Irricana town council held a special meeting prompted by a letter from Municipal Affairs (MA) on Nov. 26 to inform residents they have been overpaying, and in some cases underpaying, their municipal and education taxes “a substantial amount” over the last four years.
According to MA in 2011 the Town overcharged municipal taxes by $26,244, in 2012 taxpayers were overcharged $25,253, in 2013 residents were overcharged by $27,289 and this year taxpayers were overcharged $5,832.
“To put it in context, (a $26,000 surplus) is approximately $30 million for the City of Calgary,” said Chief Administrative Officer (CAO) Geoff Stephenson.
Stephenson said there was no way for council to know of the error because previous CAOs didn’t bring it to councillors attention while amending tax rate bylaws, include it in year-end reports or include the oversights in management reports.
This isn’t the first time MA has been involved in Irricana. In 2012, the Town was ordered to complete a list of directives, supervised by MA, because the Town was managed in a “irregular, improvident or improper manor.”
When Councillor Laura Thiessen asked how council could be more informed of these issues, Stephenson said currently, council relies on reports from staff and processes need to be changed so they can be more aware in the future.
“We were overtaxed too,” Thiessen said.
After hearing about the overtaxing, 15-year resident Erwin Ritz said he doubts council will ever win his trust back.
“These bylaws are drafted by idiots who don’t know what they’re writing and council passes it anyway,” he said.
There have just been too many “scandals,” he said, and this one doesn’t surprise him.
“It’s unfortunate if there’s a lack of trust during this administration,” Squires said. “But we’re the ones who discovered it.”
“I hope the fact that we made residents aware of the issue creates some more trust,” she said. “We were given the choice and we could have decided to not say anything.”
Though Stephenson said no one has been officially held professionally accountable because of the oversights, he said some staff have gone on personal leave though he can’t speak to why or whether it was related to the recent incident.
“(Irricana) has had some issues but I wouldn’t call it chronic,” Stephenson said. “Stronger financial controls are needed.”
The issue was brought to the attention of council and MA in September while auditors investigated an education tax problem for 2014.
MA was not present at the Nov. 26 meeting. MA investigators involved with the tax issue could not be reached for comment as of press time.
Stephenson said the 2011 to 2013 municipal over-taxation was proportional, meaning taxpayers all overpaid based on the same percentage. This year the rate was not evenly spread, meaning some residents overpaid and need to receive a refund while others underpaid and need to be billed appropriately.
Depending on how much residents overpaid or underpaid, the Town reimbursed, credited, billed or wrote-off the incorrect tax amounts on Dec. 1.
It could not be confirmed as of press time, whether the Town met the Dec. 1 deadline.
Residents who overpaid their taxes from 2011 to 2013, Stephenson said, will not receive a refund as the Town already spent the $26,244, $25,253, and $27,289 and the deadline to challenge the amount has passed.
The 2011 to 2013 tax surplus, Stephenson said, was directed to areas that went over budget during those years. Administration costs, parks and recreation and streets were all over budget and received funds from these surpluses, though Stephenson said no one ever told council where the money came from.
Larry Martin, Maxwell Realty business manager and former Irricana council member said he understands the difficult situation the current council is in because he was also unaware of the taxation issues when he was on council from 2010 to 2013.
“It was obviously wrong and should have never happened,” Martin said. “But it sounds like it was a clerical error and we have the best staff… I trusted them.”
Education taxes
In addition to municipal taxes, Irricana residents learned education taxes were also distorted in 2011 and 2014.
Some residents, depending on whether they supported the separate school board or the public school board, paid different amounts.
This year, Catholic school board supporters paid up to 27 per cent less than public school supporters while in 2011, Catholic school supporters paid up to 56 per cent more, despite the fact both separate and public should be the same amount.
Though the percentages are extreme, Stephenson said, the Town is legally allowed to overtax for education and roll the amount over for the next year.
Solution
Stephenson said he takes full responsibility for the mistakes in council over the last four years.
Stephenson has only been acting CAO since Sept. 15. Since 2011 there have been three CAOs in the Town: Carol White, Alvin Melton and Bob Payette. White resigned in 2011, Melton’s contract was terminated in April and Payette resigned at the end of August.
The 2014 issue was brought to council in late September, he said, and was addressed in-camera on Oct. 6. A motion was made publicly after the Oct. 6 meeting requesting staff to contact MA so council could rectify the issue.
The real problem though, Stephenson said, is the lack of transparency for taxpayers as well as policy issues.
To rectify this, he suggested to council ethics training for all staff, including CAOs, tax bills be checked regularly and the bills themselves should have instructions so residents can be sure they are paying the correct amount.
