So, what mill rate would generate the same revenue if it were applied equally to urban and rural?
Myths & Facts on Napanee’s Unique Tax Policy
There is huge confusion, particularly in the rural wards, as to the real effect of removing area rating. Many rural taxpayers seem to believe that their taxes would rise 32% if area rating were removed when in fact the number is 8.9%. Our member, John Stinson, attended council on May 12 and asked that the exact number be confirmed and publicized. He was promised an answer but received no response. On May 26, 2015, Councillor Lucas (Ward 5) made a notice of motion that the Treasurer provide the correct number and that the report/results be posted/forwarded on the Town’s social media web site and appropriate local media outlets. The motion came up on June 9 and was passed 6-1 with the mayor voting against the motion. The number was finally confirmed by the Treasurer in a June 16 Report to Council. Why did it take so long to get an answer to such a simple question? Why would anyone at Town Hall not want this information published?
Amazingly, despite the resolution of council, the result wasn’t published. On June 23, councillor Lucas asked about the non-publication. Staff advised that they intended to announce the result at the June 29 meeting on tax policy. Even the mayor came on board and directed that the result be posted on the website right away. But the result still hasn’t been posted on the website (other than by an obsure link to the Treasurer’s report in the agenda archives), in either newspaper, or on the Town’s facebook page.
MY-FM carried incorrect information on the morning of the July 29 meeting on tax policy. Here’s what they were reporting:
Urban property owners in Greater Napanee, your taxes could be lower if the rural rebate was a thing of the past. According to the treasurer’s calculations based on the Average Phazed-In Assessment for a residential property of just over $226,000, urban taxes would drop by 16.6%. For rural taxpayers, it would mean an increase of 22.6%. Tax rates will be the focus of tonight’s special council meeting and on how best to conduct an independent study of the process. While the meeting doesn’t start until 7:00, you may want to get there early so you can get a seat.
It is unknown who gave MY-FM this incorrect information.
Myth: Rural residential taxpayers would pay 32% more property taxes if area rating were eliminated.
Fact: Actually rural residents would pay only 8.90% more if area rating were totally eliminated. The 32% rural discount only applies to the Town portion which is 40% of the total. County/Education rates are the same in both regions. And, for each extra dollar raised in one region a dollar less is raised in the other.
Myth: Urban residential taxpayers would save 32% on property taxes if area rating were eliminated.
Fact: Actually, urban residents would save only 8.1% if area rating were totally eliminated. The exact number has now been confirmed by the Treasurer.
Myth: Other municipalities have area rating like ours.
Fact: A few other municipalities have area rating but only for select services which are clearly identified and where there is a clear divide between areas receiving the service and areas not receiving it. For example, Loyalist has only a 2% surcharge on Amherstview residents for transit. Napanee is unique in Ontario. Some municipalities such as Kingston, Belleville and Hamilton have different provisions in their restructuring orders than ours which were agreed on by their constituent municipalites when they were amalgamated. Our restructuring order allows area rating only for policing and only in the old geographic Town of Napanee, not the wider “water-sewer area”. And the rural discount, while it applies in “the water-sewer area”, is not designated for water-sewer. In fact, users have always paid the full capital and operating cost of water-sewer system separate from their tax bills, even the 95 users in Sandhurst Shores who receive municipal piped water but pay the rural tax rate.
Myth: The 32% number was determined by a study done in 2000.
Fact: It’s never been studied, calculated, quantified, or determined by staff, council, or consultants. The original number, 34%, was just an arbitrary number with no data to support it. On April 28, 2011 the discount was reduced from 34% to 32% on a 4-3 vote. This reduction was also just an arbitrary number. See A Brief History of Area Rating in Napanee for a more detailed history of what happened.
Myth: The 32% was designated for policing in 2000.
Fact: Although the Minister’s order allowed council to area rate in old Napanee for policing, this was never done. The Mayor and staff have asserted that the 2000 area rating was for policing but a careful reading of resolution 604/00 and 619/00 passed in 2000 shows that there is not a shred of evidence in the by-laws or minutes that this was the case. The Minister’s order did not allow for area rating for policing in the parts of the water-sewer area outside old Napanee.
Myth: The 2% reduction made in 2011 is in a reserve fund for rural purposes.
Fact: Council passed a resolution on May 10, 2011 to put the 2% into a reserve fund for upcoming rural projects but no reserve fund was created. It doesn’t show up in the reserves section of the Town’s audited financial statements for 2011, 2012, 2013 or 2014. The Treasurer has confirmed in writing that the 2% is contained in the unrestricted surplus account – i.e. with general funds.
Myth: Council, once they’re elected can give a discount to one group of taxpayers if they feel like it.
Fact: Council is bound by Provincial law. The Municipal Act, s.307 requires that mill rates be the same everywhere. Discounts are not permitted. The only authority for a surcharge is s.326 which requires that any surcharge must be for a defined service in a defined area in which that service is provided at a higher level than elsewhere and where the additional cost of providing it has been quantified. In 15 years, none of this has ever happened.
Myth: Rural residents should get a break because most of the crime is in Town.
Fact: Maybe a consultant could determine which group is more law-abiding. In any case, it takes the police more time to respond to a rural “call for service”. And everyone in both regions benefits by the suppression of crime wherever the police response occurs.
Fact: Since 2000, new fire stations have been built in Dorland and Roblin paid for by all of the taxpayers. Numerous rural fire hydrants (dry wells) are being added. These are some of the benefits of amalgamation that often go unnoticed. It takes the fire department longer to respond to a rural emergency and fires may be more advanced and more costly to suppress.
Myth: Urban residents should pay more because they get sidewalks, street lighting and water-sewer.
Fact: MPAC‘s website makes it clear that they factor in all of these services into setting assessments. The water-sewer system is a user-pay system and urban residents pay the full capital and operating costs through user fees. 60% of the urban area has no sidewalks. Much of the urban area north of 401 has no streetlights. There are about 10 blocks of concrete sidewalk in Selby/Roblin, (half of them brand new) and 26 street lights.
Myth: Rural residents should get a break because they have poorer roads.
Fact: Rural areas have many more miles of roads to maintain. Roads are built to handle the traffic counts expected. Some rural roads are lightly travelled. Roads everywhere serve all residents.
Myth: If we handed everything to a consultant and paid him enough money, he could sort out this whole mess and decide who gets the better deal.
Fact: King Solomon himself couldn’t sort out this one. But, he’d be wise enough not to try. The data-set for most services that would qualify for area rating just doesn’t exist. Where data exists it would be very time consuming to assemble it for a consultant. Without verifiable data, the result of a study would never be accepted by either faction. $50,000 would be paid to a consultant; hours of staff time would be consumed; the never-ending squabbles on council would go on while the urgent business of running the Town is ignored and taxes continue to spiral out of control.
Myth: Council cancelled the service delivery review in December because they wanted staff to do the job.
Fact: Council apparently realized that the draft list of services to be reviewed — the one that included “livestock kills” — was flawed. No one on council has ever suggested that staff do a either a Service Delivery Review or a Costing Analysis.
Myth: The line between the urban and rural areas is well defined.
Fact: The line was first defined in 2000 by resolutions 603/00 and 619/00. A map and other background papers are contained in a file containing the by-law 2000-0031 but neither the map nor the background papers are incorporated into the by-law. The map is vague and 3 different versions of it are now in circulation. the boundary was revised in 2003 by resolution 221/03 which is extremely vague. The definition of the boundary in the Vanluven Road area is hopelessly confused. Several properties have no water-sewer service but pay the urban rate. Others have water-sewer service but pay the rural rate. The map makes it clear that the west end of the urban area is 62 Slash Road. However, the urban area has since been extended westward and northward to incorporate recent residential development without any authorization from council. On March 24, Council was asked how this happened. The Mayor said he would find out but has not responded.