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Town Council extended the deadline for payment of 2020 Property Taxes from June 30, 2020 to Aug. 31, 2020 to provide residents and businesses payment deferral as a result of the COVID-19 pandemic.
Bills will continue to be sent out as scheduled, and residents can choose to defer their payments to a later date, confirmed CAO Emily Olsen during the special council meeting on April 7.
Additionally, Town utility payments have been deferred for a period of 120 days covering the billings for April, May, June, and July, including the cancellation of any associated penalties.
“The deferral right now only provides relief until that four month period is done,” said Carla Fox, director of corporate services.
“Starting again in September billing will happen. There will be an outstanding amount on your account that would be expected to be paid at that time.”
Coun. JoAnn Race voiced her concern on how this would impact residents when they face their accumulated bills in September.
“The town typically collects about 90 per cent of all its property taxes between the months of May and September each year, which accounts to just under $18M, of which $13M is for municipal purposes,” stated Peter Vana, director of development services.
Projected implications due to property tax deferments is a shortfall of $103,000 from investment income and penalty income, Vana added.
Vana further explained that between $330,000 to $500,000 worth of revenue is typically collected through utility payments in that timeframe and the town estimates about an $11,000 shortfall by deferring those costs.
The Town has reduced services, including 36 temporary and voluntary layoffs of casual, part-time, and full-time employees, and facility closures.
“Even with these levels of service reductions and closures, we still project an operational shortfall of approximately $306,000,” Vana said.
The budget that was approved on March 17 included a 3.1 per cent tax rate decrease on property taxes in 2020.
Council approved an amended 2020 Operating Budget of $29,137,747, and a 2020 capital budget of $10,130,302.
The total Operating Budget Increase, including the reserve fund being used from excess taxation money in 2019, is 3.8 per cent.
The additional tax revenue collected in Hinton in 2019 due to increased assessments was placed into a reserve fund in 2019 and brought in as revenue in 2020, which reduced the total taxation amount required.
An average residential home valued at $365,000 will receive a credit of approximately $62.27 per year, and will be charged approximately $1,978 in Municipal Taxation, with School Taxation and Evergreens Taxation owing in addition to the municipal requisition, stated CAO Emily Olsen, in an email.
Premiere Jason Kenney announced on March 23 that the government froze education property taxes at last year’s level.
This decision saves Alberta households and businesses about $87M in 2020-21, which means $55M for households and $32M for employers, according to a press release from the province.
The release also stated that the government expects municipalities to set education property tax rates as they normally would, but defer collection, to be repaid in future tax years.
Olsen explained that the Town pays for its operating expenditures with fees and charges, grants and donations, franchise fees, rentals, lease revenue, investment income, development levies, federal and provincial contributions, and Yellowhead County’s contribution.
Property assessment increases or decreases also affect how much taxation a resident or business is required to pay, Olsen explained.
“For example, if a resident with a home valued at $365,000 was assessed the same in 2019 as in 2020, the only increase or decrease to municipal property taxes would be through the change in the tax rate being charged,” she said.
Changes by council to the second draft of the budget included reducing the Economic Development Budget by $30,801 to adjust the Chamber of Commerce Agreement, moving the Gerard Redmond Playground project from 2021 to 2020 in the Capital Budget, reducting the FDM Software one-time project by $100,000, reducing transfers to reserve by $100,000, initiating a service level reduction strategy of $75,000, removing cost of living increases to non-union staff, reducing in management grid increases by $55,000, adding the Beaver Boardwalk Maintenance costs of $60,000, adding STARS donation of $20,000, and reducing Council wages by $30,000.
A report on the service level reduction strategy was to be brought forward to council before the end of the second quarter.