group’s position that the Town of
EXECUTIVE SUMMARY:
This report sets out the broad property
taxation policy in
The proponents from Swan Lake Group and the Association of Markham Village Townhouse Condominiums put forth the argument that property owners in condominium developments – particularly, low density condominium developments – do not receive the same services that all other residential property owners do despite the fact that they are levied taxes at the same residential tax rate. All purchases of property in a condominium development require the purchaser to enter into legal agreements with the condominium corporation that sets out services to be provided and paid for, by the condominium owners. In most cases, these include services such as garbage disposal, snow removal, lighting, etc. These requirements are known at the time of purchase but it the view of the Swan Lake Group and the Association of Markham Village Townhouse Condominiums that low density condominiums, similar to any other residential subdivision, should be provided these services by the Town. The group is requesting that the focus, should a Task Force be struck, relate to services such as road maintenance, garbage disposal, street lighting, snow removal, sewer and water infrastructure.
BACKGROUND:
At the
establish a Task Force for Fair Taxation and Delivery of Municipal Services. The
committee adopted the following resolution:
This issue has been before Committee and Council
previously. Prior to the deputation on September 30, 2004, it
was before the Finance and Administration Committee in June 2003 and at its
meeting of August 27, 2003 (Clause 1 of Finance and Administration Committee
Report 51), Council did not provide compensation to Swan Lake condominiums.
OPTIONS/DISCUSSION:
This report will address a number
of issues, including: an overview of property taxation in
Property taxation in
The use of services in the municipality by individuals is a choice made
by residents who may decide not to avail themselves of certain services even
though they are funded by total budgetary requirements. Whether residents in
the municipality utilize the services of an ice arena, recreation centre, park or
a library is solely up to the residents but the funding to operate these
services is included in the overall municipal budget. Lifestyle choices may
result in certain municipal services not being used but does not preclude them
from being funded by the municipal levy.
A user pay approach to taxation would not only be difficult to
implement but could lead to financial shortfalls resulting in service closures
or cutbacks. Calculating and allocating such costs might also prove difficult.
For example, the provision of library services can be defended as necessary and
beneficial for the community. Its resources can be utilized by all ages, not
only as a learning and educational tool but also as a
source of entertainment and culture. If a fee was charged each time a person
entered a library or borrowed a book without any other financing from the
municipality, it could result in funding shortfalls which would either need to
be provided by the municipality or result in closing of the library or
reduction of its services. Many municipal services will not be provided by the
private sector because there is no financial gain to be realized but are still
recognized by the community as necessary to the health and well being of its
residents.
Supplemental user fees, such as a registration fee for swimming
lessons, is a fee administered to cover the costs of the program. The basic
provision of recreational services by having a public pool available is
included as part of the budgetary requirements approved by Council. The
additional fee is a fee over and above the basic cost of the service.
The current tax system is a value based system and the requirements
determined and funded globally through the annual municipal budget process.
Should residents not choose to use certain services, it does not follow that
their tax bill be reduced to take it into account. There would be serious
impractical aspects of such a system.
One of the major issues in providing services, particularly to
residential condominiums, is the fact that condominiums are located on private
property. The purchase of a residential condominium – whether it is a high rise
or low rise – is a lifestyle choice. The purchaser is aware that an agreement
must be entered into in which maintenance fees will be charged to provide the
funding of services (both repair and replacement) that are the responsibility
of the condominium corporation and its residents.
It has been suggested that through municipal taxation a condominium
owner has paid for municipal services and that despite the condominium
agreement freely entered into, the municipality should either provide the
service to the condominium corporation or provide a rebate to offset the cost.
For example, snow removal from roadways in a condominium development is a cost
generally borne by condominium residents as it is removal of snow from streets
on private property. The argument that the municipality should remove this snow
without a cost to the condominium residents is analogous to that of single
family home owner with a double car driveway with the expectation that the
municipality will remove the snow from the driveway. It is the responsibility
of the single family home owner to remove his/her own snow. The municipal cost
for snow removal that is included in the overall budget provides for snow
removal from all municipal streets in the Town so that once residents leave
their property, whether it’s from a condominium development or a double car
driveway – access to drive on other roads in the Town is unimpeded.
Representatives from
Initial information received from
A complete analysis to verify these
costs would be necessary. However, the principle of extending municipal
services to private condominium property, when such service costs are clearly
the responsibility of the condominium corporation, also needs to be included in
any examination of this issue.
Other related issues include the fact that
The Town of
This rebate is considered by some condominium residents as a precedent
by which the Town should expand to cover costs of other services that are the
condominium’s responsibility. However, the garbage rebate was implemented at a
time when a separate rate was imposed for waste collection – a rate that no
longer exists.
Merits of Establishing Task Force
for Fair Taxation and Delivery of Services
The merits of establishing
a task force may include:
However, establishing
a task force may have negative connotations in that expectations of the
property owners may be heightened simply because the task force is formed, and
increased frustration will result if the outcome is not in favor of the
condominium owners. As noted previously, this issue has been before Council
before and its decision did not favour the residents
of
Membership:
It is recommended that, if a Task Force is formed, it include at least two members of Council, Town staff from Financial Services and the operating department responsible for the service provided, as necessary, two members of the Swan Lake Group and the Association of Markham Village Townhouse Condominiums and that the Task Force report to Council no later than December 31, 2005.
Terms of Reference:
The terms of reference are not detailed in this report but should include the investigation of the extent to which services may be provided, the practicality and methodology, the possible precedent impacts of such actions, relative fairness to all property owners in Markham (service to private property) and any other issues as determined by the Task Force. It would also be recommended that the scope of services to be reviewed be limited to: road maintenance, garbage disposal, street lighting, snow removal, and water and sewer infrastructure.
Possible
Implications:
The implications
of providing services to private property are increased costs to the
municipality. As the fairness issue is
addressed (service to all private property in
FINANCIAL CONSIDERATIONS:
There are no financial implications
to establishing a Task Force, however implementing the
provision of municipal services on a Town-wide basis on private property will
have a negative impact on the Town’s tax rate.
BUSINESS UNITS CONSULTED AND AFFECTED:
None.
ATTACHMENTS:
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Paul Wealleans, Director, Taxation |
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Andy Taylor, Commissioner, Corporate Services
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Q:\Finance and Administration\Finance\SHARED\2005
General Committee Finance\0520 - Swan Lake Village Condominium 2.doc
