TAMRMS#: B06
9.1
REQUEST FOR DECISION
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Public Tax Sale
Presented by: Stephen Bannerman, Senior Manager, Finance and Strategic Services
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RECOMMENDED MOTION(S)
recommendation
1. That the City Assessor be delegated the responsibility under section 419(a) of the Municipal Government Act to set a reserve bid for each parcel of land on the tax arrears list that is to be offered for sale at the October 23, 2024 public tax sale, with the condition that the City Assessor set the reserve bid as close as reasonably possible to the market value of each property.
2. That the Terms and Conditions of Sale, provided as an Attachment to the September 17, 2024 agenda report entitled “2024 Public Tax Sale”, be approved.
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SUMMARY
This report provides Council with an overview of the tax recovery process and the steps leading up to a possible tax sale on October 23, 2024. It also recommends that Council take certain mandatory steps in preparation for the tax sale. Further details are included in Attachment 1 labelled, “Tax Recovery Process”.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
The recommendations in the report arise from mandatory provisions in section 419 of the Municipal Government Act.
BACKGROUND AND DISCUSSION
Municipalities are required to follow a statutory process, set out in Part 10, Divisions 8, 8.1 and 9 of the Municipal Government Act (“MGA”) to recover property taxes that remain unpaid after December 31 of the year in which the taxes are imposed (“tax arrears”). The tax recovery process is described in more detail in Attachment 1, and is summarized as follows:
• A property for which taxes are in arrears for more than one year is placed on a “tax arrears list” which leads to a tax recovery notification being placed on the Certificate of Title to the property.
• If the taxes remain in arrears until March 31 of the following year, the municipality must put the property up for sale by public auction.
• If the property is sold at the public auction the municipality receives as much of the sale proceeds as required to pay off the tax arrears, including penalties for late payment.
• If the property is not sold at public auction, the municipality has the option to acquire title to the property, free and clear of most financial encumbrances. The municipality may then sell the property provided that the sale price is as close as reasonably possible to market value.
• At any time through the process, the person liable to pay tax may settle the tax arrears or enter into an agreement with the municipality for payment over time.
Typically, property owners or their mortgage lenders will make arrangements to settle the tax account before it reaches the stage of public auction. However, the City must still make provisions for a public tax sale, should it be necessary. For each parcel that will go to auction if the tax arrears are not paid, Council must establish a reserve bid price as close as possible to market value (or delegate that task to the City Assessor) and also approve the terms and conditions of sale.
As of September 5, 2024, there remains 1 property on the outstanding tax arrears list.
If required, the public auction is scheduled for 3:00 p.m. on Thursday October 23, 2024 in the Douglas Cardinal Boardroom of St. Albert Place. Terms and conditions of the sale are summarized in Attachment 2.
The parcel of land shown in Attachment 3, titled “2024 Tax Sale List”, will be offered for sale, unless taxes are paid in full or suitable payment arrangements are made.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
• Affected property owners have been sent arrears notices on a regular basis to inform them of the additional penalties being applied to their accounts and encourage them to enter into payment arrangements to avoid tax sale proceedings.
• As per the Municipal Government Act (s.412), affected property owners have been contacted by the City to notify them that they are part of the Tax Notification List.
• Affected property owners, and those parties having a registered interest as recorded on the land title document, will be sent notification of the impending tax sale per tax recovery legislation.
• Taxation staff work continuously up until the date of the tax sale, to contact and engage with affected property owners to encourage payment of the tax account in full or to make suitable payment arrangements.
IMPACTS OF RECOMMENDATION(S)
Financial:
As of September 5, 2024, arrears portions on the property listed amount to less than $20,000 rounded.
Compliance & Legal:
Holding the public auction satisfies the requirements of the MGA (s.418). Section 419 of the MGA also requires that reserve bids and conditions of sale be established before the sale. Following the public auction process the City could, if it wished, obtain title to properties for which taxes are not paid and which were not sold at the auction.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks:
Per section 418 of the MGA , each municipality must offer for sale at a public auction any parcel of land if the tax arrears are not paid. Without a public auction, the City would not be in compliance with the MGA. Within the City of St. Albert, the public auction is annually scheduled every October.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
N/A
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A
IMPACTS OF ALTERNATIVES CONSIDERED
Since the provisions of section 419 of the MGA concerning the establishment of reserve bid amounts and terms and conditions of sale are mandatory, no alternatives are considered.
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Report Date: September 17, 2024
Author(s): Stephen Bannerman
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher