The observations from the August 22nd Council session, making for the latest in commentary from civic officials when it comes to the how the City views the PRPA's responsibilities to the municipality, as the Council members take on the challenges of municipal government.
As we outlined in our reviews of the August 22nd session, the first note of observation on the PRPA came during a review of a report from Richard Pucci, the Director of Operations and Intergovernmental Affairs, which outlined the current status of the City's response to a range of environmental concerns from the Federal Government.
With Mr. Pucci providing a review of the City's plans for wastewater treatment, a program which led to a question from Councillor Barry Cunningham as to whether the Port was helping the City on the initiative.
"Just for my curiosity, the biggest industrial use of our system in this town is the Port, are they helping us in any way with this?" -- Councillor Barry Cunningham at the August 22 council session
Mr. Pucci noting that at the moment, the Wastewater work was solely a City of Prince Rupert initiative.
Last week we noted how the larger focus for some Council members however came following a presentation from Chief Financial Officer Corrine Bomben, as part of her review of recent Payment in lieu of Taxes money to the District of Port Edward.
This years transfer listed as lower than years previous.
The presentation from the CFO led to a pair of observations on the topic of the Port assessments and how they were lower than previous years, which as a result delivered less returns to the City.
Councillor Mirau at the August 22nd session called attention to a chart included in the presentation that listed off a number of Port properties that had declined in assessment.
My question relates to Appendix A of your report where you basically listed the assessments of properties that are impacted by the Tax Sharing agreement and it shows a pretty dramatic decrease in the Port Authority's payment in lieu of taxes from 2.6 million to just over 500,000.
Now for their PILT payment to be reduced by over 2 million in just a single year, obviously means that their property assessments must have collapsed. So I'm wondering are you in a position tonight to tell us what these impacted properties were assessed at last year versus this year for such a dramatic decrease" -- Councillor Blair Mirau on August 22
Mayor Lee Brain also had some thoughts towards the assessment process and the differences between this years housing assessment and that of the industrial sector with the Port.
"Just a follow up question ... So, home prices went up on average what 30 percent in Prince Rupert this year ... and the Port's properties were down 82 percent compared to all the house prices that went up ... resulting in a two million dollar less payment that they have to make basically ... Just making sure that we have the facts straight ... It will be interesting to see that information for the next Council session for sure" -- Prince Rupert Mayor Lee Brain on August 22
Ms. Bomben did note for the council members that the City is currently appealing that BC Assessment Board decision.
When it comes to the assessments of concern for the City related to the Port, the North Coast Review contacted the PRPA by email to make some inquiries about the PILT process and how it is tied into the assessment process.
In response, Monika Côte, PRPA's Director of Public Affairs and Communication provided some background to that process and how it evolved in the recent assessment of vacant Port land.
Once a property is leased to a tenant, for example, a terminal, it is not subject to PILTs and pays property tax directly.
Following several years of very large increases in assessed values for PRPA’s vacant land as determined by BC Assessment, PRPA appealed the assessment of these properties.
BC Assessment agreed that the assessment methodology and the values of those properties were incorrect, which resulted in the Property Assessment Appeal Board issuing orders that reduced the assessed values of the relevant properties."
The Mayor and Council members can pick up on their theme of how the PILT process is not working for them as they would seemingly like it to at the upcoming UBCM.
That gathering of provincial and municipal officials takes place in Whistler from September 12-16, offering the Prince Rupert delegation a chance to access the appropriate BC NDP Cabinet Ministers to make their case for reform of the process.
The concerns over how the province handles PILT however won't be one introduced as a resolution, with the City only having one resolution up for debate at the convention this year, that on housing concerns.
The topic of the revenue challenges provided by the Provincial Government's legislation made for a significant focus during the June State of the City presentation, the Mayor's talking points for the night eliciting a bit of a rebuttal from Port officials in July.
That PRPA reply, brought Councillor Mirau into the discussion, with his own contribution to the local paper's editorial page and his own Social media stream, the Councillor's observations one's which found approval from a number of his fellow council members as well as Mayor Brain.
We may hear more of the City Council view of the situation as part of the September 19th public council session. That is when the Chief Financial Officer has been asked to provide a follow up report on the city's concerns for Council to review.
More notes on the financial themes of note for City Council can be explored further through our Budget Planning archive page.
The Port's PILT payment to the City is governed by the federal Payment in Lieu of Taxes Act. Provincial cabinet ministers are not in a position to "reform" that legislation. The Property Assessment Appeal Board of British Columbia is a quasi-judicial tribunal that is independent from BC Assessment. It also does not take orders from cabinet ministers or anyone else in the political realm. I don't see the Province amending the Assessment Act because the City of Prince Rupert is unhappy with the assessed values of some vacant Port properties.
ReplyDeleteThe Board's order was based on a joint recommendation by the Port and BC Assessment that changed some assessments. Presumably the City is appealing the Board's order to the courts, but as with so much involving the City council the details are murky at best. The City would have to make a technical argument that the Board's order was made an error and failed to comply with the BC Assessment Act. The City's frequent lament about things being "unfair" would not cut it at all.
Looking at the assessments in question, the biggest change by far was a reduction in the value of a Port property within the District of Port Edward (roll #25-52-564-00730.000) from $14,565,000 to $2,300,000.
As for recent exchanges of letters to the editor and the mayor's State of the City address (queue some inspirational music), those narratives relate to the provincial Port Property Tax Act, which places caps on assessments of leased Port properties and provides for a Port Competitiveness Tax Grant from the Province (about $1.8 million). The PILT from the Port is a separate matter and last year it actually went up by about $128,000 to $1.6 million, according to the City's 2021 audited financial statement.
A problem is that separate issues - the PILT and taxes that are subject to the Port Tax Caps - tend to be muddled together, perhaps because both are calculated on the basis of BC Assessment's property valuations. They should be discussed as completely separate issues.
As for Barry's query about whether the Port is "helping us in any way", the City receives a PILT from the Port for vacant land, taxes from tenants for leased land, and a Provincial grant, which add up to significant contributions that are governed by various federal and provincial statutes. The idea that the Port is to lend a helping hand or act in a charitable manner really does not enter in to it.
Thanks for the tutorial on the differences between the two streams of financials, it does help to better understand the issues at the heart of the discussion on Port related themes. Always nice to gain a wider appreciation for the complicated topics ... NCR
DeleteExcellent commentary, on the PPTA and PILT.
DeleteThis resident has grown tired of the almost decade long rhetoric from a small cadre at City Hall towards the PPTA and PILT.
Instead of always asking DP for more,
City Hall should have moved faster on adding to the tax base they can control.
Watson Island, when will it be fully leased?
Gateway, when will that be moving forward?
How many new business start ups has our city had in the last eight years?
What is the mix of new business start ups?
How many NGO's have started up in our city in the last eight years? (lowest tax rate)
What is the city's economic focus moving forward, what are we trying to attract?
Our community is not stuck or unfree by the PPTA or the PILT.
It is a small group at City Hall that is stuck and unfree from their crusade on this issue.
**Insert Mic Drop emoji here**
The city's dominant narrative about port related taxation, which is basically that the city is being ripped off, comes across as very negative towards business. I hope that out of the election comes a more business-friendly, or at least not unfriendly, city council than what we've seen for several years.
Delete