One could consider it somewhat unusual that Wellington County was at here on Jan. 17 looking for a tax writeoff for one of the properties it currently leases – specifically the former Wellington Terrace.
The building is now the Heritage River Retirement Home.
Mayor Joanne Ross-Zuj stepped out of the discussions declaring a conflict of interest because she was related to one of the proponents.
Wellington County treasurer Craig Dyer outlined the case to Centre Wellington councillors at its Jan. 17 committee of the whole meeting.
Council was already aware that it staff supported the county’s request for the write-off of taxes pursuant to the Municipal Act, Section 357 and 358.
This request relates to a change from the multi-residential to the residential tax class.
While Dyer promised not to go through the submission word-for-word, he offered to go through a number of highlights.
Dyer said that in 2005, Wellington County Council passed a motion to lease and sell the former Wellington Terrace property in Elora to the Heritage River Retirement Community Corporation. Heritage River is owned by Bob Cameron, a resident of Elora.
Dyer said Cameron has made extensive renovations to the building to turn it into a 102 unit retirement home.
Cameron is leasing the property until July 2012 at which time there is a mandatory purchase clause.
At that point the property would be owned outright by Heritage River.
“The issue, is the assessment on the property.”
The building first began to be occupied in 2008, when it became liable for additional property taxes.
He said that in 2010, MPAC assessed the property and the supplementary/ omitted assessments were provided and resulting tax bills were produced.
Because the county still owns the building, “the tax bills come to us and we have the responsibility for paying them.”
Heritage River would be invoiced for that same amount.
The issue at hand is the classification of the property, Dyer said.
MPAC has classified the property as multi-residential rather than residential.
As a result, the tax bills going back to 2008 are roughly twice the amount that was expected – about $345,000, Dyer said.
He said “the county position is that the multi-residential classification is incorrect.”
Dyer said there are a number of reasons why the could believes that is the case.
“We do not believe these units are self-contained.”
He said residents at Heritage River are not able to cook their own meals and the building is not wired to support that within the individual units.
As well, the agreements signed by the residents prohibits cooking in the units.
“We’ve looked at retirement homes across the province and have found a very small number that actually have a residential component.”
Two of those are currently under assessment reviews.
Dyer anticipated a forthcoming Ontario regulation will classify all retirement homes as residential properties.
He said that pending legislation will provide MPAC with guidelines necessary to conduct a province-wide review of all relevant properties.
As a result he anticipated the property will revert to the residential class once the legislation reaches final passage.
“Unfortunately this does not help with taxes owing on this property for 2008, 2009, 2010 and the current 2011 taxation year.”
Dyer said the one main reason to support the county’s request “if the assessment classification is allowed to stand as multi-res, the residents in Heritage River will be paying taxes at twice the amount of residents in any other retirement home in Wellington County.”
The second reason is that the physical characteristics of the building do no support the multi-residential classification, Dyer said.
He noted that approval of the application would result in Approving these applications will result in the property paying taxes as a residential property for 2008, 2009, 2010 and 2011.
As owner of the property, “we understand the obligation to pay the taxes – so we have paid the two installments in full.”
The request, is that the property be taxed the same way as other retirement homes in the community, Dyer said.
Councillor Kirk McElwain asked why the county did not choose to go through the reassessment appeal process to have the problem fixed rather than work around it.
Dyer said there were discussions with MPAC about the issue, and that the county disagrees with the classification of the property.
“We’re not hopeful at all that a request for reconsideration will be successful.”
The reason, in part, he said, is because of similar assessment reviews underway in other parts of the province.
He added that the current situation is “creating a significant cash flow problem for the operator.”
Dyer said approaching Centre Wellington was considered the best means of dealing with the 2008, 2009, and 2010 taxes in a reasonable period of time.
“The appeared to be the only practical way of doing that.”
He anticipated seeing the classification revert to residential in 2011.
Councillor Kelly Linton said there are a lot of citizens who are questioning their MPAC assessments.
While he realized the scale was different, Linton asked if this would set a precedent as a council.
He said it may not be seen favourably by residents who are asking similar questions.
Dyer said he was not certain he was in a position to respond, because the applications are also directed to the municipality.
Centre Wellington treasurer Wes Snarr added “I’m a little miffed with MPAC for forcing us to jump through these hoops to fix something that should never have happened in the first place.”
Councillors passed a motion to approve the county’s request at its Jan. 24 meeting.
