Chatham-Kent councillors will discuss the elimination of a few property tax area charges during Monday night's meeting.
A staff report going to council recommends the elimination of area ratings for police services, street lights and horticulture.
An area rating is intended to account for either significant differences in service levels or costs of providing services to various different parts of Chatham-Kent.
If approved, all property owners would pay equally for the three services through the base levy, regardless of how frequently the service is used in their community.
For example, a rural property owner that is currently paying $196 per $100,000 of assessment for police services would pay $298 under the new method, resulting in an increase of $102. Meanwhile, an urban property owner who currently pays $374 for police services would also pay $298, resulting in a savings of $75.
"Generally, in the absence of area rating, similarly assessed properties would pay the same level of property taxes municipality wide," read the report. "Conversely, with area rating, similarly assessed properties pay different levels of property taxes depending on the level of service provided in their specific area."
The Municipality of Chatham-Kent currently maintains 3,000 tax rates each year including 14 different area charges. The excessive number of tax rates are a carryover of rates from pre-amalgamation. According to the report, during the transitional time of amalgamation, the preference was to keep information consistent as much as possible for property owners. However, staff believe the concept of area charges can be confusing for most residents.
"Area charges add complexity to the understanding of property taxes as it is not a well-understood concept by property owners," stated the report. "This outcome does not align with the municipality’s vision of transparency."
The elimination of the selected area charges would also fall in line with the municipality's goal of creating a more streamlined approach towards property tax calculations.
In May 2019, council approved a recommendation to allocate $100,000 of the Provincial Efficiency Grant towards the Tax System Modernization project. The purpose of the Tax System Modernization project is to implement a new tax system and consolidate the existing 3,000 municipal tax rates, creating efficiencies in the administration of property taxes.
"In preparation for the implementation of a new property tax system, staff have initiated a review of the current tax rate model to promote a process that supports the council mandate of openness and transparency," stated the report. "The goal for the consolidation portion of the project is to reduce the number of area rated charges to more accurately reflect the level of service provided to the property owners of the Municipality of Chatham-Kent."
If approved, none of the changes would have an impact on service levels and the recommendations would not affect the amount of taxes generated.
On Monday councillors will also receive an information report with the schedule for the 2021 budget deliberation meetings which are set to be held virtually due to the ongoing COVID-19 pandemic. The municipality will also hold online community consultation in lieu of the usual community open house meetings.