Assessment of Short Line Rails
Res #: 36-01M
Responses Received: No
Departments: Saskatchewan Assessment Management Agency
Reslution No. 36-01M
WHEREAS, the current assessment manuals do not use current tonnage hauled over newly established short line rails, but use tonnage hauled in prior years by the previous operators; and
WHEREAS, newly established short lines require time to establish their operation, and therefore operate at much lower tonnage than the previous operators; and
WHEREAS, the current use of prior year’s tonnage results in assessed values that are too high;
THEREFORE BE IT RESOLVED that the newly established short line rails be assessed at salvage value for the first three years until actual tonnage can be established.
Response from Chief Executive Officer, Murray Cooney:
Salvage value is the current basis for the class five rate, which is the class that short line railways typically fall into. To qualify for a class five rating, the average net tonnage of the subdivision must be between 0 and 500,000 net tons for the three year period 1995 to 1997. Net tonnage hauled is the criteria used to classify railway roadway.
The purpose of the three year average is to use historical data to provide a reasonable estimation of the net tonnage that will be hauled over the railway in the current year. Tonnage estimates have been used because assessment rolls are prepared at the beginning of the year, and the current year's tonnage information is not readily available until after the year is over.
The objective is to obtain the most current and best tonnage estimates possible. The current rules use the 1995 to 1997 tonnage because that was the most up-to-date information available for the 2001 revaluation. As more current information becomes available from roadway companies, procedures can be changed to make use of the information. One change now being considered is to update the three year average used to determine the net tonnage of the subdivision. The current period of time (1995 to 1997) is fixed for the entire revaluation cycle and is only updated when there is a revaluation.
If the information is readily available from the railway companies to allow annual updating, then a change in the procedure may be possible. For example, in 2002 the average net tonnage for 1998 to 2000 could be used, and for 2003, the average net tonnage for 1999 to 2001 could be used. Such a change would be consistent with current assessment practices for other properties where if the physical character of a property changes from year-to-year, the assessment is reviewed and updated.