Port Hopers for Fair Taxes - Port Hope Ontario area rating taxation

FAQ from PHFFT Re Port Hope Common and Special Services Levy Review

MAY 24, 2017:
Port Hopers for Fair Taxes (PHFFT) has received a number of questions about the Taxation Allocation
Review Open House that was presented by the Municipality of Port Hope (MPH) on May 10th, at Town
Park Rec Centre. This set of notes attempts to gather some answers together for your consideration.

Important Dates:

The “official deadline” for sending your comments to Town Hall is Monday, May 29, 4:30pm.

The date for the Finance Committee to receive the report from the Working Group is Tues., June 6.

A possible date for Council to vote on changes to the tax allocation by-law is Tues., June 20.

Note: You may recall the Open House about common and special services from a year ago, and you
may have submitted some comments at that time. Please note that the Open House this year, held on
May 10, was based on a very extensive slide show, with much more information and data than was
supplied a year ago. Your comments are encouraged and will be reviewed and considered by the
Working Group (WG), before the group prepares the report that will go to the Finance Committee in
early June.

Q1. I missed the Open House. Where can I obtain information? You can find a video of the session,
an extensive set of slides, a background document, and a comment sheet, all on the MPH website
(scroll down to the section headed “2017 Review/ Information”):

Q2. Where can I find the mandate of the Working Group? Please refer to slide 3, quoted here: “To
review the current common and special services tax allocation methodology to validate or recommend
changes, supported by rationale to Budget Committee and subsequently Council, ensuring fair
allocation of Municipal taxes in compliance with the Municipal Act. Resolution 12/2016.”

Q3. Who selected/appointed the members to the WG? Council selected the members and appointed
them to the group through Resolution 12/2016.

Q4. Who are the six members on the WG? Quoting from slide 4:
Bob Sanderson, Mayor
Les Andrews, Primary Finance Council Liaison
Robert Polutnik, Secondary Finance Council Liaison
Rick Norman, Rural Resident
Gord Walter, Urban Resident
David Baxter, Director of Finance

Q5. The WG seems to be out of balance ward-wise, with no Ward 2 councillors in the group – do we
know why this structure was chosen by Council? No; you might ask your council representatives.
Some Q&A about By-Laws and the Working Group:

Q6. What are the elements of the current special-services By-Law 28/2014, the one that is under
review? It has a list of service areas deemed to be “special”, where each ward pays its share of the net
cost. If a service area is not listed as special, then it is “common”. The by-law also has a schedule for
phasing in the shift of tax levy that was associated with the by-law, over ten years. The by-law sets out
the “rules” that apply when the municipal levy is split during the calculation of tax rates for each ward.

Q7. Where can I find By-Law 28/2014, and what MPH policy was in effect for allocation of tax levy
prior to the approval of By-Law 28/2014? Links follow, including By-Law 48/2003.

By-Law 28/2014:

By-Law 48/2003:

Q8. How did the WG make decisions to come up with the proposed approach that was presented at the
Town Park Rec Centre on May 10 – specifically, was there a vote for any of the recommendations/
suggestions? WG decisions were by consensus; there was no voting.

Q9. If a service area is tagged as common, how much of the net costs of that service would Ward 1
(Urban) be paying, and what proportion would Ward 2 (Rural) pay? For 2017, the split would be 72.8%
for Ward 1, and 27.2% for Ward 2. Refer to slide 15.

Q10. What service areas are tagged as special in the current By-Law 28/2014? Slide 126 has a list,
quoted here:
– Police Services (PHPS & OPP)
– Police Service Board
– Crossing Guards
– Streetlights
– Sidewalks
– Christmas Tree Pickup
– Transit
– Parks, Rec. & Culture Programs (Selected)
– Physical Parks

Q11. I heard that the proposed approach would re-classify seven of the ten special services that are in
the current By-Law 28/2014, making them common, and leaving only three service areas as special –
which three? Police Services, Christmas Tree Pickup, and Transit. These are on slide 127.

Some Q&A about Looking at the Services:

Q12. The slides have information based on a single-family detached residential property valued at
$264,000 but there is no information about whole wards. IF a service area is eligible to be tagged as
special according to the Act, how much of the net operating costs of that particular special service
would Ward 1 be paying and how much would Ward 2 be paying? An answer in dollars based on the
2017 budget, with percentages, would be appreciated.

Ans: the following information for Ward 1 (W1) and Ward 2 (W2) is based on 2017 operating budget
data, from the slide numbers noted, IF EACH OF THE SERVICES WAS TAGGED AS SPECIAL
(i.e., this list does NOT represent the approach that was proposed by the Working Group on May 10):

Paid Parking (slide #45) W1 = $0 (0%), and W2 = $0 (0%)
Police Services (#49) W1 = $4,401K (88.6%), W2 = $564K (11.4%)
Police Service Board (#53) W1 = $115K (88.5%), W2 = $15K (11.5%)
Crossing Guards (#58) W1 = $85K (100%), W2 = $0 (0%)
Roads (#68) W1 = $1,918M (60%), W2 = $1,277K (40%)
Streetlights (#72) W1 = $315K (96.3%), W2 = $12K (3.7%)
Sidewalks (#76) W1 = $20K (100%), W2 = $0 (0%)
Christmas Tree Pickup (#80) W1 – $3K (100%), W2 = $0 (0%)
Transit (#84) W1 = $316K (100%), W2 = $0 (0%)
PRC Facilities & Programs (#93) W1 = $1,067K (97.2%), W2 = $31K (2.8%)
Physical Parks (#98) W1 = $432K (82.9%), W2 = $89K (17.1%)
Marina (#102) W1 = $48K (100%), W2 = $0 (0%)
Harbour (#106) W1 = $0 (0%), and W2 = $0 (0%)
Library (#115) W1 = $624K (85.8%), and W2 = $103K (14.2%).

Q13. The slide show identifies 14 service areas that “could be special” according to the Act, but the
WG proposal recommends (suggests) that 11 of them be tagged as common instead (where Ward 1
would be paying 72.8% and Ward 2 would be paying 27.2%) – what is the overall goal/ philosophy/
rationale/ justification for this “go common” position, and is it explained in the slides? The overall
justification is not evident in the slide show and the answer is not known. For individual service areas,
refer to the specific rationale that is shown in the set of four or five slides for that service area.

Q14. Transit is tagged as special in the current by-law and in the proposed approach – why should Paid
Parking, Streetlights, Sidewalks (and some other service areas), which are tagged as special in the
current by-law, now be tagged as common in the proposed approach? Ans: Please refer to the rationale
in slide 44 for Paid Parking, slide 71 for Streetlights, slide 75 for Sidewalks, and others. Perhaps you
do not agree with the rationale in some cases?

Q15. If Paid Parking is “levy neutral” in the sense that there is no charge on ratepayers’ 2017 tax bills,
why does it matter if this is tagged as common (or special)? There have been comments from some
council members that a multi-tier parking garage may need to be constructed for downtown parking. In
future, this service area might no longer be levy neutral and a tag of common might not be appropriate.
“Special” would ensure that future councils would take a good look at tax allocation for this service
area if something significant changed over the years.

Q16. The Crossing Guards service area is tagged as special in the current by-law 28/2014. There are
no crossing guards in Ward 2. Do students from Ward 2 receive assistance from a crossing guard when
they get off the bus at school, or when they get onto the bus to come home, and should the service be
common? (a) No, the buses unload and load in the school parking lot or driveway, and the students do
not cross any street at that time; and (b) Have a look at the rationale on slide 57, to see if you agree
with the slide.

Q17. It looks like there is an error on one of the slides: Sidewalks slide 3 of 4 (number 75) shows “No”
for “Service being provided or undertaken generally throughout the municipality”, but Harbour has
“Yes” for this question (slide 105). Just like the sidewalks, the harbour is only in the urban ward – does
the “Yes” answer for Harbour on slide 105 make sense? No.

Q18. Again, looks like an error on slide 71 for Streetlights: the slide has a “Yes” for “Service being
provided or undertaken generally throughout the municipality”, but slide 12 has a definition for
“throughout” that reads “in or to every part of”. Considering that there are only two small subdivisions
in Ward 2 that have municipally-maintained lights, does the “Yes” answer for Streetlights make sense?
Ans: Good question – what is your opinion?

Q19. Also, looks like an error on slide 92 for PRC Facilities and Programs: the slide has a “Yes” for
“Service being provided or undertaken generally throughout the municipality”, but slide 12 has a
definition for “throughout” that reads “in or to every part of”. Considering that all of the PRC facilities
and the vast majority of the PRC programs are in Ward 1, does the “Yes” answer for this service area
make sense? Ans: Again, what is your opinion?

Q20. Looks like another error on slide 97 for Physical Parks: the slide has a “Yes” for “Service being
provided or undertaken generally throughout the municipality”, but slide 12 has a definition for
“throughout” that reads “in or to every part of”. Looking at the map on slide 95, especially contrasting
Ward 1 to Ward 2, does the “Yes” answer for Physical Parks make sense? Ans: We’re sensing that you
would prefer to see “No” in that box on slide 97.

Q21. Marina (slide 101) and Harbour (slide 105) seem to have the same problem that was noted above
for some other service areas, with “Yes” as the answer to “Service being provided or undertaken
generally throughout the municipality”. Thank you – your observation is noted – please send your
comments to Town Hall. OK, next question?

Q22. If Harbour is “levy neutral” in the sense that there is not any charge on ratepayers’ 2017 tax bills,
why does it matter if this service is tagged as common (or special)? In the past ten years, extensive
dredging has been required for the harbour (e.g., at a cost of $281,000 in 2010 according to a quote
from R. Polutnik in a 2011 news article). In future, this service might not be levy neutral and a tag of
common might not be appropriate. “Special” would ensure that future councils would take a good look
at tax allocation for this service area if something significant changed over the years.
Impact from a Whole-Ward Perspective:

Q23. The slide show does not provide impact dollars by ward for the effect of the proposed approach –
are these available and if so, can you provide them? Yes, using 2017 budget numbers, under the
proposed approach the levy for Ward 1 would have been reduced by about $250,000 and the levy for
Ward 2 would have been increased by the same amount.

Q24. Do you have impact information as percentages, based on the residential tax rates? Yes, using
2017 budget numbers and comparing to the approved 2017 tax rates, under the proposed approach the
residential tax rate for Ward 1 would have been reduced by about 1.7% and the residential tax rate for
Ward 2 would have been increased by about 8.1%.

Q25. The slide show does not provide any information related to another possible approach that might
be called the “maximum special” approach, where all of the eligible-to-be-special service areas would
be tagged as special – how would that compare to the proposed approach which has only three service
areas tagged as special? Ans: The calculations are complicated but it looks like the allocation of levy
dollars to each ward (the levy split) would be about the same in a “maximum special” approach as it
would be in the proposed approach, and the levy shift of about $250,000 (see Q23) would probably be
the same under either approach.

Q26. Does the WG suggest that the proposed approach is “doing Ward 2 a favour” by not tagging
Roads as a special service? Ans: This is not clear from the slide show presentation or from the video
from the May 10 Open House: we recommend that you ask your council representatives.

Two Q&A about the Municipal Act regarding “Use”, and Property Classes:

Q27. What does the Act say about use by ratepayers, or about availability for a ratepayer’s use? Ans:
Nothing – the Act refers to services that a municipality provides to an area, as noted on slide 11. The
Act does not speak to “who uses a service”, or to “how much they use it”, or to “who may be permitted
to use it” (availability).

Q28. Does the WG proposed approach “make sense” and is it fair for property classes such as
agricultural, commercial, industrial, or managed forest? Ans: In the slide show or the May 10 video,
have you found any references to agricultural, commercial, industrial, or managed forest? What is your
opinion about making sense and fairness for these property classes?

Some Q&A about Your Comments, Finance Committee, and Council:

Q29. What opportunities exist for ratepayers to comment on the proposed approach of May 10th?
Comment sheets are to go to Town Hall ideally by May 29, and we recommend communicating your
concerns to your council reps any time from now up to the Finance Committee meeting that is
scheduled for Tuesday, June 6.

Q30. To do the most good, when should my comments reach Town Hall? Sooner is better: try for
delivery by May 29. Comments arriving later are supposed to be circulated to all of the councillors,
before the June 6 session of the Finance Committee, but the “late” comments might not be reflected in
the report that the Working Group will be preparing in the last week of May.

Q31. I have already submitted some comments, but I’m still considering the issues. Am I allowed send
in more comments? Absolutely!

Q32. When will a WG report come to Council Chambers for review and/or approval? It is currently
scheduled to be included in a section of the agenda for the June 6 meeting of the Finance Committee
(part of Committee of the Whole); the agenda is likely to be posted on the MPH website during the
afternoon of Friday, June 2.

Q33. What might happen on June 6? Finance Committee might recommend that a by-law come before
Council for a vote on June 20, to amend the current tax allocation By-Law 28/2014. If you have
concerns about the direction that Finance Committee is taking on June 6, be sure to contact your
council representatives before the issue comes before Council (possibly on June 20).

Q34. When a by-law to amend 28/2014 comes before Council for approval, will ratepayers have an
opportunity to make comments or ask questions during that session, before the vote? No. Questions
from the public may be asked as part of the Finance Committee meeting, on June 6, but public
questions are not permitted during a Council session (only at the end of the meeting).

Q35. If council approves the proposed approach, will the associated $250,000 levy shift be phased in,
similar to the way that a 2014 levy shift of $975,000 is being phased in over ten years via By-Law
28/2014? Answer is not known, but phasing might be part of the Finance Committee’s discussions on
June 6 and/or in the amending by-law that would be coming before Council later in June.

Q36. What does the WG say or recommend about phasing? Silent; phasing is not part of the group’s

More Information:

Q37. Where can I see a copy of the Open House slide show, the WG background paper, and the MPH
comment sheet? Scroll down to the section for “2017 Review/ Information”, at this link:

Q38. Is there any source online where I can get a sense of the position that some of the councillors
have expressed, or that some of the councillors might take, on the common-and-special issue? There is
a video on YouTube for the MPH all-day Budget Committee meeting from January 26, 2017. The
video is quite long – we suggest that you start at 3 hours and 43 minutes, and play the video for about
half an hour.
Link: https://www.youtube.com/watch?v=c1Zj0kd927Y

Q39: I have some questions that are not listed above – where can I get information? Ans: Please send
an email to porthopersforfairtaxes@gmail.com and we will try to help.

Port Hopers for Fair Taxes