Large Outstanding Property Tax Arrears Seemingly Draw No Concerns With One Exception

The large amount of outstanding 2020 property taxes did not phase Council but the historic amounts in arrears drew some words of concern from a familiar voice.

It’s all part of the $27 million in oustanding property taxes.

But unlike past meetings which drew criticism from some quarters for dwelling upon negatives this time around the subject did not spark a heated debate.

SEE RELATED - Growing Tax Arrears May 2019

During discussion of the quarterly reports the subject relating to the amount of uncollected property taxes for 2020 and tax arrears outstanding was on some council members minds.

The first to broach the subject was Councillor Scott McMann who asked for an explanation on what the municipal condition indicator report was showing. See chart below.

Councillor McMann asked about the report line - Taxes Receivable As % Of Taxes Levied - and exactly what it was indicating.

“Are you saying that only 2.2 percent of all taxes are paid through the TIPS (Tax Installment Payment System) program or people who take advantage of the early payment in January that is all it counts to is 2.2 percent (of the tax levy)?” Councillor McMann asked.

Responding to the question finance director Brian Acker said what was actually being shown was the percentage of taxes owing in relation to the overall budget.

“There is always a portion outstanding to the end of June. Normally it would be in the $15 million range that would be still outstanding. At this point we sit at $27 million that is why you see the ratio of 97.89 percent,” Acker said.

He was quick to point out however taxes were not in arrears due to the City extending the due date from the traditional June 30th to September 30th.

“It is almost the full budget amount…it is not in arrears because we extended the payment period and it is still current and $2.2 million of that is in arrears,” Acker said.

To assist property owners during the COVID - 19 pandemic the City took several financial initiatives which included extending the due date of property taxes and utilities to September 30th from July 30th. Council voted to also suspend all interest and penalties on all taxes owing as well as foreclosures during this period.

SEE RELATED - City Takes Action

Earlier in the discussion Councillor McMann said he was expecting to see an increase in the amount of outstanding property taxes.

Speaking on the issue Councillor Brian Swanson once again centered upon his traditional ‘canary in a coal mine' indicator -tax arrears.

Councillor Swanson saw some positive but also many negative indicators in the arrears.

On a positive note he saw the decrease from 2018 to 2020 of properties on a property tax arrears payment plan as a good thing.

“The arrears payment plans on June 30th, 2020 was $901,705, two years ago it was at $1,064,000 so there is a decrease. It is a good thing.”

It was the growing amount of properties which had property tax liens which drew the Councillor's words of caution.

Statement Of Property Tax Arrears - source City of Moose Jaw

“But those with property tax liens as of January 30th of this year was $1,324,178 two years ago it was $605,698. So the percentage increase in property tax liens on two years is 218 percent and that to me is very alarming.”

Councillor Swanson said the percentage of arrears as part of annual property taxes was growing at an alarming rate.

“When you take the total arrears as a percentage of our municipal tax collection which is $28 million of $2.2 million. Those arrears represent 7.9 percent of the municipal tax collection for a year which is getting awfully close to ten percent,” Councillor Swanson said.

Comparative Statement of Property Taxes Receivable - source City of Moose Jaw

Councillor Swanson pointed out tax arrears were climbing.

“On June 30, 2015 the ad total arrears of $839,000 and five years later it is $2,225,000. In five years it has increased 265 percent.”

Councillor Swanson then said the figures made him think about the cash strapped Cast Iron Water Main Replacement Program and how recently lower contractor bids were in his opinion used for aesthetic improvements and not for the actual replacement of water mains.

The aesthetic upgrades delayed the program and kept streets closed to traffic for local businesses, Swanson claimed.