Saskatchewan Assessment Management Agency Commercial Advisory Committee Regina, Saskatchewan PRESENT: Fred Clipsham, Cities Sector Board member Richard Douglas, Education Sector Board member Robert (Bob) Schultz, SAMA Board member Tanya Mullis for Grace Muzyka, Saskatoon Broadway Business Improvement District Tracy Fahlman, Regina Downtown Business Improvement District Rob Lawrence, Sask. Real Estate Association Rich Jeanneau for Gil Dobroskay, Sask. Real Estate Association John Hopkins, Regina & District Chamber of Commerce Marilyn Braun-Pollin, Canadian Federation of Independent Business Ken Love, Canadian Property Tax Association Reg Hinz, Western Grain Elevator Association Mike Schulkowsky, Sask. Assessment Appraisers Association Grace Muzyka, Appraisal Institute of Canada Observers: John Billington, Sask. Government Relations Colleen Mackenzie, Sask. Industry and Resources Don Barr, City of Regina Gord Lawson, City of Saskatoon SAMA Administration: Stuart McDonald, Committee Secretary Irwin Blank Brad Korbo Gord Senz Gerry Hupp (AM only) ABSENT: Craig Melvin, Committee Chair, SAMA Board Chair Sharon Armstrong, Urban Sector Board member John Wagner, Rural Sector Board Member Ted Mitchell, Saskatoon Regional Economic Development Authority Kevin Olmstead, Sask. Chamber of Commerce Brian Jamieson, Building Owners and Managers Association Ken McKinlay, Sask. Home Builders Association Tom Mullin, Hotels Association of Sask. Glen Bosecke, National Golf Course Owners Association, Saskatchewan Chapter Dale Cumming, Inland Terminal Assoc. of Canada 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: Bruce Wilson, Sask. Industry and Resources Joe Day, City of Prince Albert David Pierce, City of Moose Jaw Cameron Duncan, City of North Battleford Mike Kehler, City of Swift Current SAMA Administration: Murray Cooney, CEO Agenda Item: Call to Order Acting Committee Chair F. Clipsham called the meeting to order at 10:05 a.m. 1. Approval of the Agenda Moved by J. Hopkins that the agenda be approved. SAMA Commercial Advisory Committee 1
2. Minutes Moved by J. Hopkins that the minutes of the Commercial Advisory Committee s meeting for October 26, 2004 be adopted. 3. Technical Development Committee Position Papers B. Korbo reviewed the TDC s three position papers on policies and legislative requirements for the implementation of market value in 2009: 3.1 Determination of Value. 3.2 Improvements to the Appeal Process. 3.3 Requirements for Property Owners to Provide Information to the Assessor. General discussion: It is important that the necessary legislation is introduced in the next sitting of the Legislature. Agreed to receive the presentation on Agenda Item 4 Income Approach prior to discussing the TDC position papers. 4. Income Approach General discussion: Individual properties won t be valued based on actual rents. Market rents will be used. Owner occupied properties will be valued based on typical market rents for similar properties. Consideration needs to be given to shortening the lag between the base date and the revaluation year after the 2009 revaluation. 4.1 Income Project Research Project G. Hupp provided an update on income approach research, data collection results for the pilot projects, supporting computer development, and current recommendations. General discussion: A National Market Commercial Pilot Project has been established. Pilot projects are testing: (1) the size of community in which the income approach will work, (2) communities with a high number of owner occupied properties, and (3) response rates/availability of data. Since 2003, have met with the Hotels Association of Saskatchewan a number of times, attended their conference, and mailed directly to hotel owners under the association s letterhead but general level of response continues to be poor. In Alberta property owners loose their right of appeal if don t provide information to the assessor. Response rate in rural Alberta is 80%. Western Grain Elevator Association Tax Committee: Suggested that may be able to improve response rates by involving the local appraisers, instead of just using researchers in central office. SAMA Commercial Advisory Committee 2
4.1 Income Project Research Project Continued Regina & District Chamber of Commerce: Cautioned that if continued to have low response rates, then may end up with the problems that the City of Winnipeg had when it moved to market value. May need to consider a minimum response rate before proceeding. City of Regina: Need province-wide legislation to move to market value. The move to market value should not be done on a communityby-community basis. 4.2 City of Saskatoon Report on Income Approach Pilot Project Gord Lawson, City Assessor reviewed the status of the city s pilot project, data collection results, and current conclusions. The response rate was better from smaller property owners than from larger property owners. Some larger owners refused to provide information to the assessor. Should get rent rolls annually at the same time of the year to determine vacancy rates. Then check vacancy rate calculations against what the industry is reporting. Saskatoon Broadway Business Improvement District: Reported that the city s letter was well written and well received by commercial property owners. General discussion on risk: Should be able to get reasonable values for retail with a 62.5% response rate. With lower response rates the risk increases for higher appeal losses, less certain school board and library funding, and inaccurate taxes for individual property owners. Recessed for lunch. Moved by R. Lawrence that the Income Pilot Project Research Report and the City of Saskatoon Report on Income Approach Pilot Project be received. 3.2 Improvements to the Appeal Process Moved by J. Hopkins that the Commercial Advisory Committee endorse the Technical Development Committee s recommendation that the following improvements to the appeal process be implemented as soon as is possible: i. Modify existing legislation (Section 195 of The Cities Act and similar provisions in other legislation) so that it will permit an agreement between the parties without the agreement being confirmed by the Board of Revision. ii. Add staggered appeal filing dates. The appellant shall submit 20 days prior, the respondent 10 days prior and the appellant shall have 5 days to prepare a rebuttal. iii. Modify existing legislation to tighten up the requirements for the SAMA Commercial Advisory Committee 3
3.2 Improvements to the Appeal Process Continued notice of appeal to ensure that it is clear there is one 14-day period for the appellant to perfect their notice of appeal. ; with the added provision that the period of time for the Board of Revision to notify the appellant of the hearing date be extended from the current 21 days. Canadian Property Tax Association: Should consider getting assessments out to property owners 1 year prior to putting them on the assessment roll. Taxpayers and assessors should be able to sit down prior to the appeal process to resolve issues. No issue with staggering the appeal dates. Should only report 100% of value on the assessment notices. Concerned with the number of appeal levels and the multiplicity of appeal notices. o Need clear guidelines on what should go straight to the Saskatchewan Municipal Board (ie. a fixed dollar value). o When there is agreement between SAMA and the appraiser then the appeal shouldn t have to go to the Board of Revision but should go straight to the SMB. Saskatchewan Association of the Appraisal Institute of Canada: Concerned that only need to give 21 days notice for the Board of Revision and that the TDC is recommending that the appellant must file 20 days prior to the Board of Revision. The Ontario process (90 days and 1 level of appeal) seems to be much more efficient. Saskatchewan Real Estate Association: Should extend the ability to amend the notice of appeal to 30 days. Regina & District Chamber of Commerce: Appeals have been taking too long to decide. It has been hurting property owners as much as anyone else. Pleased to see that some concrete action is being taken on appeals. Moved by J. Hopkins that the Commercial Advisory Committee recommends that an appeal process consultation group which includes members of the business community, be established with a mandate to recommend improvements to the appeal process to the Minister. Moved by K. Love that the Province be asked to consider amending legislation for the management of major appeals to allow the appellant the choice of filing either with the local Board of Revision or directly with the Saskatchewan Municipal Board. SAMA Commercial Advisory Committee 4
3.3 Requirements for Property Owners to Provide Information to the Assessor General Discussion: In Alberta, loose the right of appeal if do not provide information to the assessor. In Ontario, property owner is subject to fines if does not provide information to the assessor. Issue arises when a high-end property owner withholds information because it lowers the average and therefore lowers their assessment. Local Board of Revision often won t take a stance on the issue and continue to allow appeals where information has not been provided to the assessor, and the Saskatchewan Municipal Board has taken a very broad interpretation. Government Relations is looking for very clear intent from the Commercial Advisory Committee. Assessors need the data to make the new system work. If don t have strong legislative tools, then will have trouble getting the new system to work. Canadian Property Tax Association: Concerned with how the process would operate and how the property owner could challenge an unreasonable request. Concerned that the Alberta process is being abused because assessors are asking for information that takes too much effort to provide. The Board of Revision is the place to sort out whether the information requested was reasonable and relevant. Current legislation is sufficient. The may wording in current legislation should not be changed to shall. The change from may to shall imposes a different level of compliance. May allows the Board of Revision to evaluate and decide whether circumstances are such that the property owner couldn t comply. Concerned that the focus of the amendment is wrong. The focus is that relevant information will escape the assessor because the Board of Revision will not make a decision. Saskatoon Broadway Business Improvement District: Property owners will be reluctant to provide confidential information. Education of property owners will be required and confidentiality must be assured before the assessor will get confidential information willingly from property owners. Regina & District Chamber of Commerce: Understands that the more information the assessor has the better it will be. Western Grain Elevator Association Tax Committee: Cautioned that fines may drag out the appeal process further. Supports the proposal to dismiss appeals where information is not provided because assessors need the information and the process won t work without getting the information. SAMA Commercial Advisory Committee 5
3.4 Requirements for Property Owners to Provide Information to the Assessor Continued Saskatchewan Real Estate Association: Assessors want to provide accurate values and should have the right to information to do the job. Property owners have the right to accurate assessment values and should have the responsibility to provide information to the assessor. Saskatchewan Association of the Appraisal Institute of Canada: Supports the continued use of may legislation. Board of Revision legislation currently has lots of may clauses. Moved by R. Hinz that legislation be amended to require the Board of Revision and Saskatchewan Municipal Board to dismiss an appeal if the Board of Revision or Saskatchewan Municipal Board determines that the appellant has refused to provide information requested by the assessor, and determines that the assessor has made a reasonable request for relevant information. Moved by J. Hopkins that legislation be amended, effective in 2006, to require information, required for the income approach, to be provided to the assessor by June 30 th each year. 5. Post 2009 Revaluation Cycle I. Blank reviewed the Proposed Response Regarding the Government Relations Discussion Paper: Revaluation Cycle. General discussion on appraiser labour supply and average cost to assess a parcel: It is difficult to get senior appraisal experience from outside of the province. SAMA s student training programs have been effective. Currently $40-45/parcel in larger city jurisdictions on market value. Manitoba $21/parcel. City of Winnipeg over $60/parcel. City of Calgary $48/parcel. SAMA $15/parcel. Regina & District Chamber of Commerce: Supports a 2-year revaluation cycle. Supports the proposed response and the combined recommendation for a shorter revaluation cycle and more current base date. Canadian Federation of Independent Business: On record as supporting a 3-year revaluation cycle. Saskatchewan Real Estate Association: The business community is concerned with shifts and a shorter revaluation cycle would help to mitigate the size of shifts. SAMA Commercial Advisory Committee 6
5. Post 2009 Revaluation Cycle Continued J. Hopkins moved that the Commercial Advisory Committee endorse the proposed response to Government Relations on the revaluation cycle. The proposed response is as follows: A reduction in the current four year revaluation cycle to a three year cycle, starting in 2009, subject to a review of the proposal by SAMA Advisory Committees and prior attainment of the essential conditions necessary to successfully implement a market value assessment system including: o appropriate financial and staff resources in all jurisdictions; o streamlined appeal processes; and o legislative changes, including improved provision of information statutes. Modify the base date for the proposed revaluation to the extent allowed within SAMA s current legislative authority, to ensure it is within 24 months of the revaluation implementation date. Recommend that the provincial government change the preliminary value deadline as set out in regulation from January 1 st of the year prior to the revaluation implementation date to April 1 st of the year prior to the revaluation implementation date. Ask government to provide the SAMA Board with the necessary legislative authority to consider and implement further reductions in the revaluation cycle and a more current assessment base date starting in 2012, pending the successful implementation of the three-year revaluation cycle. Instruct administration to review current operational assessment business practices and develop reengineering proposals in preparation for effectively implementing a market value assessment system in 2009 and a shorter revaluation cycle after 2009. Instruct administration to communicate this response to Government Relations (GR) in reply to their discussion paper on proposed changes to the assessment revaluation cycle. 6. 2002 Manual Revisions B. Korbo reviewed the propose revisions to the 2002 Base Year Saskatchewan Assessment Manual. General discussion: A correction was noted with respect to Document 4.1.2, Page 1 that the words do not need to be changed to do. Moved by R. Hinz that the Commercial Advisory Committee accepts the recommended 2002 Manual Revisions, with the correction to Document 4.1.2, Page 1 as noted. SAMA Commercial Advisory Committee 7
7. Assessment Roll Confirmation Review: A Report on Confirmation and Audit Policies and Practices by the SAMA Board of Directors R. Douglas reviewed the report and the Board s conclusions. Moved by R. Lawrence that the report be received. 8.1 SAMA Annual Meeting Committee members were invited to register to attend the SAMA Annual Meeting on April 14 th. 8.2 Proposed change to meeting start time S. McDonald advised that Committee members flying in from Alberta have noted that they cannot get a flight that arrives in time for a 10:00 a.m. start time. If flight times continue to be a problem, S. McDonald will survey Committee members as to whether a later start time would be acceptable to them. Adjournment Acting Committee Chair Fred Clipsham adjourned the meeting at 3:40 p.m. Original signed by Stuart McDonald Stuart McDonald Committee Secretary SAMA Commercial Advisory Committee 8