The City of Trail could receive another half a million dollars from its greatest municipal taxpayer, Teck Trail Operations.
The reason is that the company failed to meet the Aug. 31 extended property tax deadline, which means Teck owes the city a 10 per cent late fee or more than $550,000 in late penalties.
“As noted, there was one significant payment that was received one day after the tax due date,” said the city’s Chief Administrative Officer, David Perehudoff.
“And this results in a significant revenue gain when the 10 per cent late penalty is applied to the current total property tax balance outstanding.”
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Trail’s Deputy Director of Finance, Rino Merlo, submitted a summary of his report on the 2020 Trail property tax collections at the Sept. 28 governance meeting.
In all, the city collected over 97 per cent, or $22.2M of its total consolidated tax levy, although, almost a quarter of that total or $5.5M came a day late.
The city had received in excess of $16-million in municipal taxes by the Aug. 31 deadline, before the payment from Teck Trail Operations came through on Sept. 1, carrying an estimated $550,000 late fee.
The city had extended the traditional July 2 deadline to Aug. 31 and froze a scheduled tax hike due to the onset of the coronavirus.
To help the city pay its own provincial and federal taxes on Aug. 1, Teck Trail Operations made an early payment of half their taxes owed.
“They responded positively to the city’s request and graciously made a voluntary payment of $5.561 million on July 2 and this left them with an outstanding current property tax balance of $5,561,630,” explained Perehudoff.
Unfortunately, Teck’s second payment was not received until Sept. 1; one day after the Aug. 31 due date, he clarified.
“The outstanding balance of current property taxes after the due date resulted in a total penalty charge of $556,163 when the 10 per cent was applied.”
As a result, the city estimates its late penalties will exceed $600,000 compared to its original estimation of about $64,000.
Teck Trail Operations made a brief statement to the Times inquiry saying, “We are currently reviewing the late tax payment and will be discussing the issue with the City of Trail.”
Tax revenue is the single greatest resource for the city, and last year the 2019 taxes accounted for 66 per cent of total municipality revenue.
The next highest is sales of services at just over 14 per cent.
Trail’s total 2020 tax levy neared $23 million, which is down about $400,000 from last year.