Eight commercial properties in Banff are appealing property assessments to the tune of $64.5 million, pushing politicians to put the potential cost of close to $1 million on commercial taxpayers.
At a council meeting Monday (May 9), council voted to amend its 2016 operating budget to increase commercial taxes and transfer $965,957, including $150,000 in anticipated legal fees, to the budget stabilization fund to mitigate exposure to the appeals.
The money will stay in reserve until the appeals are completed and, in the event the appeals are unsuccessful, the money will be returned.
Town of Banff officials say one consulting firm, which is known to approach businesses in several municipalities, is representing all eight properties. The appellants’ names and civic addresses are protected under Alberta’s privacy laws.
“The municipality has eight appeals and of those appeals, they total $64 million,” said Kelly Gibson, the Town of Banff’s corporate services manager.
“To put that into perspective, if we take the assessed value of Banff Park Lodge and Cascade Plaza, that would only come up to $55.5 million, so it’s a sizable amount.”
If an appeal is successful, the municipality would have to adjust the assessment and refund any overpayment of taxes. This would also include a portion of the provincial school tax and Bow Valley Regional Housing levy.
Gibson said municipal taxes that would have to be returned would cause a deficit and, if no other savings could be found, it would be funded through the budget stabilization fund, which has a balance just shy of $450,000.
“As the budget stabilization fund is not sufficient to cover this, the Town would have a substantial deficit even after depleting the reserve,” he said.
“If this is not levied in 2016 and results in a deficit, the impacts would be borne by all taxpayers until it could be levied in 2017.”
Councillor Ted Christensen was the only councillor to vote against the move, saying council should be looking at making cuts to the budget.
“I’m just not sure if putting a further (levy) on is the correct way to go,” he said. “To me, it’s a shared responsibility and maybe we have to accept a deficit and reduce some of our budget in some manner.”
But Coun. Stavros Karlos spoke up against that, saying that effectively amounts to “blackmail.”
“We are not elected to sit here and be held hostage by appeals, insofar as we go through a budget process as elected representatives, set the budget, and produce the services we deem everybody wants,” he said.
Officials say one of the problems is the cost of appeal is just $650, making it highly affordable for big business to launch assessment appeals on multi-million properties whether or not they have a strong case.
Fees used to be set on a percentage basis, but the previous Conservative government made changes to the fee schedule to move away from that – something the Town of Banff has long been voicing concern over, including during the Municipal Government Act review.
In this case, Karlos said it is costing the appellants just $5,200 to launch appeals on $64 million worth of assessed value.
“I believe that actions of provincial government now have unduly punished local ratepayers and have put us in the worst position. I’m not happy to be sitting here doing this, but their system is screwed up and we’re paying the price,” he said.
“This administration and council have brought this up previously that we would be in this position sooner or later, and now a third party is using this in order to launch appeals across the community.”
Coun. Chip Olver was reassured the money would be returned if the appeals were unsuccessful.
“If all of these appeals happened to be successful, that’s almost $1 million of loss, and it’s just too significant having this knowledge not to take action on,” she said. “Nobody’s happy about this, nobody wants to go to non-residential taxpayers with this cost, but it just seems so necessary in order to protect the whole community from the downside of this situation.”
