If you accept the City of Thompson's math, almost three out of four local property taxpayers - around 71 per cent - can expect to pay higher taxes next year, likely in the range of $200 to $500 more than they paid in 2009, because of provincially-mandated reassessment based on the April 1, 2008 market value of their property.
Not so, says the provincial agency responsible for the reassessment. Louise Hodder, district supervisor in the Thompson Assessment office in the province's Department of Intergovernmental Affairs, which does assessments for municipalities outside of Winnipeg throughout the rest of Manitoba, said last Friday: "The tax impact report (which is a preliminary report run around March, 2009) suggests about 50 per cent of properties will see a decrease or an increase of not greater 10 per cent or $100 per year. About 50 per cent will see increases of greater than 10 per cent or $100 per year. This includes all classes of properties."
Hodder said she shared her report with city officials before they released their own numbers at a community neighbourhood meeting Sept. 23. She learned of the numbers the City of Thompson released when contacted by the Thompson Citizen.
The overall increase in value for the City of Thompson from 2003 to April 1, 2009 is 56 per cent," Hodder said. "The overall increase in value for the Province of Manitoba, including the City of Winnipeg is, coincidentally, 56 per cent."
For a single-family detached home with a market value of $230,300 - in a purely hypothetical example - if you use the City of Thompson's numbers and not the province's, it would work this way in calculating and applying the property tax if this year's figures and methodology are used. The city takes the $230,300 figure and multiplies it by .45 per cent for residential properties to arrive at a figure of $103,635.
That $103,735 in 2009 would then be multiplied by the combined mill rate of 71.736, which has two components - a 38.376 municipal component and a 33.360 education component, set by the board of trustees of the School District of Mystery Lake, and over which the city has no control but must collect. Multiplying $03,635.00 x .071736 = $7,434.36 - the amount of property tax the homeowner would pay in this hypothetical example, said Carol Taylor, the City of Thompson's chief financial officer.
Commercial-industrial assessed values are multiplied by .65 per cent rather than .45 per cent.
The mill rate is the tax per dollar of assessed value of property. The rate is expressed in mills where one mill is one-tenth of a cent ($0.001).
Most property owners received their reassessment notices from he province in June. Mayor Tim Johnston said Sept. 23 the "City of Thompson is working on a plan to control the impact that this reassessment will have on taxpayers" and one option is that council could vote to phase it in over several years.
Reassessment appeals must be submitted to the City of Thompson by Nov. 17 and the board of revision will hear all appeals on Dec. 3. Under the Municipal Act the 2010 assessment roll must be finalized and presented to the municipality by Dec. 31 of the prior year, "so the municipalities have stabilized numbers to work with when they start their budgeting process in the new year," Hodder said.
Reassessment alone, based on higher market values, holds the likelihood of driving up at least some residential and commercial tax bills - whether it be 71 per cent, 50 per cent of some other number - in the city regardless of where council sets the mill rate or how it works out its next budget, which Coun. Harold Smith, a veteran member of the city's finance and administration committee, said Sept. 23 he hopes to see presented for public comment in early January.
This year, the City of Thompson released its financial plan and budget numbers for 2009 April 1, followed by two sparsely attended public information meetings later in April, after which the budget was formally adopted very close to how it was originally presented.
Before reassessment, a property owner with a house assessed at $200,000 had a net tax increase of 3.45 per cent this year - for a total tax bill of $5,806.24 - an increase of $193.63 over last year. The median price market value of single detached homes in the city was about $189,000 in February. Final tax property tax payments to the city for 2009 are due this month.
For a commercial property assessed at $911,300, the total tax bill this year went up to $52,017.37 - an increase of 3.18 per cent or $1,603.48 more than last year.
Taylor said while the City of Thompson has a "small commercial tax base," smaller relatively than other cities of comparable size, she doesn't know what the ratio of commercial to residential property is in the city. There are several categories of various types of residential property, while commercial is linked with industrial in a tax class, and there is also an institutional category.
Vale Inco's voluntary grant-in-lieu of $6.220 million is divvied up between the City of Thompson, Local Government District of Mystery Lake and the School District of Mystery Lake. The current grant-in-lieu of taxes agreement runs from Jan. 1, 2005 to Dec. 31, 2012.
The city's share of the $6.220 million is 71.201 per cent, or about $4.43 million, which amounts to about 17.37 per cent of this year's $25.497-million budget - up from $24.537 last year.
Hodder said the city's commercial assessment for budget purposes in 2010 will be about 28 per cent of the overall property tax base, which she added didn't strike her as particularly low for Northern Manitoba, although she said she wasn't able to make exact comparisons. If you were to include Vale Inco in the commercial-industrial tax category, which technically it isn't because it pays the voluntary grant-in-lieu, Thompson would actually likely appear t have a higher than average commercial-industrial tax base, Hodder said.
The city's assessed residential value for 2010 will be around $245 million and the commercial-industrial assessment will be about $97.1 million, Hodder said
Johnston, who first told the Thompson Chamber of Commerce on June 4, 2008, that the city needs to grow the budget by almost $5 million to $30 million to do what needs to be done, reiterated that $30 million number at a sparsely attended community neighbourhood consultation meeting on setting initial public priorities for next year's budget at Westwood Elementary School on Mallard Crescent Sept. 23.
City of Thompson senior administrative staff and council - including Johnston and Smith, as well as councillors Charlene Lafreniere and Judy Kolada, along with deputy mayor Oswald Sawh, easily outnumbered the eight members of the public who attended.
Three of those eight included Volker Beckmann, who has been involved in numerous issues, including in recent years Spirit Way; Lou Morissette, a liquor inspector with the Manitoba Liquor Control Commission (MLCC), retired RCMP staff sergeant and most recently a council-appointed citizen representative on the public safety committee; and Keith MacDonald, president of the Thompson Chamber of Commerce.
"It's embarrassing there are more city representative then members of the public," Beckmann himself observed at the meeting.
As well as the grant-in-lieu of taxes Vale Inco pays the city, the company is also providing an additional $250,000 per year for $2.5 million in special funding over 10 years in its separate Thompson Unlimited community economic development initiative.
The city is also projecting revenue of about $500,000 this year from the new five per cent hotel accommodation tax bylaw that came into effect Jan. 1. Sixty per cent of that revenue is to go into infrastructure reserve, 20 per cent to public safety reserve and 20 per cent to affordable housing reserve, which includes $54,000 earmarked specifically for Thompson Neighbourhood Renewal Corporation (TNRC)'s new "Our Home Kikinaw" initiative.
NDP leadership hopeful and Thompson MLA Steve Ashton, standing outside Pembina Village Restaurant in Winnipeg Sept. 24, said if he becomes premier he'll remove provisions in the Municipal Revenue (Grants and Taxation) Act that allow municipalities to impose a "tax on persons in the municipality who purchase or consume motel and hotel accommodation, or meals at a restaurant or dining room, or liquor." The former minister of intergovernmental affairs said he'd remove the provision to ensure small business owners won't have to worry about another tax on liquor sales and restaurant meals. Ashton, however, also committed to removing the provincial sales tax municipalities pay on water and sewer infrastructure projects.
Gary Ceppetelli, the city's director of planning and community development, said Sept. 23 the province's last reassessment before this year was in 2006.
Taylor said the province's 2006 reassessment uses 2003 market values and the province has been moving toward more current market value assessments to reflect more accurately increases or decreases in property values.
While around 71 per cent - or about 2,882 property owners - are going to experience increased assessments, according to the city's publicly released estimate, the remaining 29 per cent, of around 757 properties, will see an assessment decrease, the City of Thompson says.
In market value assessment, recent sales of similar properties in an area are the primary vehicle in determining the assessed value of a particular property. Five major factors usually account for about 85 per cent of the value: location; lot dimensions living area; age of the property, adjusted for any major renovations or additions; and quality of construction. Other features that may affect value include: number of bathrooms, fireplaces, garages, pools, whether properties have water frontage, etc.
Where it can get tricky is if there are only a small number of sales of comparable properties a community to determine assessments.
Also, an assessment, while it establishes a theoretical market value, does not set the actual selling price a homeowner would get for that hypothetical $230,300 single-family detached home, used by way of illustration earlier, if he or she sold it today. That selling price can only be arrived at by the mutual consent of a willing seller and willing buyer.
