The City of Orillia will pay more than $1 million to a grocery store in a tax appeal settlement.
Zehrs appealed its taxes to the provincial Assessment Review Board after the city set the rate based on valuations provided by the Municipal Property Assessment Corporation (MPAC).
In a recent memo to city council, staff noted Zehrs will be paid $1,780,610, an amount retroactive to 2010.
The city will pay the full amount up front but will recoup $667,109 from the province’s education portion of taxes, leaving the municipality to pay a total of $1,113,501.
“It’s a very big number,” Mayor Steve Clarke said of the settlement. “It’s unfortunate that we’re in this situation. I’m not certain how we got here.”
The full amount will come from the tax rate stabilization reserve, he noted, which was created in anticipation of the possibility of significant tax appeals.
“I can’t overstate how important that tool has been,” Clarke said of the reserve.
Money will be added to the reserve over the years to replenish it.
Clarke said the situation with the appeal is “out of our hands” since municipalities set their rates based on MPAC valuations.
It seems that information “didn’t reflect the actual number for some of these situations,” he said, adding he hopes MPAC will “refine” how it assesses, which could result in fewer appeals.