The Strategic Policies and Priorities Committee submits the following transmittal letter (April 6, 1998) from the Chair of the Assessment and Tax Policy Task Force to City Council, without recommendation:

Recommendation:

On behalf of the members of the Assessment and Tax Policy Task Force who were present on April 6, 1998, I am forwarding, for consideration by the Strategic Policies and Priorities Committee, the report (April 2, 1998) from the Chief Financial Officer and Treasurer respecting the independent review of Provincial Current Value Assessments.

Background:

The Assessment and Tax Policy Task Force, having regard for the fact that no quorum was present at the specified time and in view of the fact that notice had been placed in the newspaper that a public hearing would be held on the Property Assessment and Tax Policy System recently implemented by the Provincial Government, heard presentations from the public on this matter and continued to meet informally and to discuss this and other matters.

The members of the Assessment and Task Policy Task Force who were present had before them a report (April 2, 1998) from the Chief Financial Officer and Treasurer recommending that the Chief Financial Officer and Treasurer not engage a consultant to undertake an independent review of the quality and accuracy of the provincial assessments given that a study based on a statistically valid number of properties could not be completed in a timely manner for Council to consider.

For the information of the Strategic Policies and Priorities Committee, I advise that the Task Force, at its meeting held on March 3, 1998, requested the Chief Financial Officer and Treasurer to conduct an independent audit of the quality of the reassessment that was carried out by the Province.

As Chair of the Assessment and Tax Policy Task Force, I am forwarding the abovementioned report from the Chief Financial Officer and Treasurer, to the Strategic Policies and Priorities Committee for consideration.

Purpose:

This report outlines two approaches to provide Council with an independent review and analysis of the new provincial current value assessments.

Funding Sources, Financial Implications and Impact Statement:

The conduct of an independent review and evaluation of the quality and accuracy of the new provincial current value assessments in Toronto is a detailed and lengthy undertaking, which could conceivably require funding of approximately $1 million.

Recommendation:

It is recommended that the Chief Financial Officer and Treasurer not engage a consultant to undertake an independent review of the quality and accuracy of the provincial assessments given that a study based on a statistically valid number of properties could not be completed in a timely manner for Council to consider.

Council Reference/Background:

The Province notified property owners across Ontario of their new assessments in February. Public reaction to the new assessments in Toronto has been mixed. Some property owners claim the assessments are too high, while others suspect that their assessed values are on the low side. The Ontario Fair Assessment System (OFAS) initially allowed for property owners to appeal their assessments to the Assessment Review Board this year up until June 29. The Minister of Finance announced on March 27 that municipalities will be receiving final assessment rolls one month later (i.e. end of May) to permit municipalities to consider the new tools introduced by the Province. This effectively extends the appeal period to the end of July.

Council amended and approved Clause No. 3 of the Strategic Policies and Priorities Committee Report No. 3 at its meeting on March 4, 5 and 6, 1998, requesting the provincial government to undertake an arm's length review of the quality and accuracy of the current reassessment in Toronto. In addition, Council requested the Province to provide statistical information used to determine the level of quality and accuracy of the provincial assessments as well as other information used to base the assessments. Provincial officials appeared before the Assessment and Tax Policy Task Force at its meeting on March 23, 1998, and presented information outlining the overall quality measures of the new assessments across Ontario. Provincial officials indicated that the new assessments are within the quality standards accepted by the assessment profession. Information pertaining to the statistical quality measures of the multiple regression analysis used to determine the new assessments is to be provided at a later time by provincial officials.

Discussion:

To ensure an independent review of the quality of assessments, the City of Toronto could engage a consultant to conduct a study. In order for the study to provide a meaningful and credible basis upon which to determine the quality and accuracy of the new provincial assessments, there must be a statistically sufficient sample size of properties from all property classes. Normally, a ten per cent. sample is considered adequate. This would imply that approximately 57,000 properties would need to be reviewed. The consultant would compare the new current value assessment of the sampled properties with the estimated sales price (as of June 30, 1998) as determined by the consultant. Statistical measures such as the assessment to sales ratio and others would be calculated to evaluate the results. However, to conduct a study of such a scale would be costly (requiring approximately $1 million) and require several months. This would not provide the Task Force with a study that it could consider within its timeframe of reporting to Council.

Alternatively, the City of Toronto could engage a consultant to undertake a study that is more limited in scope (i.e. not based on a statistically significant sample size) that provides a general indication of the accuracy of the new assessments. This study would be based on a selective sample of properties. This study essentially amounts to a shortened or scaled down version of the more detailed approach and could likely be completed within the Task Force's timeframe and at a significantly lower cost. However, without the statistical rigor of the formal detailed study, the analysis could not be extrapolated across the entire city to make conclusive statements about the quality and accuracy of the assessed values.

Conclusions:

Council requested the Province to conduct an independent review of the quality and accuracy of the new assessments. A study based on a statistically meaningful sample size is a very detailed undertaking requiring a lengthy period of time to conduct. A shortened version of the more detailed study involving a review of a select number of assessments could provide Council with comparisons, albeit on a limited basis, that could offer some insights into the quality and accuracy of the assessments. The limited study, however, would not be of a statistically valid size.

Contact Name:

Ed Zamparo 392-8641.