The Dryden Observer

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Communities join efforts following Domtar assessment reviews

Chris Marchand

Chris Marchand served as editor of the Dryden Observer from August 2009 to April 2018.
An aerial view of Domtar’s pulp operations in Dryden, ON. Photo by Chris Marchand

The City of Dryden will join efforts with officials from Espanola, Fort Frances and Thunder Bay to explore their political options following a provincial assessment review board decision that will have significant financial ramifications for those communities.

Along with Dryden, the community of Espanola also received word, Feb. 1 that an assessment appeal from Domtar resulted in a property value assessment of approximately $10 million for that community’s mill site — about 50 per cent lower than what the community had anticipated and budgeted for. The assessment board’s decision leaves Espanola on the hook for $4.9 million in property tax refunds to Domtar for the years 2009-2012.

In Dryden, city management had budgeted for a mill site reassessment in the range of $36 million, only to be taken by surprise when the assessment review board placed the site’s value at approximately $14 million. The new figure creates a $1 million dollar taxation shortfall in an already lean 2013 draft budget.
The decision also affects provincial transfer  payments from the Ontario Municipal Partnership Fund (OMPF) and District School Area Board (DSAB) funding which is linked to assessment.

Dryden and Espanola’s plight is of particular concern to Fort Frances and Thunder Bay, communities who are both in the midst of ongoing assessment property appeals in their large industrial sector.

During the Assessment Review Board Hearing, the decision favoured the Domtar representatives who used cost comparisons with their mills in other North American jurisdictions to make a case for applying a higher rate of ‘economic obsolescence’ to the valuation model. On 300 acres of land with an industrial complex of 2 million square feet, Domtar reps argued successfully that the ‘overbuilt’ Dryden site does not currently resemble what Domtar would build to replace it.

City Manager Joe van Koeverden says the Municipal Property Assessment Corporation (MPAC), the city’s representation in the matter, made far less of an impact with the review board.

“We believe that MPAC did a poor job on representing us in this situation and that was recognized in the assessment review hearing report a few times when he (board chair) criticized MPAC for their model.”

In his final summation, Assessment Review Board Chair J.M. Wyger said, “I recognize that this is a substantial reduction to the assessments as returned. It represents a significant impact on the assessment base for the city but I can only say that those financial implications are not a material consideration to the issue of current value. For the people involved with the declining fibre industry there are not many winners, but several losers including industry workers, contractors, suppliers, managers and investors. The reduction of property value attributable to the decline of the industry will cause the municipality to lose a significant part of its assessment base and that is simply the City of Dryden’s share in the costs resulting from that decline.”

In Espanola, municipal treasurer Cynthia Townsend says the news was devastating to the community of 5,300 whose budgeted projection were as far off the mark as Dryden’s.

“The municipality relies on MPAC’s valuations and for the decision to be almost one-third of this figure is unacceptable. We cannot expect our taxpayers to be held responsible for this financial burden which is unduly handed to them,” said Townsend. “This situation identifies critical errors in the methodology used for calculating these values when such adjustments are made retroactively.”

Van Koeverden says the provincial government was in contact with the city of Dryden on Monday. He adds representatives from Dryden, Espanola, Fort Frances and Thunder Bay will put the issue before cabinet ministers at the upcoming Rural Ontario Municipal Association and Ontario Good Roads Conference Feb. 24-27 in Toronto.

 By Chris Marchand

 

2 thoughts on “Communities join efforts following Domtar assessment reviews

  1. What a sad situation to happen in your area.Sounds like a huge problem to the trusting population. High taxes and low property values can only result from such a huge problem.
    How could not anyone not see this coming among your leaders in this tiny town and sparse region?
    One can only shake their head and pray hard.

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