Rhino's Ramblings - Rocky Heads Into Round Twelve
By Robert Thomas Opinion/Commentary
It’s been portrayed as a David versus Goliath moment with the little guy, the underdog, up against an entire system fighting for justice in a world where seemingly there isn’t any to be found.
It has been portrayed as an epic battle with the City of Moose Jaw, or at least it’s Council, taking on one of its main contractors - the Saskatchewan Assessment Management Agency (SAMA) - to bring back “common sense” to how commercial properties are assessed for property tax purposes.
It’s also been portrayed as it’s just the way things are - the big guys always win - accept it, pay your property taxes and just move on.
And yes it’s also been portrayed as a couple of unhappy business property owners who are upset with their personal business property taxes.
No matter how you portray it how property assessments are determined for commercial/business properties is front row center once again Monday night at Council.
The issue, which if you want to take a broad look at it, should have died months ago but a determined Bernie Dombowsky and others have declined to give up the fight.
Dombowsky has been the public face while Kristy Van Slyck has poured countless hours into researching the issue.
Research the group has used to fight a giant seemingly holding all of the cards.
This is a case if you really want to get down to it is a heavy weight prize fight.
It’s Moose Jaw's own version of the Rocky movie franchise that’s been going on at public meetings, private meetings, emails, phone calls, the local media and social media for months.
It is a grueling multi-round fight that would see Rocky Balboa endure countless punishment to win over the crowd and then come back with massive body blows at just the right moment.
It pits the group Property Assessment Watchdogs seemingly outweighed, out reached and out powered by SAMA, in a quest what they call “equitable” and “common sense” to commercial/business property taxation.
It is seemingly a call for the return to a single commercial property Cap Rate from the present 14 rates established in the 2021 re-assessment.
But it is much more than that.
It’s also a call asking how SAMA came up as what the group sees as some really funky and unfair valuations that saw certain larger business properties taxes skyrocket 30 percent and higher.
The Cap Rate, or Capitalization Rate, fir those who don’t know is basically a percentage calculation that determines how long it will take a property owner to recoup their investment on a piece of property.
What the Cap Rate shows is the value of a commercial property.
It is this value in reality what SAMA uses in its model to determine a property's assessment.
The assessment is then used by City Hall to set the property taxes based up the budget.
The issue though as mentioned - just like the formula - is a lot more complex than the Cap Rate.
Dombowsky and his group are taking on a lot more than that.
They are also taking on the sales values SAMA also uses in its models to determine asessed value as in their opinion as being inaccurate and in layperson's terms just plain silly.
As part of their model - or formula if you like - SAMA uses previous sales data over four years to help determine commercial property tax values.
The values are a snapshot of the past which are updated every four years at a reassessment.
These are sales figures and the ultimate determinant I believe which more than a few larger businesses square footage wise have cried foul on.
It is what had a group of hotel properties band together in their losing attempt to appeal their property tax assessments.
A challenge which ultomately saw the hotels lose.
Now I am not going to get into the dynamics of the entire issue but simply leave it to say there are more than a few business property owners none too happy on how their property taxes are determined.
To be quite honest the literally hundreds of pages of documents and legislation on this issue when I looked at it gave me a major migraine.
For most readers it is just going to bore you to sleep.
But rather this is a look at the fight or rather the dynamics of the battle.
This is a fight that in reality should have ended in the first round with Dombowsky and his supporters knocked out in the first round.
But like any of the Rocky movies Property Assessment Watchdogs have taken their licks and refused to stay down.
No matter how much their accounts or is it Mick has told them to stay down for the count the group has gotten up to be pummeled once again.
And as if coached by the street-wise Mick have not only refused to stay down on the canvas but mid fight changed their tactics.
And like Rocky they are slowly by their perseverance against what appears to be massive odds started to win over support not just from a select few but even the fans of their opponents.
In reality it is the only way they are going to win this fight.
If you took a look at the video the group recently put out its no longer naming the names of the commercial properties who benefitted from the new 17 categories in the 2019 property reassessment.
The benefitting businesses, except for the Credit Union, is no longer named.
Their signage is blurred in the professionally developed video. They are no longer named.
It’s not a fight anymore against the big bad lawyers, doctors offices, investment dealers and dental offices by smaller business property owners. But a knockout street brawl with SAMA.
So why has this happened?
Has something changed?
Believe it or not it has.
I am hearing murmurs out there that at least one if not more of the “institutional” businesses has privately supported Property Assessment Watchdogs’ efforts.
They like all business property owners are just subject to what SAMA has done with their model and 17 Cap Rate classifications.
And this is a key thing here in the fight.
No longer is small business property owner Dombowsky and company fighting the crowd so to speak but they are concentrating their efforts on SAMA for the knockout blow.
The strategy - if you look at the history - is ingenious.
In the past when this issue has come up it has pitted one business property owner against another business property owner.
There has been a split and the pendulum allowed to seemingly swing back and forth.
Those who have benefitted and seemingly received a tax break liked the situation while those who didn’t seemingly receive the tax break were against each other.
And you can guess what happened - the issue died and not a glove was laid on SAMA.
But this time Property Assessment Watchdogs have taken a different tack in their fight.
They’ve changed the strategy while in the ring with their target being SAMA.
It is just like a Rocky movie where they are portraying themselves as the growing crowd favourite against an evil opponent who should have won the fight three rounds ago.
Don't believe me?
When I spoke to Dombowsky he told me his accountant told him just to pay his property taxes - no matter how much the caterer saw them as wrong - pay them and accept defeat.
Don’t appeal.
I will note Dombowsky has paid his taxes early to get a discount - this is not a tax protest.
But rather it is a fight to make what Property Assessment Watchdogs see as a fair and equitable business property tax system.
It’s a fight his accountant and others gave told him is unwinnable. There is simply too much effort and time needed to even challenge the system let alone win.
Just pay the property tax bill and move on.
In a few short words the fight is pointless and be prepared for a major pummeling.
And yes that pummeling has happened.
Dombowsky told me in our sit down interview the fight has him up with sleepless nights and he has put a lot of effort into it.
Far too many hours he could have put into his business. A business which took a pummeling due to the COVID - 19 health restrictions.
Restrictions which saw Dombowsky change his business model and survive to where weddings, reunions and public meetings and above all catered functions are allowed again.
But despite what seems a hopeless battle what Dombowsky and others in his group have done has changed tactics and are going for the knockout.
They’re pushing for the City to fire SAMA and go back to an in-house assessment department prior to SAMA's hiring in 2006.
It’s not a fight pitting Dombowsky against other businesses seen in the past and Council but the group has reframed it to a fight targeting simply SAMA.
This is the Rocky moment where he and others are hoping for the knockout with body blows against SAMA.
In their latest video the group has been careful not to frame it as a protest against Council when they appear in front of them on Monday.
But rather it specifically asks people to attend and support Council to knockout SAMA and change the formula for this year and ultimately not renew their contract.
All I can say about it in my opinion the move is brilliant and really the only way they can win.
By going to a video format - one that has been shared multiple times according to my Facebook feed (and also by MJ Independent in our story) - the group has tapped into the fact people are visually oriented.
People are more affected by photographs than they are by text.
Yes the old adage “a picture says a thousand words” is based on fact.
And for a subject that is complex where it leaves business property owners shaking their heads to understand hundreds of pages in the governing legislation going to photographs by Property Assessment Watchdogs has been nothing short of a rib breaking body blow landed by Rocky in a hanging beef freezer.
At Dombowsky's first appearance before Council even Councillor Heather Eby stated she did not fully understand the rationale on how property taxes are derived.
Councillor Eby went on about how the photos presented helped her better understand the issue.
SAMA for their part are fighting back as they will be appearing with a requested report about the fairness and quality of the valuations used in commercial property assessments.
Of course this is not going to be a debate between Property Assessment Watchdogs but rather one of quality assurance where SAMA will stress the figures they used for business property valuations used in their model to establish business property assessments are correct.
Look for lots of visual aids such as charts and graphs to seemingly pop up.
SAMA has for their part fought back by saying it it is “some” business property owners or a “couple” in an attempt to downplay and have Council and the public dismiss the entire fight.
It is in an anology an attempt to show Rocky with no crowd support but simply a washed up disgruntled fighter who does not know when it is time to just stay down.
How it is presented to Council is in my opinion going to have a major impact on how successful Property Assessment Watchdogs are in what they see and frame as a fight for “common sense” when it comes to business property assessment and the resultant taxes.
In many ways what we will be witnessing Monday in Council is not just a battle of facts and figures but also a PR fight.
One if Property Assessment Watchdogs plays correctly that just like a Rocky movie you are going to see and hear chants of “Bernie” echoing louder in the community.
If that happens the roles may reverse with SAMA struggling to get up from the canvas at least in the public's eye.