saskatchewan municipal board assessment appeals committee

Saskatchewan Municipal Board Assessment Appeals Committee

Appeals: 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 RESPONDENT: City of Saskatoon In the matter of appeals to the Assessment Appeals Committee, Saskatchewan

Municipal Board, by:

Various (see Schedule A) c/o Jesse Faith Altus Group Limited

226C Cardinal Crescent Saskatoon, SK S7L 6H8

respecting the assessments of: See Schedule A for the year 2009; BEFORE: David Wilkin, Chairman

Jenny Lai Yu, Member Robert L. Edwards, Member Cynthia J. Schwindt, Secretary

APPEARED FOR THE APPELLANT: Jesse Faith APPEARED FOR THE RESPONDENT: Travis Horne Kirby Fesser Phyllis Girling These appeals were heard in the Large Conference Room, 3830 Thatcher Avenue, in Saskatoon, Saskatchewan, on November 25, 2010.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

These appeals are against the decisions of the Board of Revision (the Board) for the City of Saskatoon pursuant to section 216 of The Cities Act (the Act). ISSUE: Did the Board err in maintaining an assessed value that was determined based upon a gross income multiplier (GIM) developed from an improper stratification and which included a sale which was not comparable to the subject properties? FACTS: (1) These appeals are for a group of three and four storey multi-family, low-rise

apartment buildings located in neighbourhood 15003 on the west side of the City of Saskatoon.

(2) The properties under appeal and their respective assessed values resulting

from the Board’s decision are as follows:

Schedule A

Appeal Property Owner Civic Address Assessed Value

2009-0130 Mainstreet Equity Corp. 365 Pendygrasse Road $6,109,600

2009-0130 Mainstreet Equity Corp. 1101 Avenue W North $567,300

2009-0131 PR Developments Ltd. 10 Pearson Place $1,267,300

2009-0134 959630 Alberta Inc. 423 Pendygrasse Road $9,640,100

2009-0137 Fairmont Village Ltd. 202/238 Fairmont Drive $8,496,000

2009-0141 Borden Place Apartments Ltd. 865/895 Confederation Drive $3,548,000

The Saskatchewan Municipal Board, Assessment Appeals Committee (the

Committee) heard this series of appeals starting with the file for Appeal 2009-0137. Thereafter, the parties to the appeal agreed that all evidence and argument be carried forward to the remaining four appeals identified on Schedule A. The Committee concurred with this procedure.

The retroactive base date of municipal assessments for taxation purposes

in the Province of Saskatchewan is June 30, 2006. For multi-residential properties, the percentage of value equals 70% of the assessed value.

(3) The grounds and issues of appeal to the Board as identified at page 2 of its

decision were:

“1. The Assessment valuation is in excess and should be lower to reflect market value. a) The estimated potential gross income

calculated in error. b) The Gross Income Multiplier (GIM) of 6.06

applied to the subject is excessive and is not representative of the property.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

c) The 4 unit property in the sales array is not comparable to the subject and should be removed.

d) The sales from the current stratification defined as west-west central used to develop the GIM do not accurately represent the subject property.

e) The sales of multi-residential low rise properties located in the “west” stratification with greater than 45 units indicate a GIM significantly lower that [sic] currently applied.”

(4) The record of the Board for this appeal includes:

a) Exhibit A1 - Notice of appeal dated April 17, 2009, with Schedule A attached;

b) Exhibit A2 - Appellant’s submission, received by the Board on October 9, 2009 with Appendices A, B and C attached;

c) Exhibit A3 - Appellant’s confidentiality request letter dated October 9, 2009;

d Board confidentiality order dated November 4, 2009 for Exhibit A2, Appendix - Income and Expense;

e) Exhibit A4 - Addenda submission, received by the Board on October 9, 2009 with Appendices 1 through 10 inclusive attached;

f) Exhibit R1 - Assessment report, received by the Board on October 23, 2009 with Appendices A to G, pages 35 to 49 inclusive attached;

g) Minutes of the Board dated November 4, 2009; h) Board undertaking request to the assessor dated November 16, 2009; i) Assessor’s response to undertaking request dated December 4, 2009

with three photocopied pages from Marshall Valuation Service attached; and,

j) Decision of the Board dated December 15, 2009.

(5) As it relates to the issues for this appeal, the decision of the Board found the following:

“The Panel accepts that an alternate stratification is possible; however, it is not convinced that it is better, except for perhaps the subject. ... ... One of the sales used by the Assessor to develop the EGIM of 6.06 was a property located at 107 Gropper Cr. This property is in the subject’s neighbourhood (West 15003) and is classified by the Assessor as a low rise. In the grounds, the Appellant cites the lack of comparability between this property and the subject as reason to remove it from the sales array. After agreeing that the Valuation Guide, as amended,

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

classified a 4 unit property as multi residential, the Appellant was left with little to offer except that the property was stick frame construction which was typical of residential. This was properly countered by the Respondent who pointed out that it was also typical of new apartment construction up to four floors. ... The Panel believes that the property has been correctly classified by the Assessor and should remain in the sales array. ... The Panel is satisfied that the sales used by the Assessor are indeed representative of the subject and rightly belong in the sales array. ... As for the reference to a “greater than 45 unit” break point, the Appellant provided no evidence to support such a stratification. Again, the analysis of Issue d) may be repeated here.”

(6) The grounds of appeal to the Committee are: “1. In finding reason for its decision, the Board

failed to find, or list, the facts found to be relevant by the Board in its decision, as suggested by the Assessment Appeals Manual, as published by the Saskatchewan Ministry of Municipal Affairs.

2. The Board erred in finding the alternative

stratification was not “better”, “except for perhaps the subject.”

3. The Board erred when neglecting to identify that

the COD of the ASR of the sales located in the WC-North neighbourhood improved when left as their own neighbourhood stratification.

4. After finding the sale of the four unit property

to have the highest calculated EGIM and lowest ASR, the Board erred when not speaking to the issue of comparability of the sales used in terms of the estimate of market value when determining the market value standard applied to the subject.

5. The Board erred in determining that the 4 unit

sale located at 107 Gropper Crescent was a similar property and reflected typical market conditions for the subject.

6. The Board erred in not considering the Valuation

Guide for Apartments and Multi-Residential in

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

regards to comparability of the sales and the subject.

7. In light of the assessors testimony of the

definition of townhouses, the Board erred in finding that the sale property located at 708 Avenue R North was a low rise apartment and comparable to the subject.

8. The Board erred when not allowing an adequate

opportunity for the Appellant to respond to the undertaking “request response” of the City Assessor prior to writing its decision.

9. The Board erred in not recognizing the

significance of relationship between the lowrise sales located in the “WC-north” neighbourhood and the SIAST Kelsey Campus in terms of comparability for both location and ASR COD analysis.”

The notice of appeal to the Committee was dated January 13, 2010 and was received on January 14, 2010. The agent advised at the hearing that he would not be addressing the seventh ground.

(7) The Committee received a written presentation from the appellant which was marked as AAC Exhibit A1 and a written presentation from the respondent marked as AAC Exhibit R1.

LEGISLATION: The Cities Act:

“163 In this Part:

(f.1) “market valuation standard” means the standard achieved when the assessed value of property:

(i) is prepared using mass appraisal; (ii) is an estimate of the market value of the estate in fee simple in the property; (iii) reflects typical market conditions for similar properties; and (iv) meets quality assurance standards established by order of the agency;

(f.2) “market value” means the amount that a property should be expected to realize if the estate in fee simple in the property is sold in a competitive and open market by a willing seller to a willing buyer, each acting prudently and knowledgeably, and assuming that the amount is not affected by undue stimuli;

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

(f.3) “mass appraisal” means the process of preparing assessments for a group of properties as of the base date using standard appraisal methods, employing common data and allowing for statistical testing; (f.4) “non-regulated property assessment” means an assessment for property other than a regulated property assessment;

164(2) An assessment must be prepared for an improvement whether or not the improvement is complete or capable of being used for its intended purpose. 165(1) An assessment shall be prepared for each property in the city using only mass appraisal. (3) The dominant and controlling factor in the assessment of property is equity. (3.1) Each assessment must reflect the facts, conditions and circumstances affecting the property as at January 1 of each year as if those facts, conditions and circumstances existed on the applicable base date. (5) Equity in non-regulated property assessments is achieved by applying the market valuation standard so that the assessments bear a fair and just proportion to the market value of similar properties as of the applicable base date. 183(1) The assessor shall make the assessment roll available for public inspection during normal business hours from the day of completion of the assessment roll to the last day for lodging an appeal. (2) The council may authorize that the assessment roll or portions of the assessment roll be available for public inspection at any additional times that the council may determine. 197(6) A notice of appeal must be in writing in the form prescribed in regulations made by the minister and must:

(d) include a statement that:

(i) the appellant and the respondent have discussed the appeal, specifying the date and outcome of that discussion, including the details of any facts or issues agreed to by the parties; or (ii) if the appellant and the respondent have not discussed the appeal, a statement to that effect specifying why no discussion was held; and

(e) include the mailing address of the appellant. 200(4) At least 10 days before the date set for the appeal hearing, the assessor shall file with the secretary of the board of revision and serve a copy on all parties to the appeal:

(a) a complete assessment field sheet; and

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

(b) a written explanation of how the assessment was determined.

201(1) Before providing information to the assessor or any other party to an appeal, the party that is to provide the information may:

(a) declare the information confidential; and (b) seek an undertaking of the other party that:

(i) all or some of the information provided is provided solely for the purpose of preparing an assessment or for an appeal hearing; and

(ii) no other use may be made of the information.

(2) Failure to provide an undertaking pursuant to subsection (1) forfeits the right of the other party to obtain the information being sought by any other process. (3) No person who is required to comply with an undertaking given pursuant to this section shall fail to do so.

202(1) On the request of any party to an appeal, a board of revision, the appeal board or the Court of Appeal may make an order declaring all or any part of the information provided by that party to be confidential if the board of revision, the appeal board or the Court of Appeal determines that disclosure of that information on the hearing of the appeal could reasonably be expected to:

(a) result in financial loss or gain to the party or to any other person; (b) prejudice the competitive position of the party or of any other person; or (c) interfere with the contractual negotiations or other negotiations of the party or of any other person.

209(1) On application made by an appellant appearing before it, a board of revision may, by order, grant leave to the appellant to amend his or her notice of appeal so as to add a new ground on which it is alleged that error exists. 210(1) After hearing an appeal, a board of revision or, if the appeal is heard by a panel, the panel may, as the circumstances require and as the board or panel considers just and expedient: (a) confirm the assessment; or

(b) change the assessment and direct a revision of the assessment roll accordingly:

(i) subject to subsection (3), by increasing or decreasing the assessment of the subject property;

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

(ii) by changing the liability to taxation or the classification of the subject property; or (iii) by changing both the assessed value of the subject property and its liability to taxation or its classification.

(1.1) Notwithstanding subsection (1), a non-regulated property assessment shall not be varied on appeal using single property appraisal techniques. (3) Notwithstanding subsection (1), an assessment shall not be varied on appeal if equity has been achieved with similar properties. (4) A board of revision shall make all decisions on appeals within 180 days after the date on which the city publishes a notice pursuant to section 187, and no appeal may be heard after that date except where allowed pursuant to subsection 189(2) or 213(9) or section 360. 216 Subject to subsection 196(5), any party to an appeal before a board of revision has a right of appeal to the appeal board:

(a) respecting a decision of a board of revision; and (b) against the omission, neglect or refusal of a board of revision to hear or decide an appeal.

223(1) The appeal board shall not allow new evidence to be called on appeal unless it is satisfied that:

(a) through no fault of the person seeking to call the new evidence, the written materials and transcript mentioned in section 220 are incomplete, unclear or do not exist; (c) the person seeking to call the new evidence has established that relevant information has come to the person’s attention and that the information was not obtainable or discoverable by the person through the exercise of due diligence at the time of the board of revision hearing.

226(1) After hearing an appeal, the appeal board may:

(a) confirm the decision of the board of revision; or (b) modify the decision of the board of revision in order that:

(i) errors in and omissions from the assessment roll may be corrected; and (ii) an accurate, fair and equitable assessment for the property may be placed on the assessment roll.

(2) If the appeal board decides to modify the decision of the board of revision pursuant to subsection (1), the appeal board may adjust, either up or down, the assessment or change the classification of the property.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141 []

(3) Notwithstanding subsections (1) and (2), a non-regulated property assessment shall not be varied on appeal using single property appraisal techniques. (3.1) Notwithstanding subsections (1) and (2), an assessment shall not be varied on appeal if equity has been achieved with similar properties.”

MARKET VALUE ASSESSMENT IN SASKATCHEWAN HANDBOOK (THE HANDBOOK): Valuation Parameters: What are the variables or factors in a valuation process?, page 2:

“The market value of every type of property is guided by and relates to a number of variables:

1. The physical characteristics of the property:

□ Building size/areas; □ Construction style/materials; □ Condition of improvements; □ Building configuration; □ Site size, and; □ Location.

2. The supply and demand conditions in the market place. 3. Legal restrictions:

i.e. zoning

Every valuation process relies upon these types of inputs.”

Valuation Parameters: What are the valuation parameters in a valuation process?, page 3:

“The valuation parameters outlined in each valuation process are guides to indicate both the appropriate variables to consider in the analysis of values (i.e., the valuation formula) and the value or range of values that would be appropriate to use in the analysis. Valuation parameters are developed by considering many factors:

1. The costs of construction. 2. The income characteristics of the real estate:

□ Rents;

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

□ Other income, and; □ Operating expenses, etc.

3. The market place:

□ Risk profiles (i.e., capitalization rates), and; □ Market sales prices.”

MARSHALL VALUATION SERVICE (MARSHALL):

Dwellings, Multiples, Motels: Section 12, page 1 (Date: 8/2004)

Dwellings, Multiples, Motels: Section 12, page 5 (Date: 8/2004)

CASE LAW: 959630 Alberta Inc. v. Regina (City), [2000] 2010 SKCA 136 Cadillac Fairview Corp. v. Saskatoon (City), [2000] 11 W.W.R. 89, 199 Sask. R. 72 (C.A.).

PRELIMINARY ISSUES:

[1] At the commencement of the hearing for these appeals, the parties agreed

that both the assessor’s objection to issues raised within the appellant’s

submission to the Committee (AAC Exhibit A1) and the agent’s submission that

the Board erred in failing to provide him with an opportunity to respond to its

November 16, 2009 undertaking request of the assessor were fully argued in the

hearing of Appeal 2009-0128. The parties requested that all evidence and

argument be carried forward to these appeals. The Committee concurred with

this procedure.

Assessor’s Objection

[2] As identified at pages 6 and 7 of AAC Exhibit R1, the assessor identified a

number of paragraphs included within AAC Exhibit A1 which in his view, included

new evidence not considered by the Board. The assessor argued that pursuant to

section 223 of the Act it would be inappropriate for the Committee to now consider

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

this new evidence. The assessor further argued that the issues identified at

paragraph 30 of AAC Exhibit A1 had likewise not been placed before the Board.

For example, he noted that the classification of multi-residential properties and the

45 unit size stratification were not issues that the Board had before it and

accordingly, it would now be inappropriate for the Committee to consider these as it

would result in this hearing being a “trial de novo” which is not contemplated within

the legislative scheme in place.

[3] The agent argued that his submission to the Committee did not expand the

issues before the Board nor was any evidence included within this submission that

had not been included in his submissions to the Board. He argued that the

classification of the sales was clearly an issue before the Board as that formed the

basis for the following clarification request as found in the Board’s November 16,

2009 undertaking to the assessor:

“... guidelines used by the Assessor to determine the relevant classification of the sale properties.”

[4] The Committee advised the parties at the hearing that it would not restrict

the agent’s argument relating to issues and evidence forming the record for this

appeal. As an example, the Committee found that the appellant’s summarization of

the facts included in Appendix 9 of Exhibit A4 as identified at paragraph 53 of AAC

Exhibit A1 is appropriate. The Committee advised the parties that it did not accept

the assessor’s position that the information reflected in this chart is new evidence.

In the Committee’s view, this chart is solely the agent’s attempt to provide the

evidence scattered within the above appendices in a clearer and more concise

form.

[5] Additionally, the Committee found that the assessor’s objection to the

inclusion of the various quotes from the Handbook as found in paragraphs 17

through 25 inclusive of AAC Exhibit A1 is likewise not accepted. The Committee

advised the parties of its position that the Handbook, like legislation, case law and

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

the Saskatchewan Assessment Manual (the Manual) are always before the Board,

the Committee and the courts for consideration and guidance in determining an

appeal. Therefore, argument by either party referencing these materials in support

of a valid issue of appeal would not be restricted.

[6] Further, the Committee determined at the hearing for Appeal 2009-0128,

that it did not accept the assessor’s position that classification was not an issue that

had been placed before the Board. In summarizing the “Appellant’s Evidence &

Arguments” at page 4 of the Board’s decision, it recognized that “[t]he Appellant

thinks that the Assessor’s classification of low-rise multi-residential properties has

been inconsistent, particularly concerning townhouses and low-rises.” This in the

Committee’s view supports a finding that the agent made submissions on this issue

to the Board and it heard and understood the agent’s position. The Committee

ruled that it would allow the agent to argue whether the Board, correctly decided

this issue.

[7] The Committee recognizes the frustration as expressed by the assessor that

the notice of appeal to the Board did not precisely identify the specific issues that

were later addressed in the agent’s submissions to the Board. The Committee

notes that as a preliminary issue to the Board in Appeal 2009-0128, the assessor

had objected to the inclusion of tabs 10 through 14 of Exhibit A4 in the record on

the basis that the agent had not specifically raised issue with “size stratification” in

his notice of appeal to the Board. The Committee further recognizes that the Board

then determined the appeal based primarily on this issue.

[8] While the Committee heard the assessor’s objection to any consideration of

the greater than 45 unit size stratification, it determined that for the following

reasons it was not prepared to limit the agent’s submissions on this issue. Firstly,

the Board recognized the following at page 2 of its decision in the “Grounds and

Issues” section:

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

“e) The sales of multi-residential low rise properties located in the “west” stratification with greater than 45 units indicate a GIM significantly lower that [sic] currently applied.”

Secondly, the agent did not accept the Board’s position that no evidence was

provided in support of his proposed size stratification. He noted that all of the

information included on the summary chart at paragraph 53 of AAC Exhibit A1 had

been taken from the record which was spoken to at the Board. Again, the

Committee concluded that it would allow the agent to speak to his proposed size

stratification.

[9] In the Committee’s view, a party to a Board has a right and indeed an

obligation to do as the assessor did and object to the actions of a Board if it is

believed that those actions will disadvantage the party’s position in the hearing. As

is the case for this appeal, should the Board dismiss the objection, the objecting

party has further options available to ensure fairness is maintained within the

process. The first option available would be to continue with the hearing knowing

that once the Board’s decision has been rendered, a challenge relating to the

appropriateness of its decision on that specific issue and others if required, through

an appeal to this Committee, could be undertaken. A further option would be a

request by the party that the Board permit an adjournment of the proceedings in

order that the party could properly prepare its position and response to the issue

that the Board has added.

[10] The Committee notes that for this appeal the assessor chose to proceed

with the hearing and did not lodge an appeal to the Committee regarding the

Board’s finding that “size stratification” was an issue that was properly before it. In

response to a question from the panel, the assessor advised that the Board was not

requested to allow an adjournment of the hearing.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

Board Undertaking

[11] The agent submitted that he had not been provided with any opportunity to

respond to the Board’s November 16, 2009 undertaking to the assessor. According

to the agent, the assessor’s response to this undertaking was dated December 4,

2009 and was received on December 9, 2009. The Board’s decision for this appeal

was dated December 15, 2009. The agent argued that this timeline provided him

with insufficient opportunity to put forward his position on the assessor’s

undertaking.

[12] The assessor argued firstly that as the classification of the two properties

considered through the undertaking was not a ground of appeal to the Board and

secondly, the Board’s decision did not turn on the undertaking, there was no need

for the Board to await a response from the agent to the undertaking. He argued

that accordingly, all submissions relating to the undertaking by the agent as found

in paragraphs 75, 77, 78, 79 and 80 of AAC Exhibit A1 should be considered as

new evidence and argument and should not now be considered by the Committee.

[13] For the following reasons, the Committee advised the parties that it was not

prepared to accept the assessor’s position on this issue. Firstly, in its decision the

Board advised that it heard and accepted submissions from the agent relating to

the consistency of the assessor’s classification of townhouses and low-rises.

Secondly, while the decision rendered did not turn on the information provided to

the Board in the undertaking, had the agent been afforded opportunity to provide

his position on the undertaking, this may well have changed.

[14] As advised at the hearing, the Committee determined that it would allow the

agent to provide evidence and argument relating to the facts placed before the

Board by the assessor, as found in the assessor’s December 4, 2009 response to

the undertaking.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

CONCLUSIONS AND REASONS:

[15] This Committee has received a series of appeals against decisions of the

City of Saskatoon Board of Revision, and on the basis of the presentations of the

appellant and respondent, must decide if the record shows that an error has

occurred. The role of the Committee is not to redo the hearing. Rather, the

Committee is to review the evidence from that hearing and determine whether

the Board came to the proper conclusion in rendering its decisions. Should the

Committee conclude that the Board did not come to the proper conclusion based

upon the evidence before it the Committee is then required to do what the Board

ought to have done. The onus is upon the appellant to demonstrate to the

Committee where the Board has erred.

[16] The agent advised that the valuation model developed by the assessor was

not being challenged as his concern related solely to whether the 12 sales that had

been combined to form the West & WC-North grouping were comparable to the

subject in terms of either location or size.

[17] The agent referenced the air photo and the “West & WC-North Lowrise 6.06

GIM Sales Analysis” as included in Appendices 5 and 7 of Exhibit A4 in noting that

the sales used by the assessor to establish the applied GIM of 6.06 were taken

from two distinct multi-family neighbourhoods. He noted that the two

neighbourhoods are identified on Appendix 2 of Exhibit A4 as 15003 and 15004.

The agent advised that five of the six sales that were situated in neighbourhood

15004 were within walking distance to SIAST Kelsey Campus and as a result were

not comparable to the neighbourhood that the subject was located in as it was

removed from this influence.

[18] The agent submitted that the sales analysis found at Appendix 9 of Exhibit

A4 supports his position that a better stratification of sales would be achieved by

using the six sales from within the subject’s neighbourhood. He noted that if this

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

were to occur, the EGIM (effective gross income multiplier) decreases from 6.06 to

5.87. According to the agent’s calculations the coefficient of dispersion (COD) for

the new grouping would be 18.38%.

[19] The agent further argued that the physical attributes of the subject were

more comparable to the four sales listed at paragraph 53 of AAC Exhibit A1 which

were all greater than 45 units in size. He noted that the Market Effective Gross

Income (EGI) for these sales ranged from a low of $320,145 to a high of

$1,597,216 and these amounts were more similar to the subject’s EGI of $□ (A).

According to the agent, a grouping which includes these four sales would likewise

result in the application of a GIM of 5.87.

[20] According to the assessor the stratifications proposed by the agent result in

a COD around the six sales located in neighbourhood 15004 of 2.23%. In his view,

a COD of < 5% indicates a situation where sales chasing is occurring or the sales

sample is not reflective of the population. The assessor noted that the agent’s

stratification at the neighbourhood level for the subject’s neighbourhood result in a

higher COD on the assessment to sales ratio (ASR). He argued that this fact in

conjunction with the issue relating to the non-representative sales sample

remaining for neighbourhood 15004, supports a finding that the Board did not err in

concluding “… an alternate stratification is possible; however, it is not convinced

that it is better, except for perhaps the subject.”

[21] As it relates to the greater than 45 unit stratification proposed by the agent,

the assessor noted that while this issue was identified in the notice of appeal, the

agent presented no evidence of the resulting ASR or COD to the Board for its

consideration. He argued that section 163 of the Act is clear in its requirement that

assessed values be prepared using mass appraisal and that mass appraisal

requires statistical testing be completed. In his view, the Board did not err in finding

“[a]s for the reference to a “greater than 45 unit” break point, the Appellant provided

no evidence to support such a stratification.”

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

[22] The assessor further submitted that the use of the median as the measure of

central tendency mitigates the impact of the high and low data elements on the

analysis. He referenced the “Mann-Whitney Test” as found at page 33 of Exhibit

R1 in support of his position that the 12 sales from within this stratification were

appropriately grouped together.

[23] As it relates to the agent’s position that the sale of 107 Gropper Crescent

should not be included in the sales analysis, the assessor argued that the Board did

not err in accepting his reliance on the low-rise building descriptors provided by

Marshall. He noted that all four units included within 107 Gropper Crescent are at

or above grade level and accordingly, has been categorized as a low-rise

apartment building pursuant to Marshall’s guidelines. He submitted that there is no

requirement in the descriptors for a common entranceway and as such, existence

of this feature is not a determining factor. According to the assessor, all low-rise

apartment buildings have been categorized using these guidelines.

[24] The assessor submitted that the issue relating to the inclusion of 107

Gropper Crescent in the sales analysis is similar to an issue recently revisited by

the Saskatchewan Court of Appeal (the Court) in its decision for 959360 Alberta

Inc. v. City of Regina, supra. He submitted that the following comment by the Court

at paragraph 42 of this decision maintains the assessor’s discretion to make

reasonable choices in determining assessed values:

“In circumstances where the law does not dictate a particular outcome, discretion is the exercise of a decision-making power to choose one reasonable, just, fair or equitable outcome over another.”

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

Revised GIM Based On Neighbourhood or Complex Size Stratification

[25] The Committee notes that the appellant is clear in his position that the Board

erred in failing to order the application of a revised EGIM of either 5.87 or 5.57 to

determine the subject’s assessed value. The analysis used to determine this

requested EGIM is found in Appendix 9 of AAC Exhibit A1. According to this

analysis, the re-stratification of the 12 sales included in the assessor’s grouping to

the neighbourhood level or alternatively to a greater than 45 unit grouping would

result in a revised EGIM of 5.87. The removal of the sale of 107 Gropper Crescent

from the proposed grouping at the neighbourhood level would result in the

application of the recommended 5.57 EGIM. For the reasons that follow, the

Committee does not accept the agent’s position that the referenced analysis

identifies that the Board erred in its decision maintaining the subject’s assessed

value as determined by the assessor.

[26] Firstly, the Committee accepts the agent’s calculations as found in Appendix

9 of AAC Exhibit A1 which establishes that at the neighbourhood level, the ASR

with the Gropper sale both included and excluded, is 1.00 and the COD on the ASR

is 18.38% and 12.21% respectively. However, the Committee is not prepared to

accept the subsequent calculations provided by the agent which rely on a forced

“Median_EGIM” of 6.06. By definition, the COD is reflective of the average

absolute deviation from the median of the sales array. Accordingly, the Committee

accepts the assessor’s position as identified at page 25 of Exhibit R1 that the COD

on the ASR for his grouping with its calculated median EGIM of 6.06, is 10.7%.

The Committee notes that the ASR resulting from this analysis is likewise, 1.00. As

the agent’s proposed re-stratification has had no impact on the ASR and results in

a significantly higher COD, the Committee finds that it cannot support a finding of

error by the Board on this basis.

[27] Secondly, the Committee references the “West & WC-North Lowrise 6.06

GIM Sales Analysis” as found at Appendix 5 of Exhibit A4 in finding that there is no

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

support for the agent’s proposed re-stratification at either the neighbourhood or

complex size level. According to this analysis, both the lowest and highest “Mkt

EGIM” is from the subject’s west neighbourhood. The remaining 10 “Mkt EGIM”

identified within this analysis fall within the 4.52 to 9.87 range established by these

two sales and as they are interspersed with each other, provide no evidence that

neighbourhood has an impact on “Mkt EGIM” for this sales grouping.

[28] In considering the agent’s position relating to a greater than 45 unit

stratification, the Committee notes that again, within this sales array, two of the four

sales meeting the identified criteria are below the median (both at 5.57) while two

are above the median at 6.17 and 7.75. Further, the sale of the 217 unit low-rise

complex which was the largest complex in the sales array had the second highest

“Mkt EGIM”. Again, the dispersion of the “Mkt EGIM’ for the four apartments which

were greater than 45 units throughout the sales array clearly supports the

assessor’s conclusion that complex size does not have an impact on “Mkt EGIM.”

[29] In light of the evidence provided to the Board, the Committee concludes

that it did not err in its finding that “[t]he Panel is satisfied that the sales used by the

Assessor are indeed representative of the subject and rightly belong in the sales

array.”

107 Gropper Crescent Sale

[30] The agent submits that the four unit sale located at 107 Gropper Crescent is

not comparable to the subject and accordingly should be removed from the sales

analysis. He argues that if the valuation parameters identified in the Handbook are

considered, equity cannot be achieved with the use of this sale as it does not meet

the test of similarity.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

[31] The assessor submitted that the agent provided no evidence to the Board

which would support its position that this sale had been inappropriately included

in the sales array for this stratification.

[32] The Committee is not convinced that the evidence before the Board would

support a finding that it erred in its decision on this issue. The results testing as

found at page 29 of Exhibit R1 reflects all low-rise apartment sales that were

used by the assessor for analysis purposes. No evidence was led by the agent

that additional sales should be considered or that any sales should be removed

from the analysis. The testing completed provided a median ASR for the 85

sales of 1.00 with a COD of 14.4%. In the Committee’s view, the accompanying

scatter plot further supports the assessor’s decision to include all low-rise

apartments in the same sales analysis.

[33] Additionally, the Committee is aware of the following guidance provided by

Cadillac Fairview Corporation supra:

“[36] The word comparable is not defined in the manual, nor are the words compare, comparative, comparison or similar. We must take them to have their ordinary dictionary meaning, subject, of course, to the context in which they are used, that is, the surrounding words and the manual as a whole. The immediate context is that the purpose of the comparison to buildings that have been sold is to measure market influences on the value of any building, and to use the comparison in the determination of a MAF. Subject to this context, which will be considered in detail with the appellants' grounds of appeal, the use of words of such broad and general meaning confer upon the assessor a broad discretion in respect of determining whether buildings are comparable within the meaning of the manual. ... [42] There can be no question that the grouping of buildings chosen by the assessor, enclosed shopping centres, consists of comparable or similar buildings within the meaning of the manual. The criteria used by the assessor to arrive at the grouping were all relevant to comparability: size, age, specific use, zoning, geographic distribution, and market dominance. While a grouping which included Midtown with all other downtown commercial retail buildings (or other possible groupings) might also be said

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to consist of comparable buildings within the meaning of the manual by reason of having in common that they are commercial retail use buildings, the choice amongst these possible groupings was clearly left to the discretion of

the assessor.” (Emphasis added)

[34] In light of this guidance and the evidence before it, the Committee

concludes that the Board did not err in its finding that “[t]he Panel believes that the

property has been correctly classified by the Assessor and should remain in the

sales array.”

Undertaking

[35] As it relates to the December 4, 2009 undertaking provided to the Board

by the assessor and the Board’s failure to provide the agent with an opportunity

to respond to the submission received by it, the Committee finds that the Board

erred. It is the Committee’s position that all parties to an appeal must be given

opportunity to provide evidence and comment on issues that the tribunal has

found that it will hear.

[36] As noted earlier, the Committee does not accept the assessor’s position

that as a result of the decision, nothing turned on this issue. Had the agent been

provided an opportunity to respond, the Board may have re-thought its position

relating to the inclusion of 107 Gropper Crescent within the low-rise apartment

sales analysis. The fact remains the agent was not provided an opportunity to

respond to the undertaking prior to the decision being rendered. As such, we

simply do not know what impact if any a response from the agent may have had

on the eventual outcome of the Board’s decision, had a response been received

by it.

[37] Accordingly, the Committee has reviewed and given consideration to both

the assessor’s and the agent’s position on the evidence provided to the Board

through the assessor’s provision of the undertaking. The Committee accepts the

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assessor’s position that the descriptions provided by Marshall are both

appropriate for ensuring properties are correctly classed and that the assessor

did not err in classifying the improvement located at 107 Gropper Crescent as a

low-rise, due to the fact that it meets the following criteria specified in Section 12,

page 1 of Marshall for a low-rise apartment:

“Multiple residences, often referred to as garden apartments, are buildings of three or fewer stories, in which each unit has a kitchen and bath, and which are designed for other than transient occupancy. Priced per building, costs include common areas such as lobbies, hallways, laundry, recreation, etc.”

[38] The Committee does not accept the agent’s position that the above

descriptor requires common areas to exist in order to be considered a low-rise.

The descriptor is clear in solely advising that the cost include common areas.

Not all low-rise apartments include lobbies, laundry and recreation areas and

accordingly, the lack of these features, like common areas, would not alter the

fact that the building is properly described as being a low-rise apartment building.

DECISION:

These appeals are dismissed. The filing fees shall be retained.

APPEALS 2009-0130, 2009-0131, 2009-0134, 2009-0137 and 2009-0141[]

DATED AT REGINA, Saskatchewan this

20th day of October, 2011. SASKATCHEWAN MUNICIPAL BOARD Assessment Appeals Committee - original signed by - Per: _________________________ David Wilkin, Chairman

- original signed by - Per: _________________________ Cynthia J. Schwindt, Secretary

I concur:

- original signed by - _________________________ Jenny Lai Yu, Member

_________________________ *Robert L. Edwards, Member Some of the information in this document has been severed from the document pursuant to The Freedom of Information and Protection of Privacy Act and/or The Cities Act: Reference Severed pursuant to A The Cities Act, subsection 202(1) B The Cities Act, subsection 202(2) C The Freedom of Information and Protection of Privacy Act paragraph 24(1)(d) D The Freedom of Information and Protection of Privacy Act paragraph 24(1)(e) E The Freedom of Information and Protection of Privacy Act paragraph 24(1)(i) F The Freedom of Information and Protection of Privacy Act paragraph 24(1)(k)

*At the time of signing the decision the member was no longer a member of the Assessment Appeals Committee.

saskatchewan municipal board assessment appeals committee

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