The City of Estevan is targeting a selection of delinquent property owners who owe the City roughly $225,000 in back taxes.
The City has property tax owing to the tune of $827,833 from 2014 and earlier. While the end goal is to have all that at some point, it’s the quarter of a million dollars from prior to 2014 that will be the subject of a Saskatchewan-based collection agency.
Western Municipal Tax Solutions Inc. approached the City of Estevan to offer property tax recovery services, and during the April 13 regular meeting of council, councillors agreed to accept that offer.
The service is provided free of charge to the City; it’s commission-based and is applied to the property owner upon collection of the tax in arrears. That commission may be up to 25 per cent of the outstanding amount.
City Treasurer Jeff Ward said Western Municipal will be asked to look specifically at 10 properties he called “delinquent” cases, because the tax owing dates from before 2014. The tax owing on those individual properties ranges from $10,000 to up to $50,000.
“We’d like to give them a shot,” said Ward about the Western Municipal team. “We don’t want to unload all of our responsibilities to these guys. We’re going through all of our processes and we’ll see what they can do.”
The City has limited resources available to actively pursue payment of these tax arrears, so the City administration recommended trying a third-party solution. All properties will be notified of the potential action to recover the outstanding taxes, and the City will once again be requesting the voluntary payment of those taxes. If they remain unpaid, Western Municipal would begin action to recover those taxes.
The City has options to continue seeking to recover these outstanding property taxes, but Ward said the procedure is long and can be expensive.
“We have a tax enforcement process that our tax assessor Trina (Sieben) follows. It can be a very long, drawn-out process. And if someone is making payment arrangements, you kind of have to go with the flow. Once it gets to the provincial mediation board, they can try to make payment arrangements, and that can be a year (long) process,” said Ward.
“Some of our significant delinquent ones, we’re testing out tonight, are continued problems. So, before we start taking title, because there are a lot of administrative costs to trying to take title of a property, we’re not really in the business of that. That’s a last resort.”
Ward noted the City plans its budget based on property taxes it expects to receive, among other things. The outstanding taxes, have previously been budgeted for.
“In the budgeting process, how it works is you recognize the revenue and set up the receivable. We budget for the revenue,” he said. “If our outstanding taxes are higher or lower at the end of the year, then it’s a direct cash hit to us. We like them to stay consistent, so it gives us the revenue we need.”
With the dip in oil prices causing some uncertainty in the Estevan economy, Ward said it’s inevitable there could be tax payment issues, and the City would like to avoid any potential issues.
In 2013, the City of Estevan was sitting with about $1.4 million in unpaid taxes. Ward said there has been incremental progress since then, with back taxes dropping to about $1 million, and then further, to the current state of affairs with $827,000 owing.
“We’re constantly working on it, but you have to realize, we’re now fronting that. Every dollar we’re fronting, the taxpayers have to front, whether in interest or overdraft or whatever we’re doing, so we just like to expedite the process and get every opportunity to get our money from delinquent payers,” said Ward.
