Yorkton Council unanimously supported tax deferrals and interest abatement to help citizens work through the financial pressures resulting from COVID-19.
“Due to the economic impact of COVID-19, many municipalities and government organizations are implementing relief plans which impact residents and businesses,” noted a report circulated to Council at its regular meeting Monday, by Ashley Stradeski – Director of Finance, with the City.
“The COVID-19 pandemic has caused many utility providers to change the way billing and collection of utility services will be provided, and we are in the same position to do so,” detailed the report.
“Municipalities are also reviewing how they plan to bill and collect property taxes and other items, and the focus will be providing taxpayers with additional payment options.”
In terms of utility services:
* Moratorium on water disconnections for non-payment until June 30, 2020 to ensure everyone has access to drinking water and water for sanitation during the pandemic;
* Deferral of payment via waiving all interest charges until September 30, 2020, and making flexible arrangements with customers;
*Continue billing and payment reminders such that our residents are kept informed of their current balance and situation.
On the property taxation front measures were also approved by Council Monday.
* The 2020 Assessment Roll is currently open; we have extended the deadline to file assessment appeals by two weeks to allow taxpayers the extra time which may be required due to office closures (SAMA, City Hall);
*2020 Property taxes have not yet been levied; this will continue on schedule or as near to on schedule as possible;
*2020 Property Tax Deferral -- 2020 Property taxes, once levied, will be given three extra months as a deadline for payment, which will now be September 30, 2020 instead of June 30, 2020. Interest will not be charged during this time. Non-current interest, stemming from unpaid taxes for years 2019 and older, will still be charged as these balances were owing prior to the pandemic and are not reflective of issues with the current economic conditions.
*Tax Enforcement -- Enforcement process will continue as normal, however the city will be lenient with making arrangements. Current enforcement is for properties that have been in arrears for over three years, and any “new entrants” would not face final enforcement (City taking possession of property) until 2023 or later due to the complicated process for this, so at current time there is no need to change this process.
Other Amounts Owed to the City of Yorkton
*Deferral of interest on other current accounts receivable amounts to September 30, 2020 to allow customers of The City’s other services additional options for payments. Interest rates charged on accounts receivable are identified in our Accounts Receivable Interest Charges Policy, and a resolution of Council will be required to waive these.
Of course such moves will have financial implications for the City, said Stradeski, although the exact “financial implications to the City of the above is difficult to calculate.”
“With regards to taxes, to date the city has collected nearly 12 percent of all its tax revenues for 2020 through the TIPPS program (pre-authorized monthly payments),” detailed Stradeski’s report.
“The City collects another approximately 68 percent of its taxes in June, however there is a portion of this which is paid by banks as property taxes are collected along with mortgage payments for some taxpayers. This amount is approximately another 12 percent of all taxes, and that leaves us with 56 percent of taxes normally collected in June, or $14,000,000, which could potentially be deferred. It is not known how much of this would be deferred, however we are confident that the City’s liquidity position is not at significant risk in the short term due to available funds. Ongoing updates will be provided to Council in this regard.
“Another item that we can estimate is the cost of the waiving of interest and penalties on taxes – we collect, on average, approximately $22,500 in interest and penalties per month on taxes. The three month waiving of interest and penalties on taxes would have costs of close to $75,000, which is a direct cost to the City.
“With regards to our Recreation facilities, this is where estimation is complex and still being performed. While we are losing revenues, many of our recreation facilities are not self-sufficient – that is, they take in less revenue than they cost, and are a net cost to taxpayers. With these facilities being closed, revenues are reduced, however so are operating costs. The full impact of this is still being analyzed.”
