City administration will be reviewing the St. Albert's Tax Penalty Bylaw for potential changes after late fees were issued, in at least one case, when residents thought they had paid their property taxes on time, but their funds weren't deposited until the business day following the payment deadline.
Although the deadline for property tax payment this year, June 30, remained unchanged from previous years, June 30 this year was a Sunday, which is just the seventh time since the turn of the millennium that the property tax deadline fell on a weekend.
For St. Albert resident Tony Lutzmann, who pays his property taxes by setting up an automatic electronic fund transfer (ETF) to go through on the payment deadline day, having June 30 fall on a weekend meant his payment wasn't processed until July 2, which led to the city issuing him a late penalty of 4 per cent of his overall property tax bill.
“I assumed that it was on time, that I met the deadline,” Lutzmann explained. “But say two weeks later I received a bill in the mail charging roughly $250 in tax penalties.”
“I was surprised by that because I thought I paid my taxes on time.”
After a bit of back and forth with city staff, Lutzmann's late penalty was waived as he was able to prove that he had every intention of paying his taxes on time by providing the city with documentation that his ETF was scheduled for June 30. But Lutzmann said he's concerned other residents in the same position as him might not even realize they've been charged a late fee, and as such he wants to see the City change its policy for managing this situation moving forward.
“Although it wasted a lot of my time having to deal with the problem, [city staff] did their very best to try and rectify the situation,” Lutzmann said. “My main concern now is that many people will not have the wherewithal or the time to chase down this issue and to resolve this problem with the City, so there are people out there who are going to receive this tax penalty bill and they're just going to pay it.”
City spokesperson Kathy deJong said in an email that staff will be reviewing the policy to provide clarity, but did say the City tried to warn residents about the potential for payment deadline issues in the month of June by communicating that people should plan to pay ahead of the deadline through advertisements in the Gazette, social media posts, posts on the city's website, and by drawing attention to it on the tax notices issued to every property owner.
“The City notified residents and businesses through a number of measures to ensure ratepayers were aware of the deadline,” deJong said. “Information about payment deadlines, payment options, providing three to five business days for payments to be processed and to ‘plan ahead’ were communicated on the back of the tax notices, City website, social media, and newspaper throughout June.”
St. Albert Place front counter service hours will be extended between May 24 to 28 from 9 a.m. to 5 p.m. Note: June 30 is a Sunday, plan to pay ahead!
— City of St. Albert (@CityofStAlbert) June 27, 2024
deJong wasn't able to say just how many people were likely issued penalties that were in the same position as Lutzmann, but she did say that of the 1,814 late penalties issued so far this year, 173 were for ratepayers who paid their property taxes online like Lutzmann did.
“There are a variety of reasons for late payment and the majority are unrelated to electronic fund transfers,” she said. “In the case of an electronic payment being made to the City, the financial institution only provides the date the payment was received and not the date the payment was made.”
“Proof of electronic payment before the deadline can be confirmed by either a screenshot or financial institution records. If the payment records show the required dates, administration will then move forward with cancelling the penalty fee.”
Lutzmann, who once worked as an assessor for the City of Grande Prairie, said requiring residents to provide proof their online transfers were scheduled to go through prior to the deadline in order to avoid late penalties means that residents are being “treated differently” based on their chosen payment method, especially because the city told him (and the Gazette) that if residents had submitted a postdated cheque for June 30, a penalty wouldn't have been issued, even though a cheque also wouldn't have been processed until after the deadline.
“They're shifting the onus to prove that the payment was made on June 30 based on the fact that [the city is] not receiving the funds until a few days later because of the long weekend,” he said. “What is the definition of payment? Is it when you give the payment to the city? Or is it when it ends up in their bank account — which, to me, is unreasonable.”
In all, Lutzmann said he'd like to see St. Albert change its Tax Penalty Bylaw to address this situation similar to how Edmonton and Grande Prairie have.
Edmonton's tax penalty bylaw, for example, says that when the payment deadline falls on a weekend, the deadline is extended to the next business day and no penalties will be issued.
On the other hand, Grande Prairie addressed the situation this year by making the payment deadline fall on the last business day of the month, which was June 28.
deJong did not provide a date for when the city's bylaw review will be completed, or when any potential amendments will be brought forward for council's consideration.
