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Home My WebLink AboutCS 31-08 REPORT TO EXECUTIVE COMMITTEE I . 'I 1 f'< !;() Report Number: CS 31-08 Date: June 9, 2008 From: Gillis A. Paterson Director, Corporate SeNices & Treasurer Subject: 2008 Assessment Appeals Recommendations: 1. That Report CS 31-08 of the Director, Corporate SeNices & Treasurer regarding 2008 assessment appeals update be received; 2. That Council approve the filing of the assessment appeals by Municipal Tax Equity for 2008 for the following roll numbers: 18-01-020-016-146-00, 18-01-030-020- 189-35, 18-01-030-020-189-90 and 18-01-030-020-202-00; 3. That the attached By-law providing for the confirmation of the filing of assessment appeals be enacted; 4. That Council authorize the Director, Corporate SeNices & Treasurer to engage the firm of Municipal Tax Equity and or Walker Poole Nixon LLP to represent the City for the assessment appeals filed above; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. Executive Summary: The City has filed the assessment appeals for the properties outlined above due to the fact their current value assessment (used for 2008 taxation billing) bears little resemblance to the their sales price transaction value. Taxation staff's goal is to have the property's assessment value revised and corrected so that these properties do not benefit from the re-assessment phase-in proposed for 2009. Financial Implications: The City has benefited financially from previous assessment appeals (OPG). If the City is successful with these appeals, the increased property taxation could be as high as $35,000 per year or $140,000 over a four year period. Report CS 31-08 Date: June 9, 2008 Subject: 2008 Assessment Appeals Page 2 ;: n Sustainability Implications: Approving the report will assist the City in maintaining its short term and long term financial sustainability objectives. Background: The City's property tax base funds approximately 64% of its operating costs. In other words for every dollar in expenditures, sixty-four cents comes from property tax payers. Taxation staff review's the assessment data base on an annual basis to ensure that the City receives maximum economic benefit from this major revenue source. As a result of this review in conjunction with the City's consultant (Municipal Tax Equity or MTE), the City has appealed the four properties listed on Table One. Our consultant has recommended that Council confirmation, in the form of a by- law, approval is required for assessment appeals. Table One 2008 Assessment Appeals Roll/Numberl Tax Sale Location Class Owner Amount OVA Difference 020 016 146 00 Vacant Land Pickering 1856 Notion Rd Ind. Ridge Annex $4,800,000 $1,568,000 $3,232,000 030020 202 00 Altona Terraces 1870..Altona Rd. Res. Develop Corp. $1,600,000 $519,000 $1,081,000 030 020 189 35 Grossi Group 361 Chickadee Res Develop Inc. $720,000 $158,000 $562,000 030 020 189 90 Multi Grossi Groqp . Sparrow Cir. Res DevedQpJnc. $870,000 $216,000 $654,000 As the above table indicates, there appears to be a significant difference between the sales price and current assessment value used for taxation purposes. In addition, the assessment appeal is also questioning the tax class of the properties. If the City is successful, the City would receive approximately $35,000 per year in additional property tax revenues. Assessment Appeals and City's Current Assessment Growth As Members of Council are aware, since 1999, the City has been in a limited assessment growth scenario. Unfortunately, it appears that this limited growth scenario may continue until 2011 or 2012. As the chart below indicates the City's assessment growth scenario compares unfavorably with its closest Durham Region neighbour. Report CS 31-08 Date: June 9,2008 Subject: 2008 Assessment Appeals Page 3 .-~ ,1 (1 Assessment Growth (2003 to 2007) 6.00% 5.00 % 4.00% 3.00 % 2.00% 1.00% 0.00 % 2003 2004 2005 2006 2007 III Pickering . Ajax I Assessment property tax base growth has the same characteristics as compound interest over time. Over the last five years Pickering's assessment property tax base has increased due to growth by 4.9% in contrast to Ajax which has increased its property tax base by 30.5% - a difference of 25.6%. To put another way Ajax has increased its total tax revenue base by approximately 1/3 through assessment growth and not through property tax increases. With the City in its current and anticipated future limited growth scenario, it appears that increasing the assessment property tax base via assessment appeals is a viable prudent fiscal strategy. Principle of Fairness to All City Taxpayers The property tax system is based on the principle of every property owner paying their fair share of taxes based on the assessed value of their property. Property owners may disagree with the assessed value of their property but at least they understand that the system is fair because everyone basically pays property taxes based on a fair assessment property value. Where a property is under assessed and therefore pays less in taxes - the other property owners have to pay more to offset the revenue shortfall. The principle of fairness does not exist under this scenario. Property tax owners expect the City to ensure that the principle of fairness is maintained and that all taxpayers pay their fair share. Report CS 31-08 Date: June 9, 2008 Subject: 2008 Assessment Appeals Page 4 " '1 ! ii ! Conclusion Regardless of the fact that the City is in a "limited growth scenario," pursuing the property appeals is an important function of the management of the assessment property tax base and maintains the principle of property tax fairness. The limited growth scenario the City finds its self today just emphasizes the importance of obtaining the additional property tax revenue. Attachments: 1 . Property Locations 2. By-law to Authorize Specific Complaints to the Assessment Review Board Prepared By: Approved I Endorsed By: ..~ .c---------~ ./. ~.- , Stan Karwowski Manager, Finance & Taxation <?<:;~~_/ Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City COli A TT ACrlliH..; '1 Il ? , .t ... 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't ,,- \ 180 1 0300Z020283 1&010.3:002020290 \ '\ 180103{)()2{120291 \\ 18610J()o;;2'3~93 /\ \ "18()'i'030<;Z{l2()3(l() '~l \ ..--r'--\ 18010100Z1074,~9 \ 9. lS0J~:~.:::;Z03~1 ___\18010100210749-5 ~0101'J{l21?7491 \ \ 1 o....1...'nO~020~O...- , \ \ . 1Ml'.O. 10()~.1<J7493 r /)" . _ ',,;I... c "'~~~~ '- , v. \, 1801010H21074';:14_ / ",' i"f ..".:c- Ct>~":{ri,~,ht rtt.18::J1010~:21':l7~'~918{l1{l1~021(l~4s:t{l \ /y -...~-<"" 1~1{)100.<.- l{ll.k 7 }'..-_...,..~"".,:"="",~,,,,-,--~- '14<1 18-01-030-020-18935 361 Chickadee Crt. -\ 180103002018967 ~ 'i '1;, 'l> ~ ~ ~ N 180103002019100 Copyright retained by MF'AC ar',d its supplier;, _""""i"''''.'''''~~~_,,,,_ 1 4 5 18-01-030-020-18990 Sparrow Circle \ \ \ \ \ ~ \ \ \ \ '180"103002018819- 18010J002018810, 180103002018815,~ 180103002018808" \ \ 180103002018814 18010J00201880~~ -" C\, ~- Sp....... e.,\o\<oOOO etl 18010~ ~ \ 18010J002018~46 18010J002~18~5~ j \ '\ \ \ 1~010JOO~018~45 \ 1801 030020 18~48 180103002018~52 ~ l!< 18010J00201~801 '\ t. 18010J002020000 \ 18010J002018~~5 Copyrig ht ~18010J002020150 a rod ,g su ppl;e':\.__--18010300201~000 \ 18010J00201~100 'f' J\CHMENT #.;.;;:;... TO r . \' '-..- .., l, ',- F . '" .1 ~ .- l~ b THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. XX/08 Being a By-law to Authorize Specific Complaints to the Assessment Review Board. WHEREAS the Council of the Corporation of the City of Pickering (the "City"), may complain in writing to the Assessment Review Board that it or another person was, in respect of real property, assessed too high or too low, was wrongly placed on or omitted from the assessment roll and/or was wrongly on or omitted from the role in respect of school support pursuant to s.40 and s. 40.1 of the Assessment Act, R.S.O. 1990 c. A.31, as amended (hereinafter referred to as the "Acf'); WHEREAS the Council of the City of Pickering deems it appropriate to enact this by- law for the purposes of exercising its privileges under the Act, NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. In this By-law, "property" means any property or portion of property that is or should be identified on the assessment roll prepared in respect of the municipality; and "delegate(s)" means any person or persons upon whom this By-Law confers duties associated with complaints filed with the Assessment Review Board (ARB) under sections 40 or 40.1 of the Act. 2. The City hereby authorizes and ratifies the filing of complaints to the Assessment Review Board in respect of the assessment of the following persons and properties: Roll No. 1801 020 016 146 00 Roll No. 1801 030 020 202 00 Roll No. 1801 030020 18935 Roll No. 1801 030020 18990 3. In respect of the administration of any complaints authorized in paragraph 2 of this By-law, the Director, Corporate Services & Treasurer or designate hereby authorized to sign on behalf of the City, and to participate in any associated legal proceedings with respect thereto. Il '7 ! 4. Municipal Tax Equity Consultants Inc. shall be appointed on record as agent for the City. 5. This By-law shall come into effect on the date it is finally passed and shall serve to ratify all administrative tasks and responsibilities undertaken prior or subsequent to that date in respect of any appeal authorized through this By-law. By-LAW read a first, second and third time and finally passed this 16th day of June, 2008. David Ryan, Mayor Debi Wilcox, City Clerk