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PRPA responds to City of Prince Rupert implications

‘Bonuses’ are ‘variable compensation’ and not connected to PILT, Veldman says
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The Port of Prince Rupert on the North Coast of B.C. (Photo: Supplied)

The Prince Rupert Port Authority (PRPA) has responded to allegations at the Jan. 9 city council meeting that their Payment in Lieu of Taxes (PILT) is connected to executive and staff bonuses.

“It is troubling that Prince Rupert City Council has drawn conclusions that suggest that PRPA and its employees are working against the best interests of its local community. PRPA and its 90 employees are proud members of their community,” the port authority stated in a Jan. 11 media release.

Ken Veldman, vice-president of public affairs and sustainability at PRPA, told The Northern View on Jan. 13 that alleged connections between PILT and remuneration are based on a “misunderstanding” of how PRPA employees are paid, adding he didn’t want to get into too much detail about the compensation packages.

“It’s very difficult to have this conversation. I mean, it’s difficult as an organization to see its compensation approach being discussed publicly because it’s not really a public matter. But given that … this policy was received by and commented on by council and some of those implications were made, it is important that we clear up that this is really about whether we achieve targets across a broad spectrum of objectives, and it’s not zero-based.”

“Perhaps I can summarize it by saying that a portion of every employee’s salary is based on how well the PRPA and each individual employee performs against annual targets that are set out.”

While the remuneration, based on a percentage of an employee’s salary, was referred to at the council meeting as a “bonus,” Veldman said it is not a “bonus,” but preset targets that employees can meet for additional compensation when reaching various goals.

It’s “variable compensation,” he said.

“I don’t want to get into an argument as to whether variable compensation is technically a bonus, you can make your own determinations on definition. But noting that it’s a variable component of salary …” Veldman said.

“So, we have base salaries. But your full compensation is based on how the organization and each employee does against targets that are set out at the start of the year.”

Veldman said the variable compensation is not tied to PILT payments.

“I’m concerned that city council has implied that PRPA employees … receive bonuses because of [a BC Assessment] appeal board ruling.”

“PRPA’s PILT payments have reflected the property values determined by BC Assessment. In recent years, BC Assessment significantly increased the assessments of PRPA properties and PRPA appealed the assessments to the Property Assessment Appeal Board using the same appeal process available to every property owner,” the statement reads.

“The City was aware of the appeal being filed and the ensuing process. As a result of the appeals, the assessment methodology and the resulting assessments of those properties were recognized as being incorrect, and the Property Assessment Appeal Board issued orders that reduced the assessed values.”

At the recent city council meeting, participants heard that the City of Prince Rupert is now appealing that provincial process and determination to the federal level using the Dispute Advisory Panel.

According to the PRPA’s statement, as a manager of crown land and a government body, the Port Authority is technically exempt from paying property taxes; however, through the PILT process pays the City of Prince Rupert the same property tax as any other property owners would pay.

Veldman said that under the federal Payment in Lieu of Tax Act, senior governments don’t pay taxes to junior governments, however, the act was legislated to enable “a proxy for property taxes.”

The port authority states PRPA properties subject to PILT are primarily comprised of vacant, undeveloped crown land on Ridley Island and Lelu Island.

“Municipal property tax rates set by the City of Prince Rupert and District of Port Edward (and other property tax authorities) are applied to their assessed value to determine the appropriate payments. Once a property is leased to a tenant, it is not subject to PILTs and pays property tax directly to the taxing authority.”

Veldman wanted to clarify that appeals of the tax amounts were not made retroactively but were appealed each year appropriately, it just took that long to obtain an order with a reassessment value.

The PRPA used a standard provincial BC Assessment appeal process available to any property owner in B.C. to challenge a property assessment.

“So we used that process and we challenged the methodology and the resulting assessments for those properties. The board ruled that the previous values were incorrectly assessed, and the board ordered that reduction,” Veldman said.

“None of the numbers are randomly chosen or unilaterally created by us. Those are all values that were applied to create the PILT payment based on BC assessment … There is actually nothing there that looks any different than what any other property owner would go through.”

Veldman explained while the city has the ability to utilize the BC assessment appeal board, they have chosen to use the DAP.

“PRPA has offered to enter a collaborative process with local municipalities to further review the value of these lands. However, the City of Prince Rupert and District of Port Edward have chosen to dispute those values through both federal and provincial processes established for that purpose. PRPA is committed to ensuring that its properties are accurately valued and PILTs are paid on that basis,” the PRPA media release stated.

READ MORE: Prince Rupert taxpayers may be on hook for millions with Port and City disputing land value


K-J Millar | Editor and Multimedia Journalist
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