Paying of Property Taxes at Banks

Areas of concern with banks accepting payment:

* city staff have a responsibility under the Homeowner Grant Aci to ensure that the
taxpayer is in fact entitled to receive the homeowner grant. The easiest way to check
this is to physically see the customer’s cheque which usually has their address on it. If
the banks were to collect on our behalf this method of checking to ensure that the

taxpayer is in fact living on the property will be lost as we would not have access to this
information.

interest charges apply on any payments of arrears or delinquent taxes, the amount due
changes daily according to rates set quarterly by the province. Banks do not have a
method to accurately calculate the current amount due.

other municipalities have experienced a delay of as much as 10 days in receiving
information (receipts) from the banks. Ifa substantial number of taxpayers paid via this
method it may result in a considerable delay in processing as almost immediately
following tax deadline we are into our peak vacation period.

at present any errors or problems are dealt with prior to payment and receipt processing,
for example, a taxpayer has given us a cheque which indicates that he qualifies for a
home owner grant but has not filled in the HOG application. This would result in
pressure from taxpayers for the city to be more flexible in the application of tax
penalties.

Information from other municipalities indicated that only a small portion of taxpayers paid
via the banks (less than 2%).

Our present payment scheme requires payment to be received here at City Hall. Payments
are received over the counter or are dropped off at City Hall by either the postal service or
the taxpayer.

If the banks were to collect on our behalf, the work load in the tax department would not
be less than at present. There would be less cheques to process, but it would probably take
the same amount of time to process as at present because time would have to be spent
reconciling the individual tax bills to the payment received.

For the last couple of years we have had a number of taxpayers pay penalties after some
bank had accepted their payment prior to our deadline. The penalties were applied as
payment was not received here prior to our penalty date. We can try to solve this problem
by changing our tax bill and emphasizing that payment can only be made at City Hall.

We try to make it easy for the taxpayer to pay their taxes as we have a tax prepayment
plan. This plan has just under 1,000 participants (984 in December), we accept post dated
cheques, and cheques can be dropped off 24 hours a day.

As mentioned in my budget submission I had set a goal for 1993 to allow tax and utility
payments at financial institutions, but after investigation, I can not see any real advantage

in doing so.
KL
Low ‘

*,” Maitland, City Treasurer -
Deputy Administrator

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