Residents who fall behind in their taxes or utility bills could have an additional 12 months — or more — to pay those arrears if they join one of two municipal programs before January.
The City of Moose Jaw has a water instalment payment plan service (WIPPS) program and a tax instalment payment plan service (TIPPS) program that allows participating homeowners and property owners to make monthly payments for teach type of billing.
City hall designed WIPPS to reduce the quarterly utility billing to a monthly payment plan for homeowners and businesses struggling with larger quarterly bills. TIPPS is for property owners to pay back their taxes in monthly instalments without incurring penalties for the outstanding balance past the annual due date.
During its April meeting, city council directed city administration to review both programs and bring revisions to make them more flexible. This was part of overall financial efforts to alleviate any problems residents or businesses have faced with larger balances during the pandemic.
City administration returned with recommendations for both policies during the May 11 regular meeting. Council voted 6-1 to approve the changes to each program; Coun. Brian Swanson was opposed.
Explanation of programs
There are 1,860 customers who use the WIPPS program and there is room for more customers to join, finance director Brian Acker explained.
For example, customers with an annual utility bill of $1,200 would typically pay $100 a month. If they ran into hardships during the pandemic and couldn’t pay $600 and fell into arrears, they could join the program penalty-free. Throughout 2021, they would be able to pay off the outstanding amounts, but instead of $100 per month, it would be $150.
Entry into the WIPPS program typically requires a utility account to have a zero balance before it’s accepted. As a one-time special provision, any utility account holders who choose to use the program to make smaller, manageable monthly payments will have a zero-balance requirement waived if they apply by Thursday, Dec. 31.
If property owners pay $2,400 a year in taxes, they would typically pay $200 a month, said Acker. If they fall into arrears by Sept. 30, they can join the TIPPS program and have their payments spread out over the next 12 to 15 months. They would repay $200 a month for the remainder of this year and then pay $350 per month in 2021.
Usually, penalties on properties in arrears are 1.1 per cent compounded monthly and would start Jan. 1, 2021. With the pandemic provision, all property taxes for 2020 and 2021 would have to be paid by Dec. 31, 2021. If they’re not, city hall would remove the account from the program and subject it to penalties under the bylaw.
“We will work with our customers to explain how the program works. Our experience with customers is once people understand the process, there is a benefit to them and knowing what the regular amounts will be,” Acker said, adding customers who join the program also provide regular cash flow to the municipality.
The municipality would lose $273,407 in property tax interest revenue if every customer enrolled in TIPPS, while it would lose $70,044 in penalty revenue from its water utility budget and $55,200 from its sewer utility budget — all losses in 2021 — if every customer enrolled in WIPPS.
There would also be additional costs to manually manipulate some of the properties in the TIPPS program, as the computer program is not advanced enough to allow for these changes, added Acker.
The next regular council meeting is Monday, May 25.
