Changes to the provincial law that requires municipalities to recover unpaid property taxes by selling properties whose owners are in arrears could leave the city of Prince George liable for exorbitant administrative costs, council heard Wednesday.
The changes stem from a September 2017 complaint to the Office of the Ombudsperson from a Penticton owner whose property was sold and later transferred to the successful bidder.
The ombudsperson made five recommendations that have been adopted by the Ministry of Municipal Affairs to make the process of tax sales more fair to the original property owner.
The Community Charter requires municipalities to recover unpaid property taxes, including interest and penalties owing on those taxes, by conducting an annual tax sale public auction on the last Monday of September each year.
After the property is sold, the current owners or registered charge holders have one year from the date of the tax sale to redeem the property by paying the taxes owed, and any penalties or interest accrued on the bid price. Failure to redeem the property within that year period will result in the title being transferred to the tax sale purchaser.
One of the changes is a requirement for municipalities to notify owners/charge holders whose properties are in tax arrears 60 days before the tax sale, which council heard is too short a period to make the process work.
Council later approved a letter addressing those concerns to be sent to Anne King, Minister of Municipal Affairs.
Under the current law, in the year a property has delinquent taxes, the city has 90 days to notify property owners using registered mail, a process server or court-ordered substitute service.
The proposed change will requires the city to execute the notification process for every property within 60 days of the tax sale.
Kris Dalio, the city’s director of finance, said his staff is diligent about letting people know about the process and their obligations. Of the hundreds of properties with delinquent taxes each year, by the time of the tax sale that number is usually reduced to only about 10 properties.
Dalio said costs will balloon if the city is required to do all the work to contact hundreds of property owners in just two months. He said the cost of a registered letter is about $10, a process server will charge about $200 and substituted service would cost the city between $1,500 and $2,500 for each file.
“We can’t even start this process until after mid-May and we’d be given to the end of July to get a hold of hundreds of people for this,” said Dalio. “If every municipality is doing it, there might not be enough court resources to do substituted service and we would be set up to be non-compliant.”
The province has implemented the new legislation but has told Dalio it won’t take effect until 2025.
On-street parking
In other city hall news, council unanimously approved two recommendations to direct administration to conduct a full review of the on-street parking policies in the downtown C1 zone and the residential area surrounding University Hospital of Northern B.C.
Staff were asked to modernize the policy with a shift to a mixed model of free and paid parking that will increase access to parking in ways that encourage people to visit downtown businesses and provide better service for users.
The second recommendation asked for staff recommendations and amendments to the policy that will alleviate on-street parking pressure near the hospital, a problem made worse in recent weeks for healthcare providers, hospital staff and public visitors due to the ongoing construction of a parkade on Edmonton Street.
The recommendations are intended to provide immediate relief on those parking pressures while the full review of the Parking and Traffic Bylaw is completed.
