‘A small town bureaucratic nightmare come to life.’ - The Orca

‘A small town bureaucratic nightmare come to life.’

Rob Shaw 2

Rob Shaw: An Ombudsperson report reveals a tragedy in Penticton that could have been avoided if someone had just asked.

BC’s Ombudsperson is urging the province to set new guidelines for how municipalities can seize a person’s home, after the horrific story of a Penticton woman whose house was auctioned off by the city to pay a minor tax debt without anyone realizing she was too vulnerable to understand what was happening.

Jay Chalke’s latest report reads like a small-town bureaucratic nightmare come to life. It concerns “a vulnerable 60-year-old woman” identified only as “Ms. Wilson,” who fell behind on $10,083 in property taxes for two years starting in 2015.

She had the money to pay, but wasn’t able to manage herself. She had “lifelong health issues” and sister had power of attorney over her affairs.

But the City of Penticton didn’t know, care, or bother to ask anything about her. Instead, it seized her house, assessed at $420,000, and sold it at auction for a paltry $150,000 to cover the woman’s $10,083 debt. She was evicted and lost $270,000 in equity, for a tax bill she could have paid if someone had just tried to help her.

“What happened to Ms. Wilson is tragic: she lost her home, and hundreds of thousands of dollars in equity — all over a tax debt of approximately $10,000,” wrote Chalke.

“In light of my findings about the mistakes that the City made and the unfair process that resulted as well as the City’s failure to consider Ms. Wilson’s circumstances, I have recommended that the City of Penticton compensate Ms. Wilson for a portion of the equity she lost.”

But the city has refused.

In a response that would make Ebeneezer Scrooge proud, city administrator Donny van Dyk replied that “the City maintains that it fulfilled its legal obligations.”

“This is a most unfortunate situation but from the City’s perspective it is important to bear in mind that City staff had no information to suggest that Ms. Wilson was a vulnerable person in need of support or assistance until after the conclusion of the tax sale process,” he wrote.

Which is true — because the city never bothered to ask. No one appeared at all curious why this woman was only the third person in the past 32 years to lose their property through a tax sale.
Not good enough, said Chalke, who argued the city should have checked with the health authority or the Public Guardian and Trustee to see if the woman was of sound judgement to understand the gravity of the life-changing situation.

“One simple telephone call from the City to one of these agencies could have resulted in an entirely different outcome in this case,” he wrote.

“Ms. Wilson had the money to pay the outstanding taxes, but like many vulnerable adults, she just needed some help to take the necessary steps to resolve the tax debt and avoid the tax sale.”

But even that was rejected by van Dyk.

“The City does not accept the report’s conclusion that in the circumstances the City ought to have inquired as to whether Ms. Wilson might be an adult in need of protection or assistance,” he wrote.

In an inspired flourish of buck-passing, the administrator added that Penticton would be more than happy if the BC government developed “best practice guidelines to assist municipal staff” in recognizing similar situations in the future, he wrote. As if it’s the province’s job to teach basic human decency to low-level bureaucrats.
To make matters worse, Penticton made a litany of errors in how it auctioned the woman’s home. Most of the 15 communications and notices to her contained mistakes — such as at one point claiming she owed more than $3,000 in 2014 taxes when in fact it was the 2015 and 2016 years in dispute.

The city’s best and brightest couldn’t even cite the proper section of the Local Government Act in their letters to back up their actions. They also listed the wrong date the woman could pay her taxes to prevent the sale.

After selling her property, the city wrote her a final letter that mistakenly claimed she only had 90 days to claim her $139,916.74 balance from the auction – when in fact she had nine months. In a final insult, they mailed it to an old address where the woman no longer lived, and nobody bothered to check to see if she got the letter.

The city’s response to its mistakes? Basically: Whatever.

“Minor errors or deficiencies in the city’s notices…did not affect the fairness of the process,” replied van Dyk to the Ombudsperson.

Chalke made six recommendations, five of which were to the province to improve communication over tax sales and require municipalities to try and reach out to people and protect the most vulnerable. The BC government accepted them all, but added the situation seen in Penticton is, thankfully, fairly rare.

The one outstanding recommendation was to the City of Penticton itself: Compensate the woman $140,922.88 – half the equity she lost due to the unfair auction of her home.

If you’ve read this far, you can probably guess how the good folks at the City of Penticton responded to that one: No.

To be fair, that’s a hefty bill for the taxpayers of Penticton to pay. It might be better for city council to raise the funds in-house. It could start by sacking some of the people involved in this embarrassing mess, and redistribute the salaries saved back to the woman treated so poorly by the municipality.

Rob Shaw has spent more than 13 years covering BC politics, now reporting for CHEK News and writing for The Orca. He is the co-author of the national best-selling book A Matter of Confidence, and a regular guest on CBC Radio.