Auctions and community-based TLDs are mutually exclusive
The ICANN auctions paper suggests a "25%" "auction credit" for community applicants. Irrespective of the "credit" percentage, this suggestion implies that an auction would decide whether the registry must be accountable to the community or not.
The principles, recommendations and implementation guidelines defined by the GNSO PDP were intended to avoid this situation in the first place.
The GNSO PDP report calls for the community claim to be examined if there is contention for the same TLD string. Either the competent panel rules that alleged community-based applicant does have community standing (and thus the non-community applicant is rejected), or the panel rules that the community claim is false. But under no circumstances can there be an auction if the community claim is validated.
There are good reasons for this because an auction would have many adverse effects on the TLD community. First of all, the auction would deprive the community of any credible influence over the TLD. Second, the members of the community (as the future users of the TLD) end up paying - indirectly - the auction proceeds. Third, auction itself would be the biggest business risk for the entire TLD project. Even if the community-based applicant won the auction, excessive auction costs would pervert the TLD. As a result, any commitments made to the community would become meaningless as the registry struggled to recoup its costs.
The idea of an "auction credit" for community applicants is thus not only misleading - it appears to "help" community applicants when in fact it does the opposite. It is also a perversion of the conclusions of the GNSP PDP for new gTLDs.
Based on the rules defined in the PDP, only a mistake made by the respective community's representative organizations could lead a community-based applicant to face a non-community-based applicant in an auction.
One should of course expect that representative organizations of a community targeted by a given TLD application would oppose the non-community application. However, it is possible that community organizations have trouble making an informed decision in time and miss the objection deadline. This is especially likely if the community is divided on the subject and/or is overall still too unfamiliar with TLD issues. It would be a very bad idea to allow an auction to take place in such a situation.
If a TLD string indeed ends up being scheduled for auction, there could be a special pre-auction objection period. This would allow representative organization(s) of the targeted community to stop the auction from taking place. In such a case, all the applications would be rejected for that round. If later consensus is established in the community, a new TLD application can be made.