title
BUDGET INFORMATION REQUEST (BIR) - Late Penalty Revenue
Requested by: Councillor Hughes
Date of Request: November 5, 2025
Date Response Due: November 12, 2025
Confidential: No
label
QUESTION
recommendation
Please provide the total late penalty revenue in 2023, 2024, 2025 (to date and revised budgeted), and budgeted for 2026.
body
PURPOSE
The primary reason municipalities impose tax penalties is to promote timely payment of property taxes and encourage compliance. When tax payments are delayed, the City may experience cash flow challenges that can affect its ability to fund essential municipal services. Penalties act as a deterrent against late payment and help maintain predictable revenue inflows.
LEGISLATIVE AUTHORITY
The authority to impose tax penalties is granted under Part 10, Sections 344 and 345 of the Municipal Government Act (MGA).
Within the City of St. Albert, penalties for the non-payment of property taxes are established under Bylaw 38/2019 - Property Tax Penalty Bylaw.
CURRENT PENALTIES
Penalties are imposed on any portion of current year taxes remaining outstanding as of June 30, on the following dates and at the specified non-compounded rates:
• July 1: four per cent (4%)
• August 1: six per cent (6%)
• October 1: six per cent (6%)
•
Taxes and penalties remaining unpaid after December 31 of the year they were levied become tax arrears. Penalties are imposed on tax arrears on the following dates and at the specified compounded rates:
• January 1: six per cent (6%)
• April 1: six per cent (6%)
• July 1: six per cent (6%)
RESPONSE-SUMMARY OF TAX PENALTY REVENUE
In February 2025, four years of actual tax penalty revenue were used to determine the budgeted tax penalty revenue for 2026.
• 2021 Tax Year: $1,167,532
• 2022 Tax Year: $1,209,964
• 2023 Tax Year: $1,223,077
• 2024 Tax Year: $1,230,838
4-Year Average: $1,207,853
• An initial budgetary requirement of $1,220,000 (rounded) was formulated from this average.
ADDITION OF 2025 (ACTUAL) PENALTIES
The November 6th 2025 penalty revenue of $1,399,993 is considered a reliable indicator of total 2025 revenue, as no further penalties are assessed in November or December.
The current 2025 projection of $1,450,000 is therefore overstated by approximately $50,000.
Recalculating the average with 2025 actual results provides an increase:
5-Year Average: $1,246,281
UTILITY LATE PENALTIES
The utility late penalties budget and actuals are as follows:
The 2025 data is current as of November 14, 2025. The late-payment penalty has remained at 2.5% from 2023 to the present and is applied only to outstanding current-month utility charges that are not paid by the due date.
In 2023, a Utility Transfer to Tax fee of $20 per transfer was implemented to recover the administrative costs associated with transferring outstanding utility balances to the property tax account.
Reported in the actuals above includes a total utility transfer to tax fee of:
2023: $11,320
2024: $23,200
2025: $25,600
RECOMMENDATION
Based on the updated five-year average, administration supports adjusting the 2026 property tax penalty revenue budget upward by $30,000, resulting in a revised budget estimate of:
Revised Budget: $1,250,000
body
Report Date: November 12, 2025
Author(s): Stephen Bannerman
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher