OLDS — The town will not be receiving extra revenue from businesses or residential additions after a bylaw for that failed to receive final approval.
The bylaw, laying out the rules for supplementary property assessments, died when the vote for third reading ended up in a three-three tie. A seventh councillor, Heather Ryan, was not present for the vote.
Supplementary assessments allow the Town of Olds to assess improvements added to a property after Dec. 31 and collect property taxes on a pro-rated basis for the remainder of the tax year.
During discussion, acting chief administrative officer and finance director Sheena Linderman gave an example: a house that was 50 per cent completed when the tax notice went out in May. It would thus be taxed at 50 per cent.
Once it’s completed, say in July, then it would be taxed for the other 50 per cent as well.
“The bylaw was defeated, meaning there will not be supplementary assessments and corresponding supplementary tax notices issued in the Town of Olds for 2022,” Linderman wrote in an email.
“We do not budget for supplementary tax revenue, as it is an unknown,” she added.
Defeat of the bylaw came after Coun. James Cummings suggested dropping supplementary tax assessments for a year on businesses that expand. He said that could be a way to encourage local businesses to expand and thus spur the economy.
However, other councillors, while expressing support for business-spurring incentives, worried that dropping those assessments would cut into town revenue.
Cummings asked Linderman if it’s costly for the Town of Olds to have supplementary assessments done. Not really, Linderman indicated.
"It's not administratively heavy to do,” she said. “We just have to pay our assessor a little bit more to do the supplementary.”
Linderman said that over the past four years, revenues received by the Town of Olds via supplementary assessments have ranged from a low of about $4,000 to a high of more than $26,000.
“Would you consider that a significant amount, budgetarily,” Cummings asked.
“No,” said Linderman.
That being the case, Cummings suggested the municipality not undertake a supplementary assessment on improvements businesses make that expand their operations.
“If we use that as a business incentive instead, we don’t do a supplementary tax assessment on that expansion of their business we are thereby, in my opinion, promoting the expansion of business, which is something I believe we all want to see in the town of Olds,” Cummings said.
“I would rather us see this as an incentive — a tax incentive you could call it -- just for a few months, an insignificant amount of money towards our budget, rather than nickeling and dimeing every business every time they try to expand.”
Mention was made that supplementary assessments are also done on improvements to residential property.
Cummings said that’s not really what he’s talking about, because he considers the impact from those improvements to be much lower than the expansion of a large business would be.
“No homeowner’s going to delay the construction on their garage because they’re going to save $5 on the municipal tax bill by having a supplementary tax bill bypassed. That would be ridiculous to expect.
“But it is not ridiculous, I think, to expect a million-dollar addition to a factory,” he said.
Coun. Darren Wilson indicated support for Cummings’ position.
“I am enthused about incentivizing development in the town and encouraging growth, particularly on the business side,” he said.
However, Coun. Wanda Blatz said if the Town of Olds did not undertake supplementary assessments, it would forgo revenue. It may not be much, but “revenue is revenue,” she said.
Blatz also expressed concern that undertaking supplementary assessments for businesses but not residential properties would be “a nightmare” for administrative staff.
Linderman said she’d have to examine legislation to determine whether those two kinds of properties can be separated when it comes to supplementary assessments.
Mayor Judy Dahl said she liked the discussion but called for administrative staff to obtain more details on the issue and perhaps provide them in the future.
