Port property valuation remains a contentious issue between Port Metro Vancouver and local municipalities that say they’re being shortchanged by the port authority’s payments in lieu of property taxes (PILTs).
The disagreement was highlighted in a new report produced for the Municipal Port Property Taxation Fairness Commission struck by Metro Vancouver’s port cities commission and chaired by North Vancouver City Mayor Darrell Mussatto.
“I thought I was going to hear that the port was paying proper compensation,” said Mussatto of the report’s findings. “The surprising one was the valuation of property. The port used a private company called Altus Group. The municipalities have long depended on BC Assessment Authority [BCAA] and were using BC Assessment figures.”
According to Mussatto, the Altus and BCAA valuations in some cases were “significantly different.” He said the Altus Group numbers favoured the port, while the BCAA figures favoured the municipalities.
“We also wanted them to use BC Assessment,” he said. “From what I understand, other federal agencies use BC Assessment. The port does not.”
But, according to Tom Corsie, Port Metro Vancouver’s vice-president of real estate, “Port Metro Vancouver is statutorily required to make an independent determination of the value of federal properties it manages having regard to all relevant factors, including the valuations prepared by the BC Assessment Authority.”
He added that the Altus Group valuations are made by “a respected national consulting firm with specialties in realty valuation and advisory services. It’s not, in our view, an argument as to whether Altus is an assessment authority. It’s a statutory obligation for the port authority to do its job.”
To make a “fair and reasonable” determination of the property value included in the City of North Vancouver’s 2009 PILT application, Corsie said the port retained the Altus Group to fulfil its obligations.
“We’re continuing to get the same question over and over again. [North Vancouver City] need to read the act carefully, and they’re not doing that.”
The report makes seven recommendation, five of which deal with PILTs:
- Port Metro Vancouver should make PILTs on its properties as if the properties were taxable;
- If Port Metro Vancouver does not make payment comparable to what the property taxes would be, it should explain the reasons for the difference;
- Port Metro Vancouver and the port municipalities should agree to timeliness for submitting and processing PILT requests to ensure predictability of payment timing;
- Port Metro Vancouver and the BCAA should agree to work together to resolve differences in valuation for federal PILTs on port properties; and
- Where valuation differences can’t be resolved, Port Metro Vancouver and the BCAA should establish a PILTs valuation dispute resolution panel.
Other report recommendations included modifying the formula that determines compensation to offset the provincially imposed port land tax cap so that municipal revenue from port properties is adjusted annually by an index of Metro Vancouver municipal property tax growth.
“If the province felt that municipal taxes were a significant burden to waterfront industries, then the tax cap made sense,” said Mussatto. “But the amount of money lost by municipalities should have been made up by the provincial government.”
The report also recommended that the port cities committee and municipalities concentrate on ways to improve their working relationships with the port authority rather than focus on port governance.
Corsie and Mussatto agreed that the two sides are working closer together to reach a mutually agreeable outcome.
“Municipalities don’t want to put [waterfront industries] out of business, but we want to make sure everyone is paying their fair share. I can’t speak for how the ports are funded, but maybe the federal government needs to have better understanding of how ports are operated so municipalities can get their fair and just compensation.”
Corsie confirmed the port is working more closely with the BCAA to “get to the bottom of what is the right assessment.”
He added that an observer from Metro Vancouver representing the municipalities is also involved to provide “transparency” to the proceedings.