Assessment Appeals Committee
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Assessment Appeals Committee DETERMINATION OF APPEALS UNDER Section 16 of The Municipal Board Act and Section 216 of The Cities Act Appeal Numbers: AAC 2016-0026 to 2016-0029, inclusive AAC 2016-0030 to 2016-0033, inclusive (cross appeals) Date and Location: February 15, 2017 – Saskatoon, SK City of Saskatoon Appellants for AAC 2016-0026 to 2016-0029 and Respondents for AAC 2016-0030 to 2016-0033 - and - Various c/o Altus Group Limited Respondents for AAC 2016-0026 to 2016-0029 and Appellants for AAC 2016-0030 to 2016-0033 APPEARED FOR: City of Saskatoon: Travis Horne, Assessment Manager Kevin Tooley, Senior Assessment Appraiser Altus Group Limited: Garry Coleman, Director HEARD BEFORE: John Eberl, Panel Chair Gord Androsoff, Member Malcolm Eaton, Member APPEALS AAC 2016-0026 et al and AAC 2016-0030 et al Page 2 INTRODUCTION: [1] The 2016 assessments for the properties listed below, as set by the Board of Revision (Board) for the City of Saskatoon (City), are under appeal: AAC Cross- Board Assessment Original Board's AAC Appeal Appeal Appeal Civic Address Roll Assessed Assessed Number Number Number Number Value Value 2325 Preston 2016-0026 2016-0030 25-2016 535402500 $27,984,300 $26,751,600 Avenue S 300 2016-0027 2016-0031 26-2016 Confederation 494505990 $31,015,100 $28,450,900 Drive 134 Primrose 2016-0028 2016-0032 58-2016 445225000 $58,877,800 $56,362,300 Drive 2016-0029 2016-0033 59-2016 3310-8th Street E 525515890 $88,055,500 $84,272,900 [2] The properties are non-regulated and classified Commercial and Industrial; they represent four of the five enclosed malls in the City. The Assessor used the income approach to value the properties. [3] Altus Group Limited (Altus) appealed the assessed values to the Board, alleging the Capitalization (Cap) Rate of 7.17% applied to determine the assessments was too low and did not achieve equity with the assessments of similar properties. The Board allowed the appeals and ordered the assessed values calculated with a 7.49% Cap Rate. [4] The City appeals to the Committee stating the Board mistakenly changed the Cap Rate and asks us to uphold the original assessed values. [5] Altus filed cross-appeals and requests the Committee find mistakes in some of the Board’s findings set out in the analysis provided in its decisions. ISSUE: [6] Did the Board make a mistake by changing the Cap Rate and lowering the assessed value of the subject properties? DECISION: [7] The Committee finds the Board made no mistake by changing the Cap Rate and lowering the subject properties’ assessments. APPEALS AAC 2016-0026 et al and AAC 2016-0030 et al Page 3 PROCEDURAL MATTERS: Lead Appeal [8] The parties agreed the property at 2325 Preston Avenue S (Board Appeal 25-2016, AAC appeals 2016-0026 and 2016-0030) would be the lead appeal and cross appeal. The Panel Chair advised we would issue one decision for all appeals. Confidentiality Order [9] Both parties requested certain documents declared as confidential. The following documents forming part of the Board record are declared confidential: • Exhibit CA.1 for each appeal; • Exhibit R.1, Addendum E, pages 17-63 for AAC 2016-0028 and 0032; • Exhibit R.1, Addendum E, pages 17-93 for AAC 2016-0029 and 0033; and • Exhibit R.1, Addendum F, pages 94-96 for AAC 2016-0029 and 0033. Board Record [10] The Board record had the 2016 assessment notice for the lead property shown as attached to the City’s notices of appeal to the Committee for all four properties. The Panel Chair explained Saskatchewan Municipal Board (SMB) staff obtained the correct 2016 assessment notice for each of the other three properties under appeal and that information would be considered. The parties had no objection. PRELIMINARY MATTERS: Altus’s Cross Appeals AAC 2016-0030 to 2016-0033 [11] During discussion of preliminary matters, the Panel Chair asked Altus if the Grounds of Appeal to the Committee led to any change in assessed value beyond that ordered by the Board. At this time, the City raised objection, stating section 226 of The Cities Act, SS 2002, c C-11.1 [the Act] precluded the Committee from making any decision that would not affect the subject properties’ assessments. [12] Altus’s Grounds of Appeal to the Committee for all the properties stated the Board “… erred in its decision …” in the following ways (directly quoted): 1. In its finding that the assessor could “collapse” two distinctly different neighbourhoods into one and consider them comparable strictly because there were insufficient sales in one of the original neighbourhoods. APPEALS AAC 2016-0026 et al and AAC 2016-0030 et al Page 4 2. In its finding that a single sale must “still be placed in some group somewhere” in determining cap rates in order to meet the market valuation standard. 3. In finding that a single sale could not be used for statistical analysis without it being used to develop a cap rate. [13] Altus confirmed the grounds did not relate to a mistake of the Board that leads to a change in assessed value; however, Altus did not want the points of argument excluded as irrelevant, so they launched the cross appeals with the points listed as grounds. [14] The City stated the decision for AAC 2012-0067, City of Saskatoon v Frederick Boychuk et al [Boychuk], considered similar circumstances and provided analysis as to the intent of section 226 of the Act. Although the Committee had awarded costs in Boychuk, the City stated they believed the only penalty in addition to not hearing the cross appeals should be a default of the fees Altus paid with respect to the cross appeals. Further, the City expressed no objection to Altus articulating the argument set out in the grounds of the cross appeals in their role as respondent to the City’s appeals (AAC 2016-0026 to 0029). [15] The City did not set out its intention to object to the Committee hearing the cross appeals in its submissions to us. Further, the City did not provide a copy of Boychuk for us to consider despite their reference to it. Preliminary Conclusion at the Hearing [16] We recessed to consider the matter. We informed the parties we determined the cross appeals would not be heard with reasons to be provided in this decision. However, Altus would be allowed to raise the points of argument made in the cross appeal grounds, as it was clear the grounds referred to issues within the Board’s decisions for the appeals. [17] We informed the parties our final decision with reasons would be made following examination of the legislation, the Boychuk decision and our fee refund policies. The circumstances surrounding the City’s objection, and Altus verifying there was no change in assessed value requested, resulted in a lack of time for us to provide full reasons for our preliminary conclusion at the hearing. APPEALS AAC 2016-0026 et al and AAC 2016-0030 et al Page 5 REASONS AND ANALYSIS Legislation, Case Law and Fee Refund Policy [18] Section 226(1) of the Act states: After hearing an appeal, the appeal board may: (a) confirm the decision of the board of revision; (b) modify the decision of the board of revision to ensure that: (i) errors in and omissions from the assessment roll are corrected; and (ii) an accurate, fair and equitable assessment for the property is placed on the assessment roll; or (c) set aside the assessment and remit the matter to the assessor to ensure that: (i) errors in and omissions from the assessment roll are corrected; and (ii) an accurate, fair and equitable assessment for the property is placed on the assessment roll. [19] In Boychuk, the Committee wrote at paragraph 19): … The … section [226 of the Act] sets out the powers of the Committee after hearing an appeal, and states for what purpose the Committee may exercise its powers. Accordingly, the Committee should be acting for the purpose of correcting “errors in and omissions from the assessment roll” so that “an accurate, fair and equitable assessment for the property may be placed on the assessment roll.” No such qualifiers are attached to subsection 1(a), which allows the Committee to “confirm the decision of the board of revision”, but this subsection cannot be read in isolation from the others. When read in context it is apparent that this is the power to dismiss an appeal when no error or omission in the assessment roll has been demonstrated. [20] The applicable SMB policy in effect at the time of this hearing is Rule 7.02(d) SPECIAL CIRCUMSTANCE REFUNDS, which states: Where the [Committee] identifies a special circumstance, which may warrant an appeal fee refund, the [panel] shall refer the matter to the [SMB] for a decision. Cross Appeal Hearings [21] Altus confirmed their cross appeal grounds would not lead to a different assessed value than ordered by the Board. Altus wished to argue some points made in the Board’s decision were not relevant or applicable to its conclusion. Altus believed it was necessary to register cross appeals in order to make such argument. APPEALS AAC 2016-0026 et al and AAC 2016-0030 et al Page 6 [22] When the Committee examines Board decisions in an appeal, we look at both the analysis provided, and the Board’s conclusions and orders. Sometimes, a Board’s analysis may be flawed but the conclusion may be correct. In such case, the Committee may not overturn the Board’s conclusion and orders, but rather make note of the mistakes in analysis.