Saskatchewan Assessment Management Agency Commercial Advisory Committee Meeting Minutes for October 26, 2004 Regina, Saskatchewan

Transcription

1 Saskatchewan Assessment Management Agency Commercial Advisory Committee Regina, Saskatchewan PRESENT: Craig Melvin, Committee Chair, SAMA Board Chair Fred Clipsham, Cities Sector Board member Sharon Armstrong, Urban Sector Board member Richard Douglas, Education Sector Board member Robert (Bob) Schultz, SAMA Board member Tanya Mullis, Saskatoon Broadway Business Improvement District Grace Muzyka*, Saskatoon Broadway Business Improvement District Tracy Fahlman, Regina Downtown Business Improvement District Rob Lawrence, Sask. Real Estate Association Gil Dobroskay, Sask. Real Estate Association Kevin Olmstead, Sask. Chamber of Commerce John Hopkins, Regina & District Chamber of Commerce Marilyn Braun-Pollin, Canadian Federation of Independent Business Ken Love, Canadian Property Tax Association Ken McKinlay, Sask. Home Builders Association Tom Mullin, Hotels Associstion of Sask. Glen Bosecke, National Golf Course Owners Association, Saskatchewan Chapter Dale Cumming, Inland Terminal Assoc. of Canada Reg Hinz, Western Grain Elevator Association Mike Schulkowsky**, Sask. Assessment Appraisers Association Grace Muzyka*, Appraisal Institute of Canada Observers: John Billington, Sask. Government Relations Mark Brothen, Sask. Government Relations Don Barr, City of Regina Gord Lawson, City of Saskatoon Mike Schulkowsky** for Harvey Fishbook, City of Prince Albert Mike Kehler, City of Swift Current SAMA Administration: Murray Cooney, CEO Stuart McDonald, Committee Secretary Irwin Blank Brad Korbo D-L Morley Gord Senz ABSENT: John Wagner, Rural Sector Board Member Ted Mitchell, Saskatoon Regional Economic Development Authority Brian Jamieson, Building Owners and Managers Association Rick Johnston, Canadian Energy Pipeline Association Dave Loader, Canadian Assoc. of Petroleum Producers Darrell Zwarych, Sask. Mining Association Ike Zacharopoulos, Railway Assoc. of Canada Ian McGilp, Tourism Saskatchewan Observers: Colleen Mackenzie, Sask. Industry and Resources Bruce Wilson, Sask. Industry and Resources David Pierce, City of Moose Jaw Cameron Duncan, City of North Battleford Agenda Item: Call to Order Committee Chair C. Melvin called the meeting to order at 10:05 a.m. 1. Approval of the agenda. No changes were made to the agenda. SAMA Commercial Advisory Committee 1

2 2. Minutes. Minutes for March 2, 2004: Under Item 5 Vision for the 2009 revaluation in general discussion change would to could so that the second bullet reads Setting the stage for a shorter revaluation cycle means that following the 2009 revaluation, the next revaluation could be in Moved by J. Hopkins that the minutes of the Commercial Advisory Committee s meeting for March 2, 2004 be adopted as amended. 3. Business arising from the minutes Annual Meeting Resolutions. None. I. Blank reviewed the proposed responses to the two resolutions that were adopted at the 2004 Annual Meeting. The SAMA board will consider the feedback from the advisory committees before finalizing its responses to the resolutions. General discussion: Bill 68 to amend The Assessment Management Agency Act (i) increases the SAMA Board from 9 to 11 members, (ii) removes Sask. Assessment Appraisers Association from the Board, (iii) increases boards of education from 1 to 2 members, and (iv) increases Provincial members from 2 to 4 members. The agency has advised Government Relations of issues identified with Bill 68. Moved by T. Mullin that the report be received. 5. Mandate and Structure of SAMA s Advisory Committees F. Clipsham reviewed the terms of reference materials for the agency s four advisory committees (city, commercial, rural and urban), and the membership changes made to the Commercial Advisory Committee. General discussion: Added Regina Chamber of Commerce as a voting member. Added National Golf Course Owners Association, Saskatchewan Chapter as a voting member. Moved Saskatchewan Industry and Resources, Industrial Development from voting member to observer. Moved Saskatchewan Industry and Resources, Resource Development from voting member to observer. Added City of Swift Current as an observer. Removed City of Lloydminster as an observer. Moved by F. Clipsham that the Commercial Advisory Committee accept the terms of reference as presented. Canadian Property Tax Association: Concerned that there are no stakeholders on the City Advisory Committee, and that the committee is comprised only of city and Board member representatives. SAMA Commercial Advisory Committee 2

3 5. Mandate and Structure of SAMA s Advisory Committees (continued) Base Year Manual Revisions. Concerned that the City Advisory Committee is comprised of self-interested groups advising the SAMA Board, which does not provide for full and fair consultation. I. Blank reviewed the proposed amendments to the 2002 Base Year Manual. The SAMA board will consider the feedback from the advisory committees before final approval. General discussion: A 3% difference between the manual and computer calculated fair values was selected because it could be met comfortably, and rounding rules alone may result in greater than 1% difference. The agency s SPAN system calculates within 1%. The maximum variance should be +3% or 3% of the manual value. Canadian Property Tax Association: Noted that the computer-generated fair value rule being added to Document 1.1.1, Page 2, is not clear as to whether the manual or the computer calculated fair value is deemed to be correct. Noted that the rule is not clear as whether the 3% variance is to be calculated as a variance from the manual value or a variance from the computer calculated value. Moved by R. Hinz the report be received. 7. Technical Development Committee (TDC) Recommendations. I. Blank and B. Korbo reviewed the Technical Development Committee s (TDC) Position Paper on Policy and Legislative Issues, and its Discussion Paper on the Provision of Information to Assessors by Property Owners. F. Clipsham reviewed the changes made to the final Vision for the 2009 Revaluation following earlier consultations with the advisory committees. Valuation discussion: o The difference between market value and regulated values is that regulated values are determined using rules passed by Board Order, which may tie the appraiser s hands at finding market value. o The TDC is aware of, but has not yet addressed, the issue regarding different regional and national markets. Canadian Property Tax Association: o Need to consider whether the lease will be assessed to the property owner or the tenant. May overvalue the interest of a particular tenant. o Need procedures to insure that there is no de-linking between market value and regulated properties. Regina & District Chamber of Commerce: o When considering the fee simple interest, need to be aware that government leases heavily impact Regina s SAMA Commercial Advisory Committee 3

4 7. Technical Development Committee (TDC) Recommendations (continued). downtown. o Unsure how mass appraisal will work effectively for commercial offices. o Concerned that it is not clear that appraisers need to start by working within the municipality before expanding out to a broader market. Western Grain Elevator Association: o Need to know whether heritage properties will be assessed on highest and best use. Saskatchewan Chamber of Commerce: o Informed that in Alberta there is a rule/legislation that cost based assessments are equal to market value for the valuation of railway type properties. Equity discussion: Canadian Property Tax Association: o Need assurance that there will be equity between market value and regulated assessments. o Concerned with the removal of the equity provisions. o Standards have to be there. o To build public trust need to be able to show everyone that they are assessed fairly. Appraisal Institute of Canada: o In the fair and just proportion provision the phase all similar property could be just similar property. The word all could be removed. Provision of information discussion: o The agency is working cooperatively on a pilot project. An interim report will be completed for next March s advisory committee meetings. o Information is needed in a timely manner because it is used for the valuation of a group of properties. The information is not useful if it is provided at the last minute. o Legislation must ensure the confidentiality of information that is provided. Regina & District Chamber of Commerce: o Would be concerned if the requirement was that the board of revision shall dismiss the appeal if information not provided to the assessor. Canadian Property Tax Association: o Regulators shouldn t be trying to force compliance. o The Saskatoon experience with meeting with the business community has been positive. o Need assurance that there will be equity between market value and regulated assessments. Appraisal Institute of Canada: o Object to requiring contractors to provide information. o The assessor should be dealing with the property owner as the best sources of information. SAMA Commercial Advisory Committee 4

5 7. Technical Development Committee (TDC) Recommendations (continued). Recessed for lunch from 12:20 to 12:50 p.m. R. Lawrence and G. Senz joined the meeting at 12:50 p.m. K. Love excused himself from the meeting at 12:50 p.m. T. Mullin excused himself from the meeting at 1:00 p.m.. Provision of information discussion (continued): o The TDC needs to develop a standard information request form. o An income form has been developed for the pilot project and is posted on SAMA s website. Saskatchewan Chamber of Commerce: o Suggested that there should be a definition of what is meant by information. o Provision of information has been an issue in Alberta because it is open-ended to the extent that it is anything the assessor deems necessary. o Opposed to having contractors provide information. o Third parties should not provide information without the authority of the property owner. Inland Terminal Association of Canada: o People will drag their feet on providing information if the don t know why the assessment system is changing. Appeals discussion: o A major mindset change will be required throughout the system including the appeal process. o An alternative dispute resolution strategy is needed to deal with fact-finding and potential agreement to resolve issues before going to appeal. Saskatchewan Chamber of Commerce: o Appeal system deadlines need to be flexible. o Concerned that an appeal might be denied if the contractor refused to provide information. o Appeal arguments often develop over a number of years. o Need to shorten the time between hearing appeals and making the decision. Boards need to decide appeals sooner. Communications discussion: o A major mindset change will be required throughout the system including the appeal process. o Two educational sessions on the move from a regulated system to a market value system are being organized for February They will be held in Saskatoon and Regina. Speakers will include: (i) a major city in Canada that has moved from regulated to market value, and (ii) a private sector appraiser from Ontario with experience representing property owners. SAMA Commercial Advisory Committee 5

6 7. Technical Development Committee (TDC) Recommendations (continued). Western Grain Elevator Association: o Communication will be a huge job. o The Commercial Advisory Committee is dealing with the issues more than any other segment, and still needs to be refreshed on issues. o For the educational sessions in February, should consider getting a property owner who has property in Saskatchewan and in other jurisdictions to bring forth their experiences. Valuation discussion (continued): o The milestones to get to market value in 2009 are critical. Timelines are very short. Values by January 1, Market analysis in Obtain information in 2005 and Canadian Federation of Independent Business: o Supports giving assessors more and better appraisal tools to reach the market value goal. o Supports market value assessments. o Property owners need to know that the process is fair. o Assessments needs to be equitable for everyone. o One current problem is that obsolescence is often not accounted for in assessments. The income approach should help quantify where there is obsolescence that the current system doesn t recognize. Regina & District Chamber of Commerce: o The business community has been at the table and has advocated market value assessments for some time now. K. Love rejoined the meeting at 2:00 p.m. Moved by R. Hinz that the report be received. C. Melvin requested that any additional feedback, comments or recommendations with respect to (1) the Position Paper on Policy and Legislative Issues, (2) the Discussion Paper on Provision of Information to Assessors by Property Owners, or (3) the February 2005 educational sessions be sent to M. Cooney, CEO. 9. SAMA Board recommended 2005 legislative changes. I. Blank reviewed the proposed legislative amendments the agency would like made in General discussion: The assessor should request property owners to get information from a contractor instead of going directly to the contractor. Should have a standard form for the property owner to sign that authorizes the contractor to provide information. Need to consider what level of detail the contractor will be expected to provide. SAMA Commercial Advisory Committee 6

7 9. SAMA Board recommended 2005 legislative changes (continued). Need to consider whether subcontractors will also be required to provide information. Canadian Property Tax Association: Opposed to changing the requirement for the board of revision from may to shall dismiss the appeal if information is not provided. The statutory power of the assessor to require information is far too broad. Board of revision should be allowed to determine whether the request was reasonable and adjudicate on compliance. What was asked for and did the owner do as much as he could to provide the information? Can t deny the right of appeal on a blanket basis. May allows for a no fault situation. Saskatchewan Chamber of Commerce: Tax agents know the system so should be complying. Small property owners shouldn t be penalized because they understand the system less. Moved by R. Lawrence that the report be received. R. Douglas excused himself from the meeting at 3:00 p.m Government Relations Discussion Paper on Organizational Location Options for Assessment Audit. C. Melvin advised that the reporting relationship between Audit Division and the SAMA Board is being addressed by the Board as an issue arising from the June 2003 Confirmation Process Review Hearings. The Board s report will be released in December M. Brothen, Sask. Government Relations, reviewed the report. Feedback is to be provided directly to Government Relations by the end of November. Canadian Property Tax Association: Recognizes the growing importance of the audit function over the past few years. None of the three options fully address the issues. SAMA could/should empower the appointment of an independent auditor. The SAMA Board would still be accountable. The auditor would take direction from the Board, and would report directly to stakeholders. The Sask. Assessment Appraisers Association does not offer independence. Western Grain Elevator Association: The highest degree of confidence with the public comes from complete independence. Saskatchewan Assessment Appraisers Association: The SAAA is interested in taking on the audit function and is preparing a submission to Government Relations. SAMA Commercial Advisory Committee 7

8 10.2 Government Relations Discussion Paper on Assessment System Revaluation Cycle. M. Brothen, Sask. Government Relations, reviewed the report. Feedback is to be provided directly to Government Relations by the end of November. Regina & District Chamber of Commerce: Market values are charging but are not being accounted for soon enough in assessments. If going to market value, then the revaluation cycle needs to be shorter. The base date also needs to be closer to the revaluation date. Saskatchewan Assessment Appraisers Association: The availability of qualified appraisers is an issue that is being addressed. The SAAA manages education and training for appraisers. Recommended that should have one full cycle of market value in 2009 and again in 2013 before moving to a shorter cycle. Saskatchewan Chamber of Commerce: Agrees with the shorter assessment cycle because it would help to minimize wild valuation shifts. There may be some validity to a different cycle to protect a sector such as agricultural land. T. Fahlman excused herself from the meeting at 3:45 p.m. Moved by J. Hopkins that the Government Relations reports be received. 8. Agricultural Land Review Committee Vision for the 2009 agricultural land model. I. Blank reviewed the materials. Inland Terminals Association of Canada: In order to get an even playing field using the productivity system, then need to look at an organic farm. Moved by G. Dobroskay that the report be received. 11. Other business. The Board has set the dates for the 2005 Commercial Advisory Committee meetings: March 21, 2005 October 25, 2005 Adjournment Moved by M. Schulkowsky that the meeting adjourn at 4:05 p.m. Original signed by Stuart McDonald Stuart McDonald Committee Secretary SAMA Commercial Advisory Committee 8