Business owner Kristy Van Slyck is not convinced that the Saskatchewan Assessment Management Agency (SAMA) will voluntarily undertake a secondary audit of its activities, so she is taking her concerns straight to the organization’s CEO.
Van Slyck submitted a secondary audit request to SAMA CEO Betty Rodgers on Jan. 16 on behalf of her company, Viridian Property Corporation, and community businesses Trico Developments Ltd., R.L. MacLauchlan Holdings Ltd., Global Ag Risk Solutions, Brim Brite Property Ltd. and BJMJ Holdings Ltd.
She also sent copies to the Honourable Don McMorris, minister of Government Relations, Mayor Clive Tolley, city manager Jim Puffalt, Moose Jaw Express/MooseJawToday.com and the MJ Independent.
Some issues Van Slyck raised in the letter were ones she and business owner Bernie Dombowsky discussed during their recent presentation to city council.
Van Slyck told media afterward that she was dissatisfied with council’s supportive motion since she believed there was enough evidence to trigger a secondary audit.
Letter to CEO
The business community want SAMA to conduct a secondary audit in accordance with section 22.1(3) of Moose Jaw’s The Assessment Management Agency Act, Van Slyck wrote to Rodgers.
That section says the agency may conduct one or more secondary audits and may determine the frequency and method of doing so, to ensure that a municipality’s assessments:
• Are based on properly collected sales data, physical data and other applicable data
• Have been carried out in accordance with all applicable acts and regulations and in accordance with the assessment manual and any other materials that the agency established
“It was our understanding that a secondary audit has never (been) conducted in the province since this legislation was introduced,” Van Slyck wrote.
“The legislature clearly had concerns about quality assurance in the province and wanted to ensure that ratepayers could rest assured that it was occurring by providing the means necessary for SAMA to conduct a primary or secondary audit.”
A detailed audit
Alberta has a similar audit system — conducted annually — but describes its review as a detailed audit that combines the factual, results-oriented ratio study with the more investigative, process-oriented procedural audit to determine if assessments meet valuation and administration standards, she continued.
Meanwhile, a SAMA handout suggests its secondary review policy is for an “issue-based audit” and “triggered by systematic issues,” neither of which are true according to the legislation, said Van Slyck. She also refuted the idea that “significant statutory non-compliance” needed to trigger a review.
“The audit is a means of determining whether an assessment service provider is doing their job properly; it does not need to be triggered as is being presented by SAMA in its materials,” she continued.
The legislation gives SAMA the ability to reassure ratepayers and municipalities that it is conducting assessments properly, she pointed out. Issues should not be required for this process to occur; instead, SAMA’s Quality Assurance Division should conduct the process to meet its legislative duties.
Reasons for a review
“There are numerous reasons for the necessity of this to occur in our city,” said Van Slyck.
SAMA’s revaluation of Moose Jaw properties occurred in 2021, which produced the lowest capitalization rates in Saskatchewan, she pointed out. While the business community is “flattered” that the agency thought Moose Jaw had the strongest commercial/industrial market in the province, that is false.
“The inflated assessed values have no basis in reality and this needs to be audited in some fashion so that the valuation can better reflect the market as of Jan. 1, 2019 (base date),” Van Slyck continued.
SAMA redid its analysis in 2022 and provided new valuations for a second-straight year, while it is defending its updated valuations at appeal hearings as “valid and equitable.”
“This makes no logical sense in recognition of the errors,” she stated. “SAMA’s inconsistent models that come out year after year raises questions about the competence of the SAMA assessment department. This is best demonstrated by the way SAMA re-classifies or re-groups sale properties (even though) there is no physical changes to the property.”
A flawed model
The agency’s past models created forth sales groups and applied the sales medians to produce the respective capitalization rate or market adjustment factor, she continued.
In 2022, SAMA still used the medians, but in cases where they resulted in lower assessments, the assessment department applied the outdated median cap rates from an incorrect model, resulting in excessive valuations and inequitable taxation, contravening Canada’s ad valorem tax system.
These issues are systemic problems that affect dozens of properties and numerous groups, resulting in values that are inequitable according to a Saskatchewan Court of Appeal determination on equity, said Van Slyck.
The Court of Appeal determined, “In short, equity cannot be achieved through the consistent or universal application of a flawed and incorrect understanding of the act, the manual or allied assessment instruments. It was a clear error for the boards to think otherwise.”
“Although this authority was provided to SAMA, the lack of follow-through is unsettling,” Van Slyck added. “We are simply asking that SAMA do their legislative duty and proceed with a secondary audit.”
