The Dryden Observer

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City, MPAC split over ARB appeal

Chris Marchand

Chris Marchand served as editor of the Dryden Observer from August 2009 to April 2018.

If Dryden is going to challenge the Assessment Review Board’s (ARB) decision on the value of the Domtar Mill, it might have to do so without the support of the Municipal Assessment Review Corporation (MPAC).

On Mar. 7, MPAC announced it had reviewed the decision that saw the Domtar Mill assessed at $14 million rather than the expected $36 million. With its legal counsel, it determined there was insufficient evidence to appeal the decision.

“There’s no question that there’s a significant decrease in the assessed value. We recognize that for the city of Dryden it’s a significant impact of the economy there,” said a spokesperson for MPAC.

“What you’re looking for is if the ARB member did not reach his conclusion in the manner that is expected under a judgment of law. We’ve already presented our evidence to this judge on how we would put the value on that property and the way Domtar puts the value on that property. We’ve already presented that evidence. That’s already a matter of public record and a judgment has been rendered. The only thing we can do is say there was an error in the judicial judgment, not in the facts.”

MPAC stated it’s willing to change its position if new evidence is presented.

While the mill’s 2012 and 2013 tax rate is expected to proceed unchallenged, Dryden is requesting a stay be applied to the $5.4 million in retroactive taxes it has been asked to pay back to Domtar, as far as 2009. When retroactive school taxes are compounded into that figure, the public will lose $7.8 million that has already been spent.

Dryden is intending to challenge the ARB, arguing it reached “…its determination upon unsubstantiated evidence from Domtar’s expert while ignoring relevant, substantiated evidence of Domtar’s own employees on site, without reasons.”

The ARB based its assessment of Dryden’s Domtar Mill on what the company argued was a similar mill in Marlboro, South Carolina, 2,500 kilometres to Dryden’s southeast.

Where the Marboro plant has a pulp production capacity of 338,000 tonnes to Dryden’s 319,000 tonnes, the South Carolina outfit also has an annual paper production capacity of 389,000 tonnes. Dryden produces papergrade, bleached softwood and kraft market pulp. While Marboro produces softwood kraftmarket pulp, it also produces bleached hardwood, Xerographic, offset, envelope and form bond. Industrial regulations and climate are also notably different.

“We’re saying they used a plant that is not similar to what we’re doing here and doesn’t have the same cost of operating,” city manager, Van Koeverden said. “The whole question around that is this issue of economic obsolescence. The economic obsolescence factor is what they used as the final calculation to reduce the value from an agreed-upon amount to the final amount.”

Economic obsolescence can take industry-wide conditions into account and the ARB did just that, calling Domtar “a victim of a dying industry.”

While MPAC suggested a reduction based on an economic obsolescence of 20 per cent, Domtar portrayed it at 60 per cent. The arbitrator settled at 52 per cent, weighing heavily in the direction of the company.

Mayor Craig Nuttall is calling for a complete redesign of MPAC assessments, arguing not enough credence was lent to the economic climate on the municipal side.

“When I was in Toronto, I had the chance to talk to a lot of mayors. They said, ‘it’s not just forestry.’ This decision made with this mill is going to affect every large industry. This is what Thunder Bay is worried about. How are they going to assess CPR? How are they going to assess CNR? What they did at the mill here is totally out of line. (MPAC) can say what they want to say but they’re supposed to represent us and pardon the expression, they screwed us.”

 By Jon Thompson

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