City will Retain .5 Mil Rate Reduction for Residents not Connected to Water and Sewer

During the tabling of Budget 2016- 18, Council directed staff to further explore the issue of properties not connected to the City’s water and sewer service.

Upon closer examination of The City of St. John’s Municipal Taxation Act and in consultation with the City Solicitor, City Manager Neil Martin has directed staff to reinstate the .5 mil reduction for those properties that do not have access to City supplied water and/or sewer services.

“The Act places an obligation on Council to set the real property tax as a percentage of the assessed value,” explained Mr. Martin. “This left staff with the impression that the remaining subsections were discretionary. However, after seeking a legal opinion, we now believe that the reduction is in fact a requirement.”

The provision of a mil rate reduction is authorized under s.4(3) of The City of St. John’s Municipal Taxation Act which states:

• 4 (3) The council shall annually fix, establish and impose special reduced rates of real property tax applicable to buildings in the city to which water mains or sewer mains or both are not accessible for servicing those buildings with water services or sewer services or both.

The forecast savings resulting from the elimination of the mil rate reductions were in the range of $450,000 per year. Staff will identify similar savings through a combination of expenditure reductions already realized through the Early Retirement Initiative Program and to-be-identified cost savings from new continuous improvement/program review initiatives.

2016 tax bills for the affected properties will reflect the applicable mil rate reductions.

Media Contact:
Kelly Maguire
Media Relations
City of St. John's
709-576-8491
kmaguire@stjohns.ca